Most of its seven hundred or so players are booking tee times, beach holidays and massage therapy instead of packing their duffle bags and heading for annual September training camps. They have been locked out by owners who, it is claimed, voted 30-0 to proceed with door-closing at midnight Saturday September 15, 2012, the moment the current collective bargaining agreement, the CBA, expired. The reason? For the second time in just seven years players and those owners are at loggerheads over how to divvy up an expanding money pot.
You'd think this would be easy to resolve. Pragmatic, good-faith negotiations more often than not overcome differences, find compromises and solve themselves. But not this time, even though the NHL is generating more revenues than ever before and players can make more cash in a week than many people will make in 10 or 20 years. But not so fast.
The NHL has made a cost benefit analysis and concluded that even though overall revenues are up, there are still too many teams (rumoured to be 17 of 30) that are losing money. Instead of instituting a system of revenue sharing, in which the richest teams pay into an escrow pool and the weaker teams are propped up, the owners (even the magnates who operate money-losing franchises) want the players to give back enough to make up the difference. In other words, the rich teams would get richer, break even outfits would turn a profit and teams that are bleeding tens of millions each year might staunch some of the bleeding.
So how did it get to this point? We have to go back a few years.
The entire 2004-2005 NHL season was forfeited because team owners decided they needed a salary cap on the 23 players who make up an NHL team roster. The cap would exclude the amount a franchise could spend on everything else, from facilities, travel, hotel accommodation, farm teams and management. NHL franchises spend additional millions on their farm (development) teams.
After the 2004-2005 season was lost and summer arrived a deal was finally agreed - teams would be limited to spending $39 million dollars on big league salaries, but no team could spend less than $21.5 million. Those amounts were referred to as the 'ceiling' and the 'floor'. A maximum and minimum. The owners signed off on these terms along with other clauses in their favour, including limits on rookie pay for their first three seasons in the league, which it called 'entry-level' contracts. Rookies were limited to less than a million dollars per season for three seasons, but could triple that income through a bonus system.
In return the players would be able to become free agents after seven seasons, or the age of 27, which ever came first. There were no limits on contract length and a players actual salary and his 'cap hit' were two different things. In other words, a ten year contract for $30 million dollars would be a $3 million 'cap hit', but the player might actually be paid $6 million per year for four years and then $2 million per year for the next six years. It was a win-win for player and owner - the player made most of his money up from when he would be most productive to the team, but the team would be allowed to count just half that actually salary against the annual cap amount, thus having lots of room to sign make sure the other 22 players could be paid well, but fit inside the cap.
The annual ceiling and floor rates would be based on a percentage of projected revenues. Plus, the players would be guaranteed a percentage of hockey related revenue (HRR). In the just-ended 2011-2012 season that rate was 57 percent. To ensure the players actually got every dollar they were contractually promised, an escrow system was established in which a portion of the players pay was withheld. At the seasons end and before the next season began the HRR would be calculated and the players were get a cheque in mid October for the amount they were owed. In most cases it was more than the amount that was withheld and stored in escrow.
So that is enough on the background. Now to the last few months.
The team salary ceiling is up $31 million in seven years to about $70 million, but the floor has more than doubled from that $21.5 to a whopping, boat anchor-like drag of $54 million. That means that even the bleeding teams must pay an average salary of $2.34 million regardless of the talent or whether that amount alone is $20 million more than its projected income.
It's the height of owner hypocrisy in all, more than $500 million has been spent since the end of the last season in June. That, as those same owners are unanimous in their resolve not to operate under that system ever again because too many teams are losing money. And they say they won't let the players come back unless they agree to drastically reduce their share of the growing revenue pie (from 57 to 43 percent), agree to entry contracts that last five years, agree that they can't become free agents until they've played or 10 seasons, or the age of 30, and agree that the longest contract they can sign is for five years.
You get the feeling, however, that even if the players agreed to all of those terms (and they never will) the owners would still find a way to circumvent their own agreement and be begging for more player concessions at the end of the new CBA.
But the head-scratching hypocrisy isn't limited to greedy, egomaniacal owners. They players claim solidarity. Yes, each individual has his own contract which can be five or ten times the amount his linemate is paid, but they all pay union dues; on for all and all for one. On the other hand these spoiled, millionaire hockey players have absolutely no rerspect for fellow hockey players outside the NHL.
They have no compunction whatsoever of putting other hockey players out of work in Europe or Russia. Hockey players who are not as well paid, but are playing a game for a living and likely raising a family on that income. So the lockout isn't just bad news for die-hard hockey fans, its even worse for these journeymen players in the KHL (Russia), Swedish Elite League and assorted leagues in Germany, Austria, Italy and Denmark.
In the real world when a company locks out its unionized workers (say plumbers or electricians), those workers are paid a stipend by their union, will picket their place of work, educate the passing public to the dispute and are would not be welcomed by other unionized shops that employee people of their ilk. The NHL Players Association should respect other player associations and the livelihoods of their fellow hockey players everywhere. Period.
Forgotten in all this hard-line posturing by billionaires and multi-millionaires are the fans. Will they come back next season like they did after the one-season shutdown seven years ago? Hard to say. Perhaps a second go-rpound in less than a decade will be too much for some, especially in those marginal, money-losing, fan-depleted marks like Phoenix and Florida.
Me? I like hockey, not necessarily the NHL brand. In fact I haven't supported a professional NHL team since 1968.
I'm a Toronto Maple Leafs fan.
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