It looks as though hockey fans may be forced to endure a second National Hockey League lockout in less than a decade.
The Sept. 15 expiration date of the current Collective Bargaining Agreement between the NHL and its Players’ Association (NHLPA) is looming, and a substantial rift still remains between the two sides. So if you’ve been enjoying the sunshine too much this summer to keep tabs of the ongoing drama, this will bring you up to speed.
While there are many key issues causing disagreement between NHL Commissioner Gary Bettman and NHLPA Executive Director Donald Fehr, they are all interconnected and they all stem from the player’s share of league revenue.
At present, NHL players earn 57 percent of hockey-related revenue, and Bettman would like this reduced to 43 percent (essentially a reversal in slices of the pie). Since the last lockout in 2004, the NHL has increased its revenue by over $1 billion and is currently growing seven percent per year.
The increased revenue has resulted in the salary cap (maximum amount a club can spend on its entire roster per year) to jump from $39 million in 2005 to over $70 million now. This, in turn, sets the minimum salary “floor” at $54 million per year. Many small market teams like Pheonix, Nashville, and Washington struggle to meet the floor and would like to do away with it entirely.
The players’ issue with that is obvious: no minimum salary per team means the individual contracts of the league’s poor clubs will be collectively lower. Unlike other major sports leagues, the NHL does not have equal opportunity to flourish in each city it exists. Even with a Stanley Cup, the Los Angeles Kings will always struggle to compete with the Lakers, Raiders, and Dodgers for fans in a city that rarely sees a snowflake.
Another issue that Bettman and Fehr are still miles apart in negotiating is the methods by which the league’s poorer teams are supported financially. For many years, the NHL has operated a revenue sharing system which sees the richest clubs boost the weaker teams.
In the other corner is the NHLPA escrow system, which deducts a percentage of each player’s salary to ensure they collectively remain under the 57 percent share of revenue. However, the NHLPA feels this pool of money has been mismanaged. Poor clubs lowered the league revenue, raising player salaries above their share; the escrow account was used to bump the league up to their 43 percent of revenue.
Still with me? It’s all a numbers game, but the players feel owners of teams like the Toronto Maple Leafs and New York Rangers should increase their offering into revenue sharing so the NHLPA isn’t paying each other’s salaries.
Limitations to player contracts are also under debate. Bettman wants entry-level contracts to last five years instead of the current three, meaning rookies will make a maximum of approximately $1 million for their first half-decade in the league.
The NHL is also arguing for players to not become unrestricted free agents until their tenth season (currently seven), meaning when a player’s contract has expired his team has primary rights to resigning him. Bettman also wants salary arbitration to be eliminated, as players have recently won mediation battles for higher salaries by comparing their statistics with similar players already awarded lofty contracts.
Essentially, the NHLPA sees this as Bettman’s martial law over contracts: upon drafted into the league, players must take an entry level contract for an additional two seasons, cannot explore free agency options until they are a seasoned veteran, or if they want to remain with the club cannot arbitrate a fair deal. One can see why the two sides are at an impasse once again.
So, what are the chances we’ll be watching hockey in Oct. like usual? Not fantastic. However, the good news is unlike the previous lockout, one side possesses some degree of power.
This time last year, the National Football League tidied up their CBA for the season to start on time, while the National Basketball Association missed just two months of scheduled games with their lockout. Major League Baseball hasn’t flirted with one since the mid-1990s. How does the NHL appear to the rest of professional sports with two work stoppages in eight years?
While pressure is on the NHL to make a deal, the spotlight is certainly on Bettman. No league commissioner has been at the helm for two major lockouts, and chances of him keeping his position for a second are slim.
There is more at stake for the NHL now, as well. When the entire 2004–05 season was lost, players scattered across the globe to find alternative teams to play with. However, two elements did not exist in 2004: a rival professional league in the KHL and the re-emergence of Russian superstars. There is now the threat of the Alexander Ovechkins and Evgeni Malkins of the league returning to their homeland to sign a lucrative deal.
Whether the puck drops on a fresh NHL season Oct. 11 as scheduled is anybody’s guess. There are major differences to be settled and little time to do so. However, a lockout now would be much more damaging for the league than the previous one, and here’s hoping the league knows it.