NHL lockout 2012: The remaining financial sticking points

Brad Penner-US PRESSWIRE - Presswire

There are still a few big financial sticking points remaining in CBA talks between the league and the NHLPA.

Remember back to July when the NHL made its ridiculous initial CBA proposal? Among a million other points to which the NHLPA objected, it called for a change to the definition of hockey-related revenue.

This change in the definition would have resulted in a further reduction in the players' share of the overall pie -- on top of an immediate roll back on existing, already-negotiated contracts and a drop in the share of HRR from 57 percent to 43 percent. In short, the NHL wanted a lot of money.

The NHL still wants to take some money from the NHLPA, as they're proposing cutting the players' share to 50 percent from the current 57 percent. Look for the union to come back with a number slightly more in their favor than a 50/50 split, but the new proposal can definitely be seen as progress.

The league promises no additional rollback in current salaries as they did before. That's not contended by the NHLPA.

They also say the HRR definition will stay the same, a point that is contentious. Here's what the league says:

We agree to retain the CBA's current HRR definitions. Further, we propose to formalize the various agreements the NHLPA and the NHL have reached, and lived under, during the course of the expired CBA, and to clarify mutually identified ambiguities in the CBA. Importantly, we do not believe any of our proposed clarifications should have any impact either on the amount of the Players' Share or the amount that any individual Player is entitled to receive. None of these clarifications for instance, would have had a material impact on the 2011/12 Actual HRR number. This proposal is all about certainty, clarity and speeding up our complex, end-of-year accounting process.

And here's what NHLPA chief Don Fehr has to say:

"They want to "clarify" HRR definition and rules. It is not immediately clear what this means, but so far all of their ideas in this regard have had the effect of reducing HRR, and thereby lowering salaries."

A matter of trust, really. The NHL says one thing and the NHLPA says that they'll believe it when they see it.

Another sticking point is the NHL's "Make Whole" provision, which acts to "make whole" all existing player contracts despite the proposed seven percent reduction in the players' share of HRR. Or, as the league puts it:

The League proposes to make Players "whole" for the absolute reduction in Players' Share dollars (when compared to 2011/12) that is attributable to the economic terms of the new CBA (the "Share Reduction"). Using an assumed year-over-year growth rate of 5% for League-wide revenues, the new CBA could result in shortfalls from the current level of Players' Share dollars ($1.883 Billion in 2011/12) of up to $149 million in Year 1 and up to $62 million in Year 2, for which Players will be "made whole."

To do this, the league will repay the players the money lost over the next two years over the course of the remainder of their contracts. The catch, however, is that the money will come from the players' share in those future years. Again, via the league:

Player "make whole" payments will be accrued and paid for by the League, and will be chargeable against Players' Share amounts in future years as Preliminary Benefits.

As the union puts it, "it is players paying the players, not owners paying players." That's not going to sit well with the NHLPA, and we can be sure that this part of the league proposal will be altered when the Fehr & Co. make their expected counter on Thursday.

X
Log In Sign Up

forgot?
Log In Sign Up

Forgot password?

We'll email you a reset link.

If you signed up using a 3rd party account like Facebook or Twitter, please login with it instead.

Forgot password?

Try another email?

Almost done,

Join SBNation.com

You must be a member of SBNation.com to participate.

We have our own Community Guidelines at SBNation.com. You should read them.

Join SBNation.com

You must be a member of SBNation.com to participate.

We have our own Community Guidelines at SBNation.com. You should read them.

Spinner

Authenticating

Great!

Choose an available username to complete sign up.

In order to provide our users with a better overall experience, we ask for more information from Facebook when using it to login so that we can learn more about our audience and provide you with the best possible experience. We do not store specific user data and the sharing of it is not required to login with Facebook.