We barely avoided a lockout in the NFL last season and suffered a lockout-shortened season in the NBA. But if there is one professional sports league that isn’t going down the arduous, protracted and bitter collective bargaining route, one would have to think it would be the NHL.
After all, just eight years ago the league and its fans were devastated by the loss of the entire 2004-05 season when the players and owners couldn’t come to an agreement and the entire 88th season of play was canceled.
That CBA that the two sides agreed on prior to the 2005-06 season has run its course, and over that span the NHL has gone from having a very unbalanced economic environment to one that is — at least on the surface — successful and thriving. Prior to the lockout, league revenues were at $2.2 billion. Last season, the league’s revenues clocked in at $3.3 billion. Surely, the pie is now big enough to divvy up equally and keep everyone happy.
Sept. 15 is a key date as that’s when the lockout will begin, assuming there is no agreement. At this point, the gap between the players and owners is so wide that it’s hard to envision there being any kind of common ground before then.
The league and its owners have drastic changes they’d like to make. They’re asking for the players to take a large pay cut, dropping their share of the revenues from 57 to 43 percent. If that’s not demanding enough, they would like players to work for 10 years before hitting unrestricted free agency, get rid of salary arbitration and signing bonuses and limit player contracts to five years. They’re also looking at a massive restructure of how the salary cap is calculated (changing the cap from $8 million above the median league revenue to $4 million above).
If the league were to play out the 2012-13 season under current rules, next year’s salary cap would be $70.2 million and the floor — the minimum that each team must spend — would be $54.2 million. Under the owners’ new proposal, next year’s cap would be at $50.8 million and the floor would be $38.8 million. That’s a massive difference.
What the players — and many of the fans — can’t seem to understand is why the league is asking for such gigantic pay cuts. Back in the 2004-05 season, the league was broken. At that point, the economics had to be restructured for the league to function properly. Since revenues have increased $1.1 billion since then, it’s hard for the league to claim that they are in such dire straits this time around.
The owners have argued that while the salary cap has helped, the formula for how it’s calculated hasn’t been ideal. The league calculates the cap based on how much money it makes, averages it out per team and then adds $8 million to that number. The problem is that teams like New York and Toronto are doing well and have contributed more to the league-wide revenues, but teams like Tampa Bay and Phoenix haven’t. So when the numbers are calculated, the salary floor works for teams that are making money but it also forces the teams that aren’t making enough to spend a mandatory number of dollars on salaries — a number that they occasionally cannot afford.
Still, the players believe that there is no need for wholesale changes and that some simple revenue sharing among the teams can cure all the ailments. Although only a handful of people have actually seen the books, at face value, the players’ argument seems to make sense.
The saving grace here is that the owners could be bluffing. If the players are right and the league is mostly profitable, then the owners won’t want to employ a lockout because they are going to give up profits. It was one thing for them to enforce a lockout back in 2004 when many of the teams were going to lose money anyway because the economics were broken. It’s going to be something else for them to have a lockout when so many teams are going to lose profits.
Considering league commissioner Gary Bettman made $8 million last season and two of the league’s best players, Sidney Crosby and 60-goal scorer Steven Stamkos each made less, that could give a hint as to what type of financial shape the league is really in. If that’s the case, expect the owners to ease off their stern demands and find some common ground with the players before any regular season action is missed.
If the players and owners reach a deal in time for the season to start, Bovada has odds on which clubs are best positioned to walk away with Lord Stanley's Cup next June. The New York Rangers and Pittsburgh Penguins are currently co-favorites, with each team going off at 8-1 odds. The Rangers and Penguins finished with the top two point totals in the Eastern Conference in the 2011-12 regular season, but the Penguins were shocked by the Flyers in the first round of the playoffs, while the Rangers lost to the Devils in six in the Eastern Conference Finals.
The Vancouver Canucks, winners of the last two President's Trophies are next best at 10-1, while last year's champs, the Los Angeles Kings, are right behind at 12-1. The Flyers and Bruins, the 2011 Cup champs, round out the top six at 13-1 and 16-1, respectively.
Photo via Facebook/Los Angeles Kings from B/R