There are two men who work in the WUYS offices…
Or rather one man and one very adorable intern.
Chocolate Iced is the sole voice of reason in this estrogen-filled den of hockey immorality.
While he might not post often, when he does, he brings a certain wisdom and insight that we appreciate and value. Not to mention the math skillz we lack.
Hi there. Chocolate Iced here to give you the skinny on unfortunate lack of NHL hockey at the moment. Everything you wanted to know about the nuts and bolts of the current NHL labor dispute can be found here.
In 2005, the NHL and the NHLPA (the players’ union) negotiated a collective bargaining agreement (“CBA”) that put in place a so-called “hard salary cap” for the first time.
You’ll recall that this CBA was reached only after the entire 2004-2005 season was lost to a lockout. At the time, the salary cap was the main issue, with the owners essentially claiming that the players made too much money and the skyrocketing player salaries needed to be reigned in. In the beginning, the salary cap was set at $39 million per year, per team. That salary cap has crept up, until this past season it was set at $64.3 million while the salary cap floor, or the minimum a team had to spend, was $48.3 million.
So, you might be thinking that the owners effectively triumphed after the ’04-’05 lockout with the cap.
And they did.
Except they didn’t, according to themselves.
Under the terms of the same CBA that just expired on September 15th, the players were entitled to 57% of last season’s hockey related revenue generated by the league. Now, the league claims that this figure, 57%, needs to be reduced because many NHL teams are effectively bleeding money and player contracts are out of control.
I know what you are thinking.
You’re thinking, “Aren’t the owners the ones who give these huge contracts to players?” And you’re also thinking, “Wait, doesn’t the league have record revenue right now of over $3.3 billion (US).”
The answers are yes and yes.
The owners essentially want to pay the players less, far less, than the $1.87 billion the players were paid in the previous season and save themselves from giving out big contracts to players. The league’s initial offer would have the players earning 43% of hockey related revenue. The last offer from the league had the players getting 49% in the first season of the CBA and then backing down to 47% as the CBA expired over 5 years.
This would effectively have the players giving back millions of dollars to start. There are also a few tweaks to free agency that the owners want (10 years of service before a player is eligible for free agency, elimination of arbitration, etc.), however the money pie and how big of a slice the players get is still the main issue.
The players for their part, are not interested in giving back money to the owners, unless that money will be used by the league for revenue sharing to assist weaker small-market teams. You know, those teams that the league claims are bleeding money. The union effectively wants to ensure that the players get no less than the $1.8 billion they got last year.
The players’ last offer was a little complicated, but essentially they want to take a 2% increase over the $1.8 billion figure in the first year, a 4% increase from that in year 2, and a 6% increase over that in year 3. After that, it gets a little nutty so I won’t get into that. What’s key though, is that the players have positioned their numbers based on 7.1% revenue growth, which is what the league had after the last work stoppage.
Over the course of 5 years, the two sides have a difference of around $1 billion. The 7.1 % revenue growth is important because that’s a big “if.” There are no guarantees that the league revenue will grow at that rate going forward.
At the end of the day the players want to ensure they keep at least the $1.8 billion they received last year, and the owners want to reduce that figure upfront. Unfortunately there seems to be no end in sight to this dispute. It seems that both sides have some room to give.
I hope they figure out how to split up their $3.3 billion sometime soon.
Contact CI at firstname.lastname@example.org.