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NHL makes two proposals to union

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TSN.ca Staff
3/17/2005 11:02:01 AM
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Behind door No. 1 is a $37.5-million US team salary cap offer - $5 million less than the last cap offered by the NHL in labour talks.

Behind door No. 2 is "cost certainty," the NHL players' worst-case scenario, a fixed link between player costs and league revenues in a business that's suffered immeasurable damage.

And there's a catch: Door No. 1 won't be open for very long.

"We told them that to the extent they are interested in pursuing negotiations on that basis (salary cap with no linkage), we would need to conclude an agreement in the very near future," Bill Daly, the NHL's executive vice-president and chief legal officer, told The Canadian Press in an interview following Thursday's meeting with the NHL Players' Association in New York.

The NHLPA was not impressed by either proposal Thursday.

"Both of the salary-cap proposals they put forth today were worse than the proposals that we had rejected on a number of prior occasions," NHLPA senior director Ted Saskin told The Canadian Press.

But the union will examine what's on the table and may come back with a counter-offer. The NHLPA has a three-day meeting planned next week with the players' executive committee, sessions originally scheduled before Thursday's offers by the league.

"We're going to review all of the options, have some internal discussions, and set up another meeting (with the NHL) once we finalize what our approach is going to be," said Saskin.

The league warned that the "de-linked" salary cap offer has a time limit. There's no specific deadline, but the April 20 board of governors' meeting in New York, where the league and owners will detail their plans to possibly use replacement players next season, is as good a guess as any.

"We said in the next several weeks that we would want to conclude an agreement," Daly said referring to the salary cap offer with no linkage. "I don't want to get specific with respect to dates but that's certainly the concept, that this is not our preferred alternative, it's not the preferred way that we want to go about this."

In other words, the league would rather have "cost certainty," but will live without it if the union makes a deal soon on a salary cap with no linkage, something Daly feels was hinted at last Friday's meeting in Toronto.

"While they didn't give us a whole lot of guidance last week, I think at the end of the meeting they indicated a willingness to consider that approach," Daly said. "We felt that if there was an opportunity in the very near term to get an agreement done on that basis, then it was worthwhile pursuing."

But if talks continue to come up short as they have since they began in January 2003, owners appear ready to delve into the unknown - replacement players and possibly legal impasse - implementing its own offer in the absence of an agreement.

That means things could get even uglier, starting with the April 20 board of governors meeting where replacement players will once again be discussed.

"Without being specific, what we've tried to say is that there are a variety of business alternatives that our board has to consider and one of them clearly is replacement players, but there are a host of others as well," Daly said. "We expect to have a fulsome discussion of all the alternatives on April 20 and we'll have a better sense of what we plan to do next year coming out of that meeting."

A source indicated the NHL is looking at three main possibilities with replacement players:

- The league opens shop with replacement players who are not NHLPA members, and not permitting NHLPA members to cross over; this would therefore not be a legal impasse situation;

- The league negotiates a new system to impasse and implements it unilaterally and on this basis NHLPA members would be welcome to cross-over;

- The league ends the lockout for only a segment of the NHLPA - for example, all players who earned under $1 million last season - and invite them to play under a new system; but higher-paid NHLPA players remained locked out.

As for Thursday's developments, the $37.5-million cap offer is $5 million less than the league's final proposal to salvage the season last month, which commissioner Gary Bettman had warned would be its best offer. The drop is a reflection of a business that's suffered more economic damage, the league says.

The NHLPA doesn't buy that.

"Obviously, it's getting worse for everybody as the lockout continues and we may have to find another route at solving this," Saskin said. "Because obviously the proposals we've made to them haven't found favour with them, and certainly the proposals they've made to date haven't found favour with us. Perhaps there's another way of doing things that can achieve a better result for everybody."

Does that mean a radically different-looking counter-offer?

"Anything's possible, the process might be advanced by some new, original thinking," Saskin said. 

The NHLPA rejected the league's offer of a $42.5-million team salary cap last month, countering with a $49-million cap offer that the league also turned down. There were other disagreements in the areas of qualifying offers and salary arbitration as well.

The league's new offer Thursday also included, for the first time, a floor of $22.5 million per team, according to a source. That's something the union had asked for last month but could not get, although it will no doubt want that figure to be higher.

The $37.5-million cap figure could also be moved upward depending on the growth of league revenues, a source indicated. The union had objected last month when the league's cap figure would not move over the course of the six-year deal.

And again, the offer works off the union's Dec. 9 component of a 24 per cent salary rollback on all existing player contracts.

If the NHLPA doesn't negotiate off the $37.5-million cap offer, then the league will shift gears to "cost certainty." The league's second offer Thursday stipulated that player costs would take up no more than 54 per cent of revenues - the same as its Dec. 14 offer.

This is the last time, it would appear, that the union will ever see an offer without linkage.

"I've always tried to avoid absolutes but clearly what we indicated to the Players' Association today was that we only viewed the possibility of doing a de-linked type deal as something that would be feasible from our perspective for a very short period of time," Daly said. "Because if we can get something done in the short term, perhaps we can put an end to the damage that the business has suffered, minimize that damage, and have sufficient lead time to prepare and market next season to bring back the game on a stronger basis as possible."

The NHL would dearly love to negotiate a deal with the NHLPA that would be in place in time to save the June entry draft in Ottawa as well as provide a whole summer to market the game's return.

The owners will also come armed with their homework April 20 in New York.

"At our last board meeting we provided the clubs with a workbook where we asked for a lot of information," Daly said. "The clubs are working on gathering that information and will provide that to us hopefully by the end of this month. We're going to process that information and then we'll be able to have an informed discussion of potential alternatives going forward."

The NHLPA is hoping the league's intention to open shop with replacement players next September will blow up in its face, giving the players' more leverage.

The NHL was represented Thursday by Bettman, Daly, general counsel David Zimmerman and outside counsel Bob Batterman. The NHLPA countered with Saskin, executive director Bob Goodenow, associate counsel Ian Pulver and outside counsel John McCambridge. A source close to the talks said the two sides were together in the room for only about 20 minutes, with the union caucused for the rest of the time.

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