Thinking Outside the Box
It’s no secret there’s a significant gap between the high and low revenue clubs in the National Hockey League. While teams like Florida, Nashville, and St. Louis showed last season they can compete on the ice, it’s a far different story away from the rink. This is one issue the NHL and the NHLPA can certainly agree on.
You don’t need further evidence from the players as their first proposal was executed close to perfection. They didn’t come out swinging looking to knock out Gary Bettman and his committee. This was purely an attempt to strike a fair deal that works for everyone involved. This doesn’t suggest the NHL won’t identify some holes in the player’s proposal as you can be assured they didn’t like everything. But as one high ranking NHL official told me this evening “It’s a starting point.”
That’s pretty much the best case scenario for NHL fans as training camps are scheduled to open up in just a matter of weeks. The same league source went on to say the player’s proposal “Was better than I expected. It maintains the current structure of our system and recognizes there is a problem that needs fixing.”
This is about as good of a response as anyone could ask for as the real negotiating process gets underway. NHLPA Executive director Donald Fehr was smart in how he played his opening proposal. The creativity that earns players millions of dollars on the ice was displayed as they carefully crafted out an “outside the box” way of thinking so that all 30 clubs can benefit.
In the past the immediate reaction from the owners has been to just take money from the players. This proposal shows that a resolution can be found without hurting either side.
Sure the higher revenue clubs may have to dig a little deeper in their pockets to help out a small market team but at the end of the day what is wrong with that? The NHL has been widely known to have the worst revenue sharing model in professional sports and this would certainly go a long way in correcting it.
In a nutshell the players are telling the owners they’re willing to take less money in salaries over the next few years as long as the wealthy clubs agree to increase revenue sharing to assist in helping the poorer clubs. The smaller revenue clubs will still need to show growth as there’s a concern the current revenue sharing model allows some teams to remain complacent in staying near the bottom. Knowing they’ll be receiving a nice revenue sharing payout after each season allows some teams to fake their way into showing they’re making business strides.
Sources with the NHLPA tell me they fear some teams don’t make the full effort to climb their way out of the financial hole they’re in.
The hard salary cap that was implemented in 2004 remains intact under this proposal as well as player contracts in terms of how they relate to term limits, salary arbitration, and free agency.
By now you have probably read the nuts and bolts of the proposal which include the players offering to cap their salary increases if league revenues continue to rise at the clip we’ve seen over the last several years. In other words club payrolls will no longer be tied directly to revenue in which they rise at the same rate as revenue.
Let Me Buy Your Cap Space?
What you might not have read is the idea of buying cap space from another club to allow a team to take on certain contracts. For example if the Philadelphia Flyers want to take on an $8 million player from the Nashville Predators but have only $6 million of cap space, they can purchase additional cap space from Nashville to allow the player to join their club.
How the NHL responds remains to be seen but I don’t see why small revenue teams would have an issue with this. A team like St. Louis for example doesn’t spend close to the cap so why not sell the remaining cap space you’re not going to use and pocket the additional revenue? You would probably have to set a cap for how much cap space a team could buy otherwise a team like Toronto would have a cap number exceeding $100 million.
Under the NHLPA proposal teams would also have the option to buy/sell draft picks. If a team like the New York Islanders or the Edmonton Oilers feels they have enough prospects stockpiled in their system, they’d have the option of selling a high pick for cash. How much would the fifth overall draft pick go for? This would allow a Vancouver, New York, or Detroit, who almost never have the opportunity to draft in the top five, to buy their way into the top of the first round.
More and more details of the proposal will continue to trickle out in the days ahead. At the very least we can all agree the NHLPA didn’t come out with the same militant, let’s kill the league approach we’ve seen in the past. Even high ranking NHL officials seem happy. One can only hope today is the first step in reaching a resolution.
More to come,