Kudos, Donald Fehr
We have hardly any details about the player’s proposal, but we can see the way the NHLPA wants to restructure the agreement of 2004-05. I think it is very clever. It will be difficult for the owners to reject it out of hand, but I can’t imagine that they will find it acceptable. We’ll see, I guess.
Fehr is prepared to surrender (some of) the money the owners are demanding. He is also assuring the owners that they get to keep cost certainty. And (I suspect) that he’s willing to give a wink and a nod to revenue sharing. (He’d prefer that it was meaningful, but he won’t let it get in the way of a deal.)
All he wants in return is to start negotiating cost certainty in dollars rather than a percentage of revenue. Since linking player salaries directly to revenues was the critical issue in 2004, Gary Bettman is very unlikely to go along with this idea. Still, it is not a bad way to structure cost certainty for the NHL and for the fans.
The most important point I’d make about the player offer is that it would be great for the fans in one respect: It will make future work stoppages almost unthinkable.
The players have not conceded anywhere near the $430 MM a year Bettman has demanded, and probably isn’t even close to the $200 MM a year that I figured Bettman would accept. But it is a quantifiable number and it is negotiable just like Bettman’s $430 MM is negotiable. The money can be worked out under the NHLPA structure. The owners still get cost certainty – I assume escrow will continue to be a feature of the CBA in order to assure that the player salary level is neither too high or too low – but both the player percentage and the owner profits depend on revenue growth. The player proposal locks in actual player costs through the first three years and unless revenue increases are zero, the players will be taking substantially less than 57%.
The key piece of the puzzle for the players? After three years, the players have the option of reverting to the old system with a fourth year at 57%. This is key because it provides leverage to the players the next time they sit down to negotiate. In a perfect world, the NHL and the NHLPA will sit down after three years and quietly negotiate a new player salary level for 2015-16 (and perhaps beyond). If the league has done well, the players can expect a raise. If the league revenues have stalled, the players might have to take less again.
There will be conflict over that number, of course, but the parties will have a strong incentive to settle. The owners will want to cut a deal because the alternative will be a year with a 57% share going to the players. The players will want to cut a deal because after that year, the players will be in the same situation they are in today – facing a lockout and arguing about a percentage of revenue without any leverage.
The benefit – for everyone – would be stability in labour relations. The owners maximise their share of the future pie with the existing structure, but they also face an ugly fight and a possible work stoppage every few years. Will the owners give the players some leverage for the sake of long term labour peace? How far will the players go to get their structure? Will the players endure a lockout now to gain some leverage four years down the road?
Kudos to Donald Fehr for at least making it interesting. Back to you, Gary Bettman.