Friedman: NHL and NHLPA "quietly renegotiating CBA" (upd: neither party opts out for 2020)

[Ted Hoffman]

I'll float the contract length proposal I suggested back in 2012: the maximum contract length for a player would be

1. For a player age 36 or less when the proposed contract takes effect, the greater of (a) 3 years, or (b) 36 less the player's age when the contract takes effect.
2. For a player age 37-39 when the proposed contract takes effect, 2 years
3. For a player age 40 or greater when the proposed contract takes effect, 1 year

It still gives teams the flexibility to go 12-15 years if they're still stupid enough [because I don't think teams should be saved from themselves], but that contract has to end by the time the player hits age 36. It clearly prevents teams from taking contracts out until the player is clearly beyond his expected playing age; in other words, no more Chara / Pronger / Luongo / Hossa type contracts.

So, yeah - teams can do a 13-year contract. However, I'd include a set of provisions that apply to any contract of 7 years or longer:
1. In the 7th and later years of the contract, if the player is no longer playing in the NHL the full cap hit still applies,
2. The cap hit in #1 applies to the signing team and cannot be transferred to any other team,
3. A buyout of the contract does not eliminate the cap hit in #1, and
4. The contract cannot be placed on LTIR at any point even in the event of a bona fide injury to the player that causes him to be unable to render his playing services to the team.

Teams regain flexibility, but get potentially punished for being morons - and, there's no "get out of jail free" card available.

 

[Mickey Marner]

This news fills me with cautious pessimism. The average player doesn't have a proper understanding of how their escrow system works. I don't think they're looking two years down the road at a US TV deal -that currently has a total value approximate to the AAV of the NBA's TV deal- and seeing $$$. Or, at least they shouldn't be. And if they are, why wouldn't you choose to elevate the cap? Or, y'know, make sure your SPC expires then, so you can re-up on all this newly available dough.

They likely get bent over a third time. But hey, maybe sans the work stoppage this time.

 

[LadyStanley]

Some of the issues with longer contracts include the inability to have them covered by insurance. I think the max length covered by insurance is five years.

The biggest issue with long term contracts is the front loading. This lead to Luongo's cap recapture penalties.

 

[Tawnos]

This news fills me with cautious pessimism. The average player doesn't have a proper understanding of how their escrow system works. I don't think they're looking two years down the road at a US TV deal -that currently has a total value approximate to the AAV of the NBA's TV deal- and seeing $$$. Or, at least they shouldn't be. And if they are, why wouldn't you choose to elevate the cap? Or, y'know, make sure your SPC expires then, so you can re-up on all this newly available dough.

They likely get bent over a third time. But hey, maybe sans the work stoppage this time.

For the negotiations, I'm not sure it matters how much the average player really understands the escrow system.

 

[The Shrike]

As long as Fehr is in charge of the NHLPA expect there to be lockouts. Perhaps if the NHLPA had an exec that actually cares about the players instead of trying to beat the league in terms of CBA, then these lockouts wouldn't be happening. It was Fehr and the 94 MLB strike that caused the world series to be cancelled is the exact reason why you don't start a season with out a CBA in place.

As long as Bettman is in charge of the NHL, expect a lockout...it's the only play in his playbook, and they weren't all with Fehr as head of the NHLPA.

 

[gstommylee]

As long as Bettman is in charge of the NHL, expect a lockout...it's the only play in his playbook, and they weren't all with Fehr as head of the NHLPA.

Do you think Betttman likes workstoppage? no Things would get done with out workstoppage if the NHLPA head actually cares about the players instead of his pride. Also Bettman isn't the one that waits till the 11th hour then tries to negotiate.

 

[WingsMJN2965]

I don't think either side is gonna want to f*** with a lockout considering the incoming TV contract.

Current TV deal is worth $200M/year. The landscape of TV has changed since they signed their last deal, with more sports broadcasters (CBS Sports, FS1 and FS2, Etc) as well as streaming services. (ESPN+) Networks are starved for content, which is why a company with absolute shit ratings like the WWE can get a 5 year, $2B contract for one 2-3 hour show per week.

Consider the NBA makes $2.7B a year. If the NHL made just over a third of that, which is reasonable, they'd go from $200M/year to $1B a year in TV rights alone.

Worth noting that would also increase the cap by about $12.5M.

 

[The Shrike]

Do you think Betttman likes workstoppage? no Things would get done with out workstoppage if the NHLPA head actually cares about the players instead of his pride. Also Bettman isn't the one that waits till the 11th hour then tries to negotiate.

It isn't about his pride, every single CBA he uses a lockout, and every time he does so he gets concessions from the players. Logic says he'll go to the well again, and he'll win again, which is why he does it.

 

[gstommylee]

I don't think either side is gonna want to **** with a lockout considering the incoming TV contract.

Current TV deal is worth $200M/year. The landscape of TV has changed since they signed their last deal, with more sports broadcasters (CBS Sports, FS1 and FS2, Etc) as well as streaming services. (ESPN+) Networks are starved for content, which is why a company with absolute **** ratings like the WWE can get a 5 year, $2B contract for one 2-3 hour show per week.

Consider the NBA makes $2.7B a year. If the NHL made just over a third of that, which is reasonable, they'd go from $200M/year to $1B a year in TV rights alone.

Worth noting that would also increase the cap by about $12.5M.

And 2 new NHL markets.

 

[Ted Hoffman]

Consider the NBA makes $2.7B a year. If the NHL made just over a third of that, which is reasonable, they'd go from $200M/year to $1B a year in TV rights alone.

Worth noting that would also increase the cap by about $12.5M.

The NHL isn't getting 1/3rd of the NBA network deal from any of the U.S. networks. $500 million per? Perhaps; I'd say that's way up on the upper end. I wouldn't base expectations on what the NHL could get from a bloated NBA contract that ESPN lobbed out nearly unprompted other than to head off competition on the next contract, and which by all accounts is losing money.

1/3rd of the NBA network deal after you add in the Rogers contract for the Canadian teams? There's a better chance of that happening.

 

[WingsMJN2965]

The NHL isn't getting 1/3rd of the NBA network deal from any of the U.S. networks. $500 million per? Perhaps; I'd say that's way up on the upper end. I wouldn't base expectations on what the NHL could get from a bloated NBA contract that ESPN lobbed out nearly unprompted other than to head off competition on the next contract, and which by all accounts is losing money.

1/3rd of the NBA network deal after you add in the Rogers contract for the Canadian teams? There's a better chance of that happening.

We'll see. Networks are desperate.

FWIW, $1B is the ceiling I'm looking at. I can see it being anywhere from $600M - $1B.

 

[gstommylee]

It isn't about his pride, every single CBA he uses a lockout, and every time he does so he gets concessions from the players. Logic says he'll go to the well again, and he'll win again, which is why he does it.

I was never talking about bettman's own ego. I was talking about Fehr since he intentionally pushes it to the last second to try to leverage the NHL. Bettman locks out the league then to give into Fehr's ego.

Bettman would rather avoid a lockout if he can however he does it cause Fehr leaves him no choice. We wouldn't be seeing lock out after lock out after lock out if NHLPA has a union head that actually cares about the players and not his own pride.

Fehr doesn't care about the players. All he cares about is making the NHL cave and screw themselves. NHL isn't stupid to play that kind of game.

 

[mouser]

We'll see. Networks are desperate.

FWIW, $1B is the ceiling I'm looking at. I can see it being anywhere from $600M - $1B.

That seems highly optimistic to me to get a 3x-5x increase, assuming similar contract length. I’d guess more in the 2x-3x range, but I’ll admit I haven’t put a lot of time into researching the recent landscape and appetites among the potential bidders.

One other thing to keep in mind, generally TV contract payments escalate over the term of the contract. So even if the league said went from the $2b/10 year deal to a $6b/10 year deal that doesn’t necessarily mean the tv dollars immediately increase by 3x when the new deal takes effect. The final year of the $2b deal is probably paying more then the $200m average, and the first year of the hypothetical $6b deal would probably be less then the $600m average. So the cap pop year to year switching to the new deal should be less then the 3x average values of the new and old contract.

 

[Grudy0]

I was never talking about bettman's own ego. I was talking about Fehr since he intentionally pushes it to the last second to try to leverage the NHL. Bettman locks out the league then to give into Fehr's ego.

Bettman would rather avoid a lockout if he can however he does it cause Fehr leaves him no choice. We wouldn't be seeing lock out after lock out after lock out if NHLPA has a union head that actually cares about the players and not his own pride.

Fehr doesn't care about the players. All he cares about is making the NHL cave and screw themselves. NHL isn't stupid to play that kind of game.

Allow me to play contrarian.

"I was talking about Fehr since he intentionally pushes it to the last second to try to leverage the NHL."

Yet the NHL intentionally leveraged the NHLPA - the NHL terminated the CBA 15 May 2012 and everyone knew it was coming, but only submitted a proposal to the NHLPA on 14 July, two months prior to the NHL's training camps and lockout deadline.

"Bettman would rather avoid a lockout if he can however he does it cause Fehr leaves him no choice."

Bettman has locked out the players on three separate occasions, but only once was Fehr head of the union. Therefore, Bettman doesn't appear to be avoiding a lockout; maybe Bettman is the problem.

"Fehr doesn't care about the players. All he cares about is making the NHL cave and screw themselves. NHL isn't stupid to play that kind of game."

In 2012, the NHL terminates the CBA they signed after cancelling an entire season to get, then waits two months before the lockout deadline in order to make the NHLPA "cave and screw themselves". Looks like the Bettman is playing the exact same game that Fehr is being accused of doing.

 

[MNNumbers]

Allow me to play contrarian.

"I was talking about Fehr since he intentionally pushes it to the last second to try to leverage the NHL."

Yet the NHL intentionally leveraged the NHLPA - the NHL terminated the CBA 15 May 2012 and everyone knew it was coming, but only submitted a proposal to the NHLPA on 14 July, two months prior to the NHL's training camps and lockout deadline.

"Bettman would rather avoid a lockout if he can however he does it cause Fehr leaves him no choice."

Bettman has locked out the players on three separate occasions, but only once was Fehr head of the union. Therefore, Bettman doesn't appear to be avoiding a lockout; maybe Bettman is the problem.

"Fehr doesn't care about the players. All he cares about is making the NHL cave and screw themselves. NHL isn't stupid to play that kind of game."

In 2012, the NHL terminates the CBA they signed after cancelling an entire season to get, then waits two months before the lockout deadline in order to make the NHLPA "cave and screw themselves". Looks like the Bettman is playing the exact same game that Fehr is being accused of doing.

Obviously true. Again, one must consider this from the viewpoint that it is 'negotiations' about big sums of money. We want to think it's sports, and it's about the game, but the negotiations for the CBA are not really about the game, they are about money.

In every negotiation that comes down to money, nothing happens until there is leverage. I have a good friend who works in the agriculture industry. There, the questions are contracts for feed, contracts for selling the animals to market, etc. He says happens in his industry as well.

No good negotiator is going to want to move first, because moving first adjusts the line as to what the finish will be. This is the reason that Bettman and the BOG first offered a 43/57 split instead of a 50/50 split. Everyone knew it would end up at 50/50, but......the prior CBA was 57/43 players. Say Bettman starts at 47/53. Now, Fehr, says "Hey, I don't think we want a cap at all, but if you must, how about 54/46...." And, so on. Moving first gives the other side real estate to defend. It's like giving away rope in tug of war.

No one is going to do it. This is simply the fact of life.

Here is a quick calculation: I think we have played 6.5 seasons since the last one was signed. Right off the top of my head, the average of the cap has been 70M (this is back of napkin stuff), and escrow has been about 8% on average. That means the players have received about 64M * 6.5 years, or about 420M in salary in that time. Thus HRR has been about 840M during that time. They lost about 30M (again, this is a rough calculation) in the lockout). From there, it's an easy calculation to see that reducing the players' share to something like 46% or even 47% would have cost them money in the long run.

That means that the 3% is worth fighting for, and that's the reason that their head negotiator isn't going to give away anything when there isn't any leverage.

 

[patnyrnyg]

Are you suggesting this last Labor deal, including the last 24 years is a good deal for baseball? The current system is an embarrassment , and pretty much all fans agree it is s joke unless you're a Yankees or Red Sox fan . Fehr basically ruined baseball , and it shows in the ratings. A few select teams have a chance of winning each year. Fehr also was the chief punk who led the Expos out of Montreal with his cancelled season. Fehr is a menace, and he will lead the players to the slaughter house again this time around if he thinks escrow is a problem. If this bozo negotiates escrow, he will basically be negotiating against the NHLPA and the owners will bend him over the barrel.

The MLBPA is by far the strongest union in NA pro sports, I'd say Fehr did something right. This is a business first and foremost. Fehr's job is to get the best possible deal for the players. How is he "leading players to the slaughter house"? Since 1994, we have had 13 different teams win the World Series. 14 different teams win the Cup, 14 different teams win the Super Bowl, and 11 win the NBA title. Seems like MLB is right on par with the other leagues.

 

[LadyStanley]

Networks are starved for content, which is why a company with absolute **** ratings like the WWE can get a 5 year, $2B contract for one 2-3 hour show per week.

OT UFC's move from Fox to ESPN: mainstream gravitas, oversaturation

Uh, nope. They provide more that just the "one show per week" with library of historic events as well.

 

[WingsMJN2965]

OT UFC's move from Fox to ESPN: mainstream gravitas, oversaturation

Uh, nope. They provide more that just the "one show per week" with library of historic events as well.

Did you post the wrong thread, or misread WWE as UFC?

Or is there something about WWE behind the paywall that I can't see? I doubt WWE is giving anybody else access to their library, considering that's a big selling point for their network.

 

[LadyStanley]

Mma= Wwe = ufc in my mind

 

[patnyrnyg]

With a hard cap, I am questioning if there is really a need for RFA/UFA and even a draft.

I understood the owners desire for the RFA/UFA designation and the compensation with the CBA of 95. There was no salary cap and that was a way to control some of the salaries. However, what does it accomplish with a hard cap? The teams are allowed to spend $81.5MM per year on players. If Aho was simply an FA and Montreal signed him for $12MM per, that is less they have to spend on other players. Some teams would go top-heavy with a few $10MM+ players and fill in the roster, some would go with a more balanced approach.

As far as the draft, the NFL instituted it in 1936 to control costs. Beforehand, teams were outbidding each other for players coming out of college. The draft ended that practice. But now, why is it needed? Again, teams can spend $81.5MM on players. You have the minimum age of 18. Can still keep the clause preventing CHL players from playing in the AHL until they age out of Jrs. If an 18 year old is not good enough to play in the NHL, they simply do not get signed until someone is ready to bring them to the NHL or they are eligible to play in the AHL as they work their way up. I have heard the argument that the teams with the most money will get the best young players and it is non-sense. How would Toronto be able to sign Hughes or Kakko this year with their cap situation? If the Devils wanted Hughes bad enough this year and wanted to offer him $20MM per year to sign, so what? They would be stuck with it if he busts and if not, it just leaves them less money to extend guys or sign new guys down the road. I see it similar to the International signing bonus money of MLB. Each team is allowed to spend $5MM per year in signing bonuses for Int'l players. The other day, the Yankees signed a 16 year old from the DR for their full allotment of a $5MM. Other teams will sign multiple players and spread the money out. MLB is a different animal in that there is no hard cap.

 

[MNNumbers]

In response to pat....

I can see the different designations being a benefit to both the players and management. It's a way of making sure that players have production at the NHL level before being paid higher dollars. Without the draft, for example, if all players were FAs, then the arms race would be "Who is willing to pay this prospect more?" and that would skew the pay scale.

I think both existing players and GMs like it the way it is for that reason. Existing players want their share, and GMs are glad for anything which allows them to pay for production without needing to make hard decisions themselves.

However, a hard cap without a draft or any RFA or UFA rules would be an interesting world, for sure.

 

[powder88]

Hi Guys...posting in this "Business" thread for the first time but I wonder about this HRR discussion and the battle over concussion responsibility. Here's my question:

If the NHLPA is of the stance that concussions, and their long term health impacts, are directly and inextricably linked to playing hockey, does that not mean that every penny they get the owners to pay is a hockey related expense? In other words, would a significant cash settlement not impact the HRR for that year and could the players' position backfire on them?

This is certainly not beyond any moral boundary of Bettman's.

 

[LadyStanley]

Expenses <> HRR

HRR = Hockey Related Revenue. It is explicitly defined in the CBA. Expansion fees, for instance, are not HRR.

What is? TV, radio revenue, % of merchandise sales, ticket revenue, % of suite revenue, sponsorship, etc.

Salaries (and other player benefits, including health insurance), coaching staff, front office, scouting, travel are expenses.

 

[LadyStanley]

LeBrun Notebook: ‘This was never going to work for...

Paywall.

LeBrun suggests that the NHLPA might be interested in moving up free agency (say starting the last Friday in June) in part to avoid Canada Day and could be part of the negotiation in the new CBA. The long negotiating period this year was "too long". Next year might only be a day or two.

 

[patnyrnyg]

In response to pat....

I can see the different designations being a benefit to both the players and management. It's a way of making sure that players have production at the NHL level before being paid higher dollars. Without the draft, for example, if all players were FAs, then the arms race would be "Who is willing to pay this prospect more?" and that would skew the pay scale.

I think both existing players and GMs like it the way it is for that reason. Existing players want their share, and GMs are glad for anything which allows them to pay for production without needing to make hard decisions themselves.

However, a hard cap without a draft or any RFA or UFA rules would be an interesting world, for sure.

I don't think it would skew anything. Teams still have $81.5MM to spend. I get why the GM's like it, as it saves them from themselves and why the veteran players like it as it gets them more money. My point is it just isn't necessary for "cost certainty" which was the reason for the cap in the first place.