A Hopeless Position
Elliotte Friedman has an excellent piece that explains the battle raging within the NHLPA and goes a long way towards unravelling the mess for us, all without painting anyone in either faction as the villain of the piece. The most interesting element of the story is the wider context Friedman lays out: The players are operating under a CBA that is far from satisfactory, a CBA that makes the situation within the NHLPA worse by setting the players against each other.
Those who support Paul Kelly claim that’s what happened over the past year. As concerns about escrow grew – at one point last season, players were losing a quarter of their paycheques – there was grumbling that Kelly wasn’t hard-line enough to correct that in the next CBA. Make no mistake: the key issue in Kelly’s ejection was the escrow tax, ironic since he wasn’t even working for the NHLPA when it was enacted…
…[W]hat really doomed him was a perception among hardliners that he wouldn’t be tough enough to fight the escrow.
…[I]t’s believed they will ask for an NBA-style limit on the escrow. Right now, basketball players can only lose nine per cent of their salaries and benefits. That’s a max. Last season, their NHL brethren lost 12.9 per cent. How, exactly, are they going to prepare this proposal – and others – with all of this upheaval? They can’t stand this CBA, but are well aware another lockout is suicide, especially since they already caved to a cap.
The NHLPA cannot get the NHL to accept this proposal no matter what they offer in exchange. If any player thinks any NHLPA leader can change this element of the CBA, he is on crack. Do the hardliners really expect the owners to give up on their single most significant gain from the lockout? Bettman would give up the salary cap before he will ever allow the players to have anything other than a fixed percentage of revenues.
Escrow is the mechanism that provides cost certainty. It is escrow that protects the owners from revenue shortfalls, salary overexpenditures, and the rising injury rate. While the league would surely like some tweaks to the CBA – getting rid of lifetime contracts, for example – none of them are important enough to limit escrow in any way. As long as the unlimited escrow exists, all tweaks would do is shift the money around among players.
Changing the excrow provisions is a non-starter. The players won’t even get that with a strike. The only important monetary issue in the negotiations is the determination of the player percentage of revenues as they rise above $2.7 billion. The first version of the CBA has the player share rising from 54% to 57% as revenues go up to $2.7 billion. Under this business model, the league will negotiate a schedule with the Union that will see player share of revenue increase as revenues continue to increase.
Gary Bettman’s opening bargaining position will be that 57% is too much, but he will eventually table a schedule calling for a small increase in the player share. If the players refuse it they can go on strike or keep playing under a contract that limits them to 57% no matter how high the revenues climb. They either take the raise Bettman offers, they go on strike for a bigger raise, or they play without any raise at all.
Even if the players were united, they would have a nearly hopeless bargaining position. The only way to get out from under that position is to abandon the NHLPA.
Postscript: Here’s Friedman on something that has become conventional wisdom: The CBA extends through next year, although the players have the option to extend until after the 2011-12 season. (It is expected that they will.)
It is clearly a mistake to extend the CBA since that will freeze the player share of the revenue at 57% for an extra year. It is better to play without a contract than extend the old one. Extending the contract ensures no raise. Playing without a contract will probably eventually produce a (small) retroactive raise.
As Janiva would say, that’s a Bitter Pill. The reason the players couldn’t even win escrow changes with a strike is because the dynamics to the owners of keeping cost certainty is different from trying to win it?
Having accepted this new partnership does seem to have limited their options to negotiating the way the owners want them to. Maybe thats good? Perhaps having already made that bed, with few real leverage points anyway then, why create a confrontational style new PA? Or, where might they have enough leverage to bother organizing around it?
De-certification requires a majority player vote? Could it ever win if collectively bargaining protects that minimum paid majority?
Maybe thats good? Perhaps having already made that bed, with few real leverage points anyway then, why create a confrontational style new PA? Or, where might they have enough leverage to bother organizing around it?
I think this is exactly the minefield Kelly failed to tiptoe through. The bed was made. The next step – given that reality – is to tailor the demands at the next CBA negotiations around the money – the schedule of player pay increases via a higher percentage of revenues – and trade money off for things like the Olympics or contract limits or other non-monetary items.
The trouble with that approach is the players can’t win a money discussion anyway. They can’t go on strike to gain another $100 million without being destroyed in the court of public opinion. Last time they could make it about principle, but from now on, every work stoppage would be about money. The Union is negotiating with an empty gun.
If Friedman’s sources are correct, at least some players on the executive (and the executive advsory board) wanted Kelly to do something about escrow and escrow is the issue the players are unhappy about. How does Kelly survive that?
The worst case scenario for the NHLPA – realistically speaking – is the players try to change escrow, there is no agreement, the players don’t strike and they play with their share of the revenues frozen at 57%. That’s a circumstance the owners would enjoy indefinitely until the players give up on the idea that escrow can be changed and come to understand that escrow – not the salary cap – was the issue in the last dispute. That this is just dawning on the players speaks volumes about communication within the organization and the quality of the advice players are reciving.
De-certification requires a majority player vote? Could it ever win if collectively bargaining protects that minimum paid majority?
Is losing a decertification vote a bad thing? At the very worst the leaders among the players who want to keep a union would have to get votes by explaining what the NHLPA can do for the players, how it can be improved, and what it can do for them in the future. It also commits those who vote against decertification to taking a less than apathetic role.
I think that is the only route to a healthy NHLPA. They have to ask themselves some hard questions. What does the NHLPA do for the players that the players cannot do for themselves? Is the current business model working in hockey? How much should the players be willing to give up to ensure there are 30 teams? If they decertify and the resulting business model looks more like European football would that be good or bad for most players?
Either they emerge with a renewed NHLPA with a clear path forward and a committed majority or they decide it is best to stop subsidizing a failed business model and try something new.