NHL releases details of latest CBA offer

NHL releases details of latest CBA offer
October 17, 2012, 7:01 pm
Share This Post

In a highly unusual collective bargaining move, the NHL publicly released the details on Tuesdays latest offer to the NHLPA. NHL Deputy Commissioner Bill Daly indicated that the league was going to these lengths to clarify some of the "widespread reports attempting to describe and characterize the terms of the offer that understandably are incomplete."

Below is the complete offer made by the NHL, which was described by one NHLPA source as a handful of double-spaced pages in length. Not exactly what one would expect to be a binding document for the next 6-7 years of hockey, but perhaps a nice starting point for something more concrete down the road.

Its pretty clear that the actions of the NHL over the last two days are meant to save the 82-game regular season, but the 5050 offer and the transparency one day later will also gain overwhelming public support from a fan base that simply wants hockey.

NHL PROPOSAL TO SAVE 82-GAME SEASON

1. Term:

Six-year Agreement with mutual option for a seventh year.

2. HRR Accounting:

Current HRR Accounting subject to mutual clarification of
existing interpretations and settlements.

3. Applicable Players Share:

For each of the six (6) years of the CBA (and any additional
one-year option) the Players Share shall be Fifty (50)
percent of Actual HRR.

4. Payroll Range:

Payroll Range will be computed using existing methodology. For
the 201213 season, the Payroll Range will be computed
assuming HRR will remain flat year-over-year (201112 to
201213) at 3.303 Billion (assuming Preliminary Benefits of
95 Million).

201213 Payroll Range
Lower Limit = 43.9 Million

Midpoint = 51.9 Million

Upper Limit = 59.9 Million

Appropriate Transition Rules to allow Clubs to exceed Upper
Limit for the 201213 season only (but in no event will Clubs
Averaged Club Salary be permitted to exceed the pre-CBA Upper
Limit of 70.2 Million).

5. Cap Accounting:

Payroll Lower Limit must be satisfied without performance
bonuses.

All years of existing SPCs with terms in excess of five (5)
years will be accounted for and charged against a teams Cap
(at full AAV) regardless of whether or where the Player is
playing. In the event any such contract is traded during its
term, the related Cap charge will travel with the Player, but
only for the year(s) in which the Player remains active and is
being paid under his NHL SPC. If, at some subsequent point in
time the Player retires or ceases to play andor receive pay
under his NHL SPC, the Cap charge will automatically revert
(at full AAV) to the Club that initially entered into the
contract for the balance of its term.

Money paid to Players on NHL SPCs (one-ways and two-ways) in
another professional league will not be counted against the
Players Share, but all dollars paid in excess of 105,000
will be counted against the NHL Clubs Averaged Club Salary
for the period during which such Player is being paid under
his SPC while playing in another professional league.

In the context of Player Trades, participating Clubs will be
permitted to allocate Cap charges and related salary payment
obligations between them, subject to specified parameters.
Specifically, Clubs may agree to retain, for each of the
remaining years of the Players SPC, no more than the lesser
of: (i) 3 million of a particular SPCs Cap charge or (ii) 50
percent of the SPCs AAV (Retained Salary Transaction). In
any Retained Salary Transaction, salary obligations as between
Clubs would be allocated on the same percentage basis as Cap
charges are being allocated. So, for instance, if an assigning
Club agrees to retain 30 of an SPCs Cap charge over the
balance of its term, it will also retain an obligation to
reimburse the acquiring Club 30 of the Players contractual
compensation in each of the remaining years of the contract. A
Club may not have more than two (2) contracts as to which Cap
charges have been allocated between Clubs in a Player Trade,
and no more than 5 million in allocated Cap charges in the
aggregate in any one season.

6. System Changes:

Entry Level System commitment will be limited to two (2) years
(covering two full seasons) for all Players who sign their
first SPC between the ages of 18 and 24 (i.e., where the first
year of the SPC only covers a partial season, SPC must be for
three (3) years).

Maintenance of existing Salary Arbitration System subject to:
(i) total mutuality of rights with regard to election as
between Player and Club, and (ii) eligibility for election
moved to five years of professional experience (from the
current four years).

Group 3 UFA eligibility for Players who are 28 or who have
eight (8) Accrued Seasons (continues to allow for early UFA
eligibility -- age 26).

Maximum contract length of five (5) years.

Limit on year-to-year salary variability on multi-year SPCs --
i.e., maximum increase or decrease in total compensation
(salary and bonuses) year-over-year limited to 5 of the value
of the first year of the contract. (For example, if a Player
earns 10 million in total compensation in Year 1 of his SPC,
his compensation (salary and bonuses) cannot increase or
decrease by more than 500,000 in any subsequent year of his
SPC.)

Re-Entry waivers will be eliminated, consistent with the Cap
Accounting proposal relating to the treatment of Players on
NHL SPCs playing in another professional league.

NHL Clubs who draft European Players obtain four (4) years of
exclusive negotiating rights following selection in the Draft.
If the four-year period expires, Player will be eligible to
enter the League as a Free Agent and will not be subject to
re-entering the Draft.

7. Revenue Sharing:

NHL commits to Revenue Sharing Pool of 200 million for
201213 season (based on assumption of 3.303 Billion in
actual HRR). Amount will be adjusted upward or downward in
proportion to Actual HRR results for 201213. Revenue Sharing
Pools in future years will be calculated proportionately.

At least one-half of the total Revenue Sharing Pool (50) will
be raised from the Top 10 Revenue Grossing Clubs in a manner
to be determined by the NHL.

The distribution of the Revenue Sharing Pool will be
determined on an annual basis by a Revenue Sharing Committee
on which the NHLPA will have representation and input.

For each of the first two years of the CBA, no Club will
receive less in total Revenue Sharing than it received in
201112.

Current Disqualification criteria in CBA (for Clubs in Top
Half of League revenues and Clubs in large media markets) will
be removed.

Existing performance and reduction standards and provisions
relating to non-performers (i.e., CBA 49.3(d)(i) and 49.3
(d)(ii)) will be eliminated and will be adjusted as per the
NHLs 731 Proposal.

8. Supplemental and Commissioner Discipline:

Introduction of additional procedural safeguards, including
ultimate appeal right to a neutral third-party arbitrator
with a clearly erroneous standard of review.

9. No Rollback:

The NHL is not proposing that current SPCs be reduced,
re-written or rolled back. Instead, the NHLs proposal retains
all current Players SPCs at their current face value for the
duration of their terms, subject to the operation of the
escrow mechanism in the same manner as it worked under the
expired CBA.

10. Players Share Make Whole Provision:

The League proposes to make Players whole for the absolute
reduction in Players Share dollars (when compared to 201112)
that is attributable to the economic terms of the new CBA (the
Share Reduction). Using an assumed year-over-year growth
rate of 5 for League-wide revenues, the new CBA could result
in shortfalls from the current level of Players Share dollars
(1.883 Billion in 201112) of up to 149 million in Year 1
and up to 62 million in Year 2, for which Players will be
made whole. (By Year 3 of the new CBA, Players Share
dollars should exceed the current level (1.883 Billion for
201112) and no make whole will be required.) Any such
shortfalls in Years 1 and 2 of the new CBA will be computed
as a percentage reduction off of the Players stated
contractual compensation, and will be repaid to the Player as
a Deferred Compensation benefit spread over the remaining
future years of the Players SPC (or if he has no remaining
years, in the year following the expiration of his SPC).
Player reimbursement for the Share Reduction will be accrued
and paid for by the League, and will be chargeable against
Players Share amounts in future years as Preliminary
Benefits. The objective would be to honor all existing SPCs by
restoring their value on the basis of the now existing level
of Players Share dollars.