NHL, NHLPA separated by $6.5 million
Canadian Press
2/15/2005
NEW YORK (CP) - The NHL season will be cancelled Wednesday unless the league and the NHL Players' Association can find a way to bridge a $6.5-million US gap in their salary cap proposals.
Despite a crazy 48 hours which saw both sides in the labour talks break down barriers that had existed for more than two years, the season may still go down the tubes at a 1 p.m. EST news conference with commissioner Gary Bettman.
''Given the distinction that exists at midnight (Tuesday), to allow our industry to lose a season would be criminal,'' said a veteran agent who requested anonymity, pointing to the relatively small gap remaining between the two sides.
The league took less than an hour to reject the NHLPA's offer of a $49-million team-by-team salary cap Tuesday night, sticking to the $42.5-million submission it made earlier in the evening.
''If every team spent to the $49-million level you have proposed, total player compensation would exceed what we spent last season and, assuming for discussion purposes, there was no damage to the game, our player compensation costs would exceed 75 per cent of revenues,'' Bettman wrote in his second letter of the day to NHLPA executive director Bob Goodenow. ''We cannot afford your proposal.
''Our offer of earlier (Tuesday) was a $75-million increase over the offer we made (Monday). I hope you will accept it, and that we can move forward and negotiate the myriad of other issues that need to be addressed.''
After that rejection, Goodenow fired a letter back at Bettman just after midnight.
''Your claim that the clubs cannot afford our proposal is based on your hypothetical fear of what would happen ''if every team spent to the $49-million leve the players have proposed,''' wrote Goodenow. ''The notion that every club will spend at the $49-million level is contradicted by years of actual payroll experience under the old CBA system . . .''
Goodenow ended on an ominous note.
''You willl receive nothing further from us,'' he wrote.
Ted Saskin, his right-hand man, was more outspoken.
''It was Gary's choice at crunch time to refuse engaging in any negotiation and instead hide behind a series of ludicrous hypothetical fears to completely mischaracterize the impact of what we had proposed,'' Saskin said. ''Gary's actions (Tuesday) put the lie to months of NHL rhetoric about how much flexibility they would have in a financial negotiation once certain philosophical differences could be set to the side.'' Industry sources insist the magic cap number would be $45 million, and that may yet find its way into another offer before this is all over.
Goodenow had taken just over four hours to turn down the league's offer of a $42.5-million salary cap, an offer Bettman warned did not warrant further negotiations.
''We wish that the NHL had offered a `no linkage' proposal before (Monday) so that negotiations in that arena could have commenced sooner,'' Goodenow wrote in a letter to Bettman. ''However, we recognize that they did not and we agree that time is short.
''In that spirit, and in a final attempt to reach an agreement, we are adjusting our offer of (Monday) in two respects.''
Bettman's four-paragraph response was quick to find the union head office in Toronto.
''It was disappointing to receive the fax of your `final' offer,'' Bettman wrote.
The commissioner had warned the NHLPA not to try and re-negotiate the league's final offer, but he may regret the damning tone in his letter. The take-it-or-leave-it approach was surely not a big hit with players.
The league has given the association until 11 a.m. EST Wednesday to accept its final offer, one which featured a $42.5-million cap, with a luxury tax of 50 per cent on payrolls from $34 million to $42.5 million.
''This offer is not an invitation to begin negotiations - it's too late for that,'' Bettman wrote Goodenow. ''This is our last effort to make a deal that's fair to the players and one that the clubs (hopefully) can afford.
''We have no more flexibility and there is no time for further negotiation.''
Offers from both sides in the last two days included a salary rollback of 24 per cent on all existing player contracts and covered six full seasons.
Aside from dropping its cap figure from $52 million to $49 million on Tuesday night, the union also restructured the exception provision so that teams can only go over the cap twice during the six-year term and ''for up to only 10 per cent over the limit of $49 million (to $53.9 million), at the tax rate of 150 per cent.''
The rest of the luxury tax would worked like this: 25 per cent on $40 million-$43 million, 50 per cent on $43 million-$46 million and 75 per cent from $46 million-$49 million. The deal also included a minimum payroll of $25 million.
The NHLPA's previous offer Monday allowed provisions for teams to spend as much as 10 per cent more than that on three occasions in a six-year period. The luxury tax worked at 25 per cent on $40 million-$44 million; 50 per cent on $44 million-$48 million; 75 per cent on $48 million-$52 million and 150 per cent on $52 million-$57.2 million.
The league's $42.5-million salary cap would be the figure for all six years of the new collective bargaining agreement.
Counting the rollback of 24 per cent, four teams are currently over the $42.5-million figure and that's before signing any free agents. Detroit ($43.38 million), New Jersey ($46.32 million), Philadelphia ($50 million) and Toronto ($46.6 million) would be over. Dallas ($40.77 million) and Colorado ($40.27 million) would be on the bubble without signing anyone else.
The average team payroll last season, adding the salary rollback, would have been $33.95 million.
So, the NHL's deal would definitely have a salary drag on the big spenders, but yet not to the point where owners would get ''cost certainty'' because the league dropped its long-standing demand of a fixed link between player costs and revenues.
''I know, as do you, that the `deal' we can make will only get worse for the players if we cancel the season - whatever damage we have suffered to date will pale in comparison to the damage from a cancelled season and we will certainly not be able to afford what is presently on the table,'' Bettman wrote to Goodenow.
''Accordingly, I am making one final effort to reach out to make a deal that will let us play this season.''
The league offer Tuesday came around supper time. It appeared the door leading to a possible solution had finally started to open following the Monday night revelation that the NHLPA had changed direction at the final turn and offered to play under a $52-million salary cap. The league, meanwhile, moved by proposing a $40-million salary cap with no ''linkage'' to revenue.
Each side rejected the other's offer but a major buzz was created in the hockey world. The last-minute change in negotiating strategy represents a quantum leap for both sides. The players have insisted a salary cap was a non-starter while the league has built its case around so-called cost certainty - linking player costs to revenue.
''The buzzwords are off the table now, it's a business discussion now not a philosophical argument and that's good,'' Devils GM Lou Lamoriello said from New Jersey.
Flyers player rep Robert Esche said the surprising compromise was welcomed.
''I'm sure not everybody is happy out there. I'm sure there's some players not happy with a hard cap and some owners not happy at not having linkage,'' he said. ''But, hey, it's a give-and-take world. Now it seems we're just down to numbers.''
The unexpected developments Monday probably surprised and unsettled many on each side.
''Am I excited about a salary cap? No,'' said Calgary star Jarome Iginla. ''But it's about trying to get a deal done.''
Richard Peddie, president and CEO of Maple Leafs Sports and Entertainment, deflected a question about what the owners had given up by taking the linkage issue off the table.
''All I can tell you is that we've been kept apprised and we'd really like to play hockey this year,'' he said. ''But it has to be the right deal, even for the Toronto Maple Leafs.
''Even our revenues are drying up, believe it or not. We want a deal that's also good for the Leafs.''
Even if it is too late to save the season, the change in positions may still set the stage for a settlement that could pave the way for the entry draft and a more normal offseason.
The whirlwind exchange of salary cap offers began during a secret meeting Monday in Niagara Falls, N.Y., between Saskin, the NHLPA's senior director, and NHL executive vice-president Bill Daly.
The Philadelphia Inquirer and others reported Tuesday that Flyers centre Jeremy Roenick, along with Iginla, St. Louis's Chris Pronger and others, urged the union leaders to put a cap with no linkage on the table in a bid to save the season.
''I was involved with a group of NHL players who were trying to get to as many people as possible to come on board with a resolution that works for both sides,'' Roenick told the Inquirer. ''The proposal has to have a number that is not tied to revenues.''
Iginla played down any role he may have had.
''I have talked to Pronger and Roenick but also to many guys around the league, because we're interested in what's going down,'' he told CP. ''But ultimately, it's the committee that's doing all this, not me.
''If people ask me my opinion, I'll give it, and I have.''
Iginla and Esche both shot down other reports saying the group of players actually had a proposal for the league.
The developments Monday might also have an impact on the league's ability to declare legal impasse down the road if there's no deal and the season is cancelled. The union could perhaps argue to the U.S. National Labor Relations Board that there is no impasse in talks because the philosophical issue of a salary cap is no longer the deal-breaker.
The NHL is hoping to avoid becoming the first major professional league in North America to cancel a season from beginning to end.
''I'm extremely concerned,'' said Flyers captain Keith Primeau. ''The biggest thing that disturbs me is everyone's true misunderstanding of the fan base.
''You hear how certain people believe that the hardcore fan will definitely return, that the damage isn't irreparable. I think that's a huge miscalculation or judgment in error of who and what your fan base is. That, I think, is going to alarm a lot of people when the doors are re-opened.''
Through Tuesday, 834 of the 1,230 regular-season games have gone by the wayside.
If an agreement can still be reached, the league has a shortened schedule ready to go that would see teams play 28 regular-season games, playing only within their conference. The playoffs would stay the same.
Cheers,
Aquaman
