NHLPA “Alternative Proposal” Designed To Aid Bottom Feeders
NHLPA executive director Donald Fehr (on behalf of the players) tendered a proposal that would see the players take a short term financial hit (smaller percentage of revenues) in order to secure greater revenues in the not so distant future while helping the bottom feeders of the league compete with an increase in revenue sharing amongst the owners.
“Under our alternative proposal, essentially the players have indicated they would take a reduced share of hockey-related revenues going forward for the next three seasons. Fehr told media members outside of the NHLPA offices in Toronto. “That would be based on a reduction from what would be produced under the current formula, with the league growing at traditional rates that it has for the last seven years.”
And grow the NHL has. Reports indicate that the NHL has grown from $2.2 billion in revenues to $3.3 Billion since the lockout. When you consider the state of the U.S. economy that rate of growth is huge!
With the players seemingly willing to take a loss in the short term, they will not go poor as even with this new agreement the players would still stand to see some growth in salaries over the next three seasons seeing as much as a two percent rise in salaries next season, four percent the following season and six percent in year three.
According to the NHLPA, the players could give up as much as $465 million, but if the league continued to grow at the current rate the players could cash in over the long term.
When you consider where the salary cap is today (just over $70 million) one would think the players would be happy. That said, with few teams spending to the cap limit we are looking at a much lower number than the $2.1 billion that NHL owners could be spending if they all maxed-out the cap limits.
If the players can get the owners to agree to more revenue sharing the teams that will be most affected will be the big market clubs who tend to make more money. Of course, then you read reports that despite being located in the biggest sports market in the world the New York Rangers actually lost money last season and we are left shaking our heads as to where the revenue sharing is going to come from?
Still, more revenue sharing within the owners will likely see an increase in spending, which is good for the players. Sure, at first glance the players may not get the increase they were looking for, but if every owner spends more money then every player from the bottom to the top should see an increase in pay over time.
Think about it. According to capgeek.com there are a total of 14 teams with payrolls over $60 million, with the highest being the Boston Bruins at $68,867,976. That means 16 teams are spending less than $60 million with two teams (New York Islanders and Phoenix Coyotes) spending less than $48 million on their rosters.
As it stands now NHL owners have a total of more than $330 million that is not being spent, or roughly $11 million per team.
While not every team would spend to the maximum cap level, if additional revenue sharing at the expense of the most profitable teams were agreed upon as part of a new agreement the players might be able to coax the owners into spending an additional $5 million per team. That would mean an additional $80-$150 million in player salaries without even having to move the actual revenue needle. How would they get that increase? They would just take it from the rich and give the surplus to the poor to spend at will—pretty smart, huh?
Parity has gone a long way into making the NHL more popular. With so many teams in the playoff race well into March TV ratings have increased, fan interest is at an all-time high and with events like the Winter Classic producing exceptional revenues there is every reason to believe the NHL will continue to grow as long as the upcoming season is left uninterrupted.
One thing is for certain, another strike would kill the momentum the NHL has built up over the past seven years. Despite what the fans may think both the players and the owners want to get a deal done—there will be no winners if a strike happens.
Nobody has all the details of the NHLPA’s “alternate proposal”, but at first glance, from what has leaked out, the NHLPA looks to have given this matter a lot of thought and responded with a very creative and fair proposal.
Heck, its a lot better than the NHL owners proposal which saw Gary Bettman and company go for the jugular demanding (amongst other things) that the players accept a huge reduction in hockey-related revenues from their current 57 percent to 46 percent, a reduction in contract lengths from what is loosely thought to be unlimited to five years and increasing a players ability to become a unrestricted free agent to ten years.
Needless to say, if the players came out Tuesday afternoon with guns-a-blazing nobody would have been shocked. Instead, the players came out with something that Bettman and his crew are going to have to think about and that may be a good thing for both parties, the fans and NHL hockey.
There is just over one month to go before Gary Bettman’s self-inflicted deadline of September 15th will be upon us. The NHL has spoken and they wanted to decapitate the players. The NHLPA has spoken and they have now turned this into the rich owners vs. the small market owners—how smart is that?
Now it is up to the owners to come to an agreement. The owners will not accept everything in the NHLPA’s proposal, but let’s hope they find a way to be reasonable. Hopefully cooler heads prevail and we have hockey in October.
Until next time,