It’s been a while since I’ve written about the NHL lockout. Almost two months in fact. But in case our loyal readership is wondering, yes, I’m keeping a close eye on the proceedings. And I’m feeling positive.
Lets skip the whole outrage thing. Everyone’s mad that there’s no hockey and so am I. Lets just get down to the nuts and bolts as to where we stand.
Here’s a quick recap of the NHL lockout extravaganza, 2012:
-The NHL and the NHLPA have agreed to split league revenues 50/50. Essentially that means that the sum of the 30 teams’ salary caps will equal 50% of the hockey related revenue that the NHL produces.
-The first buzz word of the NHL lockout was “50/50″. Once that was agreed to (sort of), the second set of buzz word has become “the make whole provision”. Originally the owners wanted the players to take a pay cut in order to reduce their share of league revenues immediately from 57% to 50%. The “make whole provision” refers to repaying this pay cut.
-Still confused about the make whole provision? Here’s an example: lets say the agreement calls for all current contracts to be reduced by 10% in order to get down to 50-50. So for a player like Ryan Kesler (who makes $5 million per season), he would stand to lose $500,000 per season. The make whole provision is a mechanism that pays Kesler the $500,000 back. That money might be paid back over a number of years, and could be paid back by the owners as a collective. For a more comprehensive and confusing explanation, check out what Bob McKenzie has to say on TSN.ca.
-After reading what Bob McKenzie has to say (I think most would consider Bob McKenzie the most knowledgeable and trustworthy NHL source), I believe that the owners and players are basically in agreement with “50/50″ and the “make whole provision”. So lets start the season right?! Well not so fast…
-That’s right! Gary Bettman wants more. The owners want free agency to start later, salary arbitration rights to begin later and long term contracts to be shortened.
-Free agency starting later is something that players don’t like, and it’s something that is good for small market teams. But is it good for big market teams? Not in my opinion. And for that reason, I can’t see the owners willing to cancel a season over this issue. Sure, maybe Columbus and Nashville would be in favour of it, but there’s a whole heck of a lot of teams who aren’t.
-Would the owners be willing to cancel a season over salary arbitration rights? Probably not. Once again, this is an issue that really only affects small market teams greatly. Early salary arbitration rights essentially give big pay days earlier to younger players. The big market teams like the Canucks will spend to the cap anyway, so this won’t affect the bottom line. Don’t get me wrong, it’s an issue for the owners, but once again, I don’t think it’s something that enough of the owners care enough about to cancel a season over it. This is an issue for the players of course, but when they need to make concessions, the first players to be thrown under the bus are the young guys (see: rookie salary cap).
-The last sticking point are long term, back diving contracts. Everyone’s familiar with this kind of a deal. It’s like the contract that paid Roberto Luongo $10 million in the first year of his deal, progressively less each season after that, until he receives $1 million in year 12. This kind of a contract is designed to circumvent the cap, because everyone knows that Luongo will likely retire by about year 9 of the deal. The effect is that Luongo’s cap hit is $5.3 million, but his average salary (over the years he’ll actually play) is higher. This is something that I think a lot of owners will be willing to fight for. The reason is that this affects every team’s bottom line. It affects the Canucks, who will end up more money than the salary cap, and it affects the small market teams who have to sign these ridiculous contracts in order to compete. I think the players will end up caving on this issue. They know the back diving long term contracts circumvent the salary cap as much as anyone. They also know that the percentage of players that cash in from these kinds of deal is small. It’s really only about 20-30 elite players who get them. I believe in the end, both sides can come to an agreement on this. Perhaps it’ll be some kind of provision that the value of each year can’t differ by a certain percentage. Perhaps it’ll state that you can’t sign a player past age 38-40.
Perhaps I’m simplifying the issue a little bit, but that’s the only way to make sense of things right now. The owners and players appear to be close from where I sit, despite the doomsday rhetoric. They’re meeting more frequently, and they’re remaining relatively quiet about it. I think that’s a good thing.
In order to cancel a season, both sides need to be far apart. In my opinion, these two sides aren’t that far apart. The 50/50 issue and the make whole provision appear to be resolved. The other issues aren’t deal breakers for either side, and there’s a deal to be made.
Call me crazy, but I think there’ll be hockey played this season. If the NHL had a commissioner that was able to persuade rather than coerce, the deal would have probably been signed by now.
In 1994-95, they played a 48 game season and began playing hockey in January. For me, that’s the worst case scenario right now.
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