Tag: Collective Bargaining Agreement


Columnist: Gap between cap and floor to grow wider


A little something to chew on during a slow news day – the Globe and Mail’s Eric Duhatschek believes the gap between the salary cap and salary floor will be wider once the NHL and the players’ union negotiate a new collective-bargaining agreement. (The current CBA expires in September.)

Here’s Duhatschek’s explanation:

Coming out of the lockout, teams were limited to a $39-million payroll, but were required to spend a minimum of $23-million. Because the business has prospered since then, the ceiling is now $64.3-million and the floor $48.3-million – and the latter is an unsustainable figure for small-market U.S. teams.

…There will probably be a floor in the new CBA as well, but the gap will be wider than $16-million, just so the Nashvilles, Phoenixes and St. Louises can set their budgets and spend to their limits. The gaps between the haves and have-nots will widen financially, although how that actually plays out on the ice remains to be seen.

For fans of cost-conscious clubs like Nashville or Carolina, there are two ways to look at this.

From a pessimistic view, the Leafs, Flyers, Rangers and the rest of the rich franchises will be able to outspend your team to an even greater degree.

On the other hand, if the cap floor is too high and your team is forced to spend money it can’t afford to spend, there’s always the risk your team calls it a day and moves somewhere else.

What the NHL and NHLPA might discuss next summer once current CBA expires

Gary Bettman

This has not been an easy summer for the NHL by any means. Perhaps the post-Game 7 Vancouver riots acted as an ominous introduction for months in which most of the biggest stories were negative. From more manageable headaches like Drew Doughty’s contract holdout situation to stomach-churning issues such as Sidney Crosby’s battle with post-concussion syndrome and the troubling series of enforcer deaths, the notion that next season cannot come soon enough takes on added meaning in 2011.

Yet as bad as things have been lately, next summer could be foreboding in its own right for a reason few of us even want to consider: the possibility of another lockout. The league seems like it’s in much, much better shape heading into the summer of 2012 than it did going into the summer of 2004, but the fear is there since the Collective Bargaining Agreement will expire.

The good news is that the NHL isn’t likely to shoot for enormous changes like instituting a salary cap or attempting to radically improve the style of play (among other alterations that the damaging 2004-05 lockout gave way to). That doesn’t mean that the league and its players association won’t be locked in some tough battles, though.

Tony Gallagher took a look at some of the hot button issues that will likely be discussed next summer as the parties try to hash out another CBA. It’s a piece worth reading from top to bottom, but PHT will take a look at some of the most interesting bits.

Let’s start things off on two issues that might have an impact on the league’s poorest teams.

In speaking to a number of informed people around the league on both sides of the fence, it’s clear that one of the league’s biggest problems within the present agreement is the obligation to enforce a floor on the genuinely pathetic franchises around the league.

The teams that have been losing money and crying wolf for the past 10 years are now being forced to pay out in the neighbourhood of US$45 million, which is forcing them into a position of losing money in some cases, and the league will be looking toward either lowering the floor or eliminating it altogether. That is something the players will likely vigorously defend.


The Torontos, Montreals and Vancouvers keep handing over money to the same dud franchises year after year with the question being whether that will continue to be the case, and if so, will that pool of money increase or decrease? And how will it be comprised going forward.

A particularly wrangling issue is all playoff teams having to contribute one-third of all revenue sharing from their first-round take, a system that actually rewards franchises (most notably Toronto) for missing the playoffs.

That’s the interesting thing about the current CBA; there are provisions that both hurt and help the league’s less successful teams. (Then again, the high cap floor/playoff revenue sharing combo might have the worst impact on not-so-deep-pocketed clubs like the Nashville Predators, who use their guile more often than big pay checks to make the playoffs.) To make things fair, the league probably wouldn’t want to eliminate the salary cap floor without keeping a minimum payroll for teams who want to benefit from shared revenue.

Naturally, the big money questions will be the biggest sticking points. The other major money matter is guaranteed contracts (and owners’ urges to do away with them). Considering the dangers involved in the sport, it would be a hard sell to roll back guarantees. After all, who’s going to want to risk breaking a bone by blocking a shot if they could lose their job shortly afterward?

Gallagher’s most interesting point comes late in the article, where he claims that NHL commissioner Gary Bettman and NHLPA head Donald Fehr have already won some big labor battles in their day, so they might be more willing to avoid a big standoff. It would be great if that ends up being true, but we’ll need to wait and see if that bit of sunshine turns out to be the light at the end of a (hopefully short) negotiating tunnel or just an example of an incorrect but educated guess.

Click here to read more about the probable talking points during the 2012 CBA meetings.

Nervous about potential NHL labor strife next year? Daniel Paille isn’t

Daniel Paille

While we may (or may not) be paying attention to how the NBA is locked out without any progress, we’re reminded about the NHL’s troubles back in 2004-2005 when the owners locked out the players themselves. That lockout was devastating to the NHL in that it canceled an entire season and saw the Stanley Cup not handed out.

With memories like that and the NHL’s Collective Bargaining Agreement with the NHLPA expiring after this season, some are already getting nervous about how things will go this year and over the summer. After all, those wounds for NHL fans run deep and are all too fresh in our minds. Seeing the NBA go through what the NHL did just six years ago gives us reason to pause and hope there won’t be a repeat of that disaster.

One guy who isn’t worried about things is Boston Bruins players representative Daniel Paille. Paille might be new to the leadership position, but he says that the players remember what went down before and see how the NBA struggles are affecting their league and how they can’t follow the same path.

“We’re one year away, so we’re in the same position where we’re going to have to make a decision, but I feel confident [of avoiding another lockout],” Paille added.

Paille believes both the players and owners understand that the league can’t afford to have another stoppage after working so hard over the last six years to overcome the damage of the last lockout. Still, negotiations are likely to be contentious as player salaries have continued to rise despite the implementation of a hard salary cap.

“I think both sides know what’s at stake,” Paille said. “I think just having two lockouts in a row, especially one after the other, is not healthful on either side. I think hopefully both sides realize what’s at stake and realize that we want to build the fans base and the way to do that is to keep playing.”

Continuing to play hockey would be a really smart idea. After all, the NHL is in a position to perhaps gain a few more fans with the NBA figuring their business out. They’d also be wise to not further infuriate fans who came back after the 2004-2005 lockout again. There’s a cliché that fits well for this situation: “Fool me once, shame on you. Fool me twice, shame on me.” A lockout after the 1994 season managed to kill off part of the 1994-1995 season while the 2004-2005 season was wiped out entirely.

The one line from this that Paille and NHL commissioner Gary Bettman share when it comes to this topic is about how potential problems are a year away. We understand that their minds are focused more for what’s directly ahead for them and the upcoming season, however they have to understand where the fans’ minds are at. Fans don’t want to see a work stoppage again and with former MLBPA head Donald Fehr in charge of the NHLPA, everyone’s more than a bit nervous. After all, Fehr was in charge of the MLBPA when they canceled the World Series in 1994.

We’re not advocating giving fans lip service, but we hope that they’ll understand why fans will get grumpy if there’s no progress on matters as the season wears on and potentially into the summer. Players and executives certainly don’t want to be talking big business when there’s games to be played, but let’s hope that lessons learned are still fresh in their mind.

Tackling how the US debt debacle might affect the NHL

A picture shows the reflection of a man

In case you haven’t been paying attention to news and politics lately (it’s OK, we understand that little-to-none of the news has been good), the United States’ credit rating went from AAA to AA-plus according to Standard & Poor’s. It’s been called “an unprecedented blow” to the American economy and could “eventually raise borrowing costs for the American government, companies and consumers.”

If you’re visiting this hockey blog to escape that nightmare story, we apologize. The sad reality is that real-world economics often invade the comfy bubble of low-stakes sporting events.

On the Forecheck’s Dirk Hoag did a fantastic job of explaining how this scary situation might affect the NHL in general today. After giving an overview of how the values of the Canadian dollar and the American dollar changed over the years – and how those fluctuations affected the NHL in that time – Hoag gave three hypotheses on how this latest crisis might affect the highest levels of hockey.

Let’s take a look at each of the the main points he made.

1. More Canadian teams spending closer to the cap

… A windfall gain due to currency shifts could make it easier for those teams to boost their player salaries for the upcoming season, and/or increase off-ice spending to gain edges elsewhere (Calgary recently hired Chris Snow to conduct video & statistical analysis, while Toronto has a front office loaded with ex-GM’s from around the league).

Could these shifts also mean more Canadian teams, period? It certainly gives an extra bit of credibility to hockey-starved Quebec, if they could ever get that pesky NHL arena built.

2. Small market American teams face an additional challenge

The NHL has a revenue sharing plan that can benefit the league’s smaller markets, but those markets must reach certain spending and revenue benchmarks to enjoy those benefits. Here’s how Hoag described that possible situation.

For a team which earned a full share in 2010-2011, missing that target next year would mean they’d only get 75% for 2011-2012, a hit which could easily amount to $3-5 million depending on individual circumstances. Teams missing those targets for the second consecutive year only get 60% of their share, and for 3-year (or more) offenders, they get 50%.

The third point is more about minutiae, unless you’re asking Dan Ellis.

3. Players may benefit from decreased escrow

Again, that’s a concern that probably doesn’t register with many fans, but read the post if you’re curious.


So, the basic takeaway is that Canadian teams could benefit across the board while small market (non-traditional?) American teams might be under even more stress if the downgrade has a significant impact on American currency. In a way, it almost seems like Canadian teams are getting revenge for the ’90s, when their teams were bleeding money and the Sunbelt expansion was in full swing.

Of course, while Hoag’s post is grounded in logic, it’s still speculation at this point. That being said, could the NHL actually consider putting together an American Assistance Plan in the next Collective Bargaining Agreement to echo the Canadian version from the latest one? There are all kinds of possibilities at play here … and most of them are rather depressing.

We could have more than a year to discuss these and many other issues as the CBA races toward expiration, although most of us will spend the majority of our time simply begging for both sides to avoid another lockout.

Donald Fehr speaks up about NHL’s labor future as problems may lie ahead

Donald Fehr

While the NHL is one of two major sports not currently locking out its players, the labor calm that exists for the time being may not be around a year from now. At the end of the 2011-2012 season, the NHL’s Collective Bargaining Agreement with the NHLPA will expire and with that comes the worries and fretting that we all have over whether or not both sides will go to war again over salaries.

With things in the NFL and especially in the NBA currently looking ugly and the possibility of games being canceled a distinct possibility, the memories NHL fans have over the lost 2004-2005 season that never happened are fresh. Donald Fehr is the new head of the NHLPA and while many remember him from his years with the Major League Baseball Players Association and his place in infamy for his hand in helping cancel the 1994 World Series thanks to labor problems, how he handles things with the NHLPA will determine whether he’s a villain in just one sport or two.

Sean Fitz-gerald of The National Post in Canada got Fehr’s take on what’s on the horizon for the NHLPA and their dealings with the NHL and how they’ll need to learn from what other sports are failing to do.

On paying attention to CBA talk in the NFL and NBA:
“Of course you pay attention to what’s going on in the other negotiations. There are four sports unions and management negotiations in North America and there are obviously some common themes. Having said that, the economics of all four sports are different; the players are different; the demographics are different, and so you really do have to individualize negotiations.”

Anything surprise you from the other negotiations?
“No, I don’t think so. I mean, the positions of the NFL and the positions of the NBA were telegraphed a long, long time ago, and they’ve held pretty closely to them. And in both of those leagues, they’ve set out to see if they can secure massive concessions from the players, and that’s what they’re trying to do.”

Fehr says that no formal talks have begun with commissioner Gary Bettman and that fans shouldn’t be worried about things until there’s something to actually worry about. Apparently he doesn’t know what it feels like to be a fan of the game with a fresh wound that still isn’t totally healed from just six years ago.

One aspect that remains similar in the NFL and NBA with what the NHL will look to do is trying to rein things in a bit with money. Of course, the NHL owners were the ones who pushed hard for the current system and went so far as to give up a full season of games to get it put in place. With the sorts of contracts we’ve seen issued by teams to players in order to get around the limits of the CBA, it’s believed the NHL will look to close all those loopholes out and eliminate the extreme long term deals to help circumvent the cap. Larry Brooks of the New York Post believes as much will happen.

Next time, the NHL is going to introduce the ultimate one-size-fits-all cap. Percentage of the gross will be dramatically reduced. The midpoint will essentially become the cap, with the ceiling and floor separated by perhaps $4M-$6M. Deviations of salary within a contract will be kept to a minimum. The cap charge will be defined by the average of the three-to-five highest salaried seasons. Contracts will be kept to a minimum of five-to-seven years.

The players through all this, of course, are going with the limits that were set before them and they’ve been able to take advantage of the owners’ shortsightedness. It’s hard to get angry at the players for taking advantage of a system that was thrown down before them as a cure-all for the salary madness that was taking over the league. It’s not as if a player isn’t going to take an offer that might be worth more than their value on the whole may be for. You take as much as you’re offered and that’s that.

Of course, should things turn ugly as the year wears on and the deadline to get a new CBA approaches, that story line won’t be what’s told and things will always turn into a players vs. owners battle. This time around, everyone could use a lesson or two in financial education.