June 22, 2012; Pittsburgh, PA, USA; NHL Commissioner Gary Bettman on stage at the 2012 NHL Draft at CONSOL Energy Center. Mandatory Credit: Charles LeClaire-US PRESSWIRE

NHL Opens Collective Bargaining Agreement With Its Proposal, volume 1

According to Renaud P. Lavoie of RDS.ca (Bell Media in Montreal) and Larry Brooks of the NY Post,  the NHL has opened negotiations with the Players Association (PA) and put forth its opening salvo.

  1. Reduce the Hockey Related Revenue sharing from its current rate of 57% to 46%
  2. Redefine what is Hockey Related Revenue
  3. 10 season in the NHL before a player becomes an Unrestricted Free Agent
  4. Contracts of no more than five years in duration
  5. Eliminate salary arbitration
  6. Entry level contracts be extended to five years versus current three years
  7. Salary cap set as four million above median value, salary floor eight million below
  8. Eliminate salary bonus payments
  9. Salary level would have to be the same throughout the entire maximize proposed length of the five year contract

I’m going to take the first two as they are related. What is the current hockey related revenue (HRR) as currently defined? For the 2011-2012 season, it was three billion dollars. As currently executed, the players get 1.71 billion dollars. Under the new proposal that amount would be reduced to 1.38 billion (321 million dollar). Divide that amount amongst the 30 NHL teams and you get a reduction of 10.7 million dollars per team. That reduction would be applied to player compensation only.

Some questions immediately surface. Would that 10.7M reduction be applied across the board (23 man roster) or would a couple of superstars make their current money and the rest of team sop up the leftovers? I can see the smaller market teams like Phoenix, Carolina, and Columbus not being impacted by the reduced amount. Teams that spend to the cap (Canadian markets, Chicago, Philadelphia, Pittsburgh, NY Rangers) would be more severely impacted. Regardless of the market size, the players on the ice  and in the press box are going to receive less money.

The NHL has taken great pride and talks about it often (Commissioner Gary Bettman on his XM Home Ice radio show) that league revenue has grown by more than 1 Billion dollars since the last CBA was signed in 2005. That 1B dollars means the owners have received an increase of 430 Million dollars over the past 7 years and they want another 321 million dollars in the next CBA.

How does the NHL and NHLPA define HHR?

Here you go, from their CBA that expires September 14, 2012.

“Hockey Related Revenues.” “Hockey Related Revenues” or “HRR” for each League Year means the operating revenues, including Barter (as defined below), from all sources, whether known or unknown, whether now in existence or created in the future, as expressly set forth in this Section 50.1(a), of each Club or the League, for or with respect to that League Year, as expressly set forth in this Section 50.1(a), on an accrual basis, derived or earned from, relating to or arising directly or indirectly out of the playing of NHL hockey games or NHL-related events in which current NHL Players participate or in which current NHL Players’ names and likenesses are used, by each such Club or the League, or attributable directly to the Club or the League from a Club Affiliated Entity or League Affiliated Entity, as expressly set forth herein, and is subject to any inclusions or exclusions as expressly set forth in the Article 50.

Tomorrow, we will further examine how HHR is defined.

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Tags: Gary Bettman NHL NHLPA

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