NHLPA memorandum outlines latest on CBA and other details

Eric Macramalla, TSN Legal Analyst
9/20/2012 7:29:46 PM
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NHLPA executive director Donald Fehr addressed his players on Wednesday by way of a memorandum, providing a status update on negotiations and some details on the specifics proposed by both sides.

The NHLPA's proposal calls for "small, but fixed" increases in pay for the players over a five-year proposed collective bargaining agreement.
In the first three years of the CBA, the players would get $1.91 billion, $1.98 billion and $2.1 billion, which represents a share of revenue of 54.3 per cent, 52.5 per cent and 52 per cent. This assumes that hockey related revenue or HRR (the revenue pie shared with the players) continues to grow at the usual or historic 7.1 per cent rate.

The NHLPA is also proposing a twist in years four and five of the CBA: the players would get $2.1 billion plus 54 per cent of the growth in revenue in years four and five of the CBA.

Under the NHLPA's plan, the player share of revenue never drops below 52 per cent and tops out at 54.3 per cent. Again, this assumes steady seven per cent growth.

Assuming that HRR grows at a rate of 7.1 per cent over the five years of the CBA, the NHLPA is saying that the owners would save $897 million while the player share of revenue would "rise slowly." For this reason, 'both sides win' according to the NHLPA.

The NHLPA has also proposed a number of safety valves protecting both sides if growth was too high or too low. If revenue growth is deemed low - 3.9 per cent or less in first 3 years - then the players share of revenue in years four and five of the CBA would be frozen. If, however, the growth rate is considered high -  8.9 per cent or more over the first three years - the players would be entitled to a 57 per cent share of revenue that exceeds $4.2 billion.

The NHLPA's plan also provides that the player share of revenue would never rise above 57 per cent or drop below 50 per cent.

According to the NHLPA, the NHL's proposal has the players getting a 49 per cent share of revenue in year one of the CBA, 48 per cent in year two and 47 per cent in the last four years of the deal. The NHLPA sees this as a reduction in the player share by 14 per cent in season one, about 16 per cent in season two and 17.5 per cent in the last four years.

Ultimately, the NHLPA believes that if there is the historic growth rate of 7.1 per cent, the players all told would lose about "$1 billion in the first three years alone" under the NHL's proposal.

The NHLPA has also proposed an aggressive team revenue sharing program by creating an Industry Growth Fund for struggling teams. It includes that Phoenix, the Islanders, Nashville, Carolina, Columbus, and Florida would automatically participate in the Industry Growth Fund. As well, the Growth Fund teams would receive minimum revenue sharing guarantees and minimum extra draft picks, but the Commissioner can do more if needed.

According to the memo, the more than '280 players' that attended the recent CBA meeting expressed 'overwhelming and emphatic' support for the NHLPA's proposal and its bargaining approach.

Fehr also wrote that the Union wants 'an agreement that treats the players fairly, encourages revenue growth, and stabilizes this industry so it can break out of the pattern of lockout after lockout after lockout which has become the norm in every salary cap sport.'

As well, Fehr reminds his membership the key issue at play: 'what do the players get out of this agreement...other than much lower salaries and far fewer rights?.'

The memo is clear in its presentation and potentially complicated concepts are distilled nicely for player consumption. This is important for a Union that wants to ensure player unity and solidarity. Understanding competing proposals and their impact, may make it more likely that players will stay banded together.
This memo is of course only the Union's side of things. Whatever the differences in interpretation of the issues, though, it does seem that there are areas of compromise to be had on the revenue sharing side. It also seems that the players are, for now, unified in their efforts, and prepared to follow Fehr's lead.

Eric Macramalla is TSN's Legal Analyst and can be heard each week on TSN Radio 1050. You can follow him on Twitter @EricOnSportslaw.

Crosby, Fehr and Ovechkin (Photo: The Canadian Press)


(Photo: The Canadian Press)
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