Still Think There Won’t Be a Lockout?

Last week, I wrote a post saying that I didn’t believe the NHL would see another lockout this year (with the caveat that they might lose the preseason, which wouldn’t be a loss in my books).  That was before the media reported on what the owners initial proposal was.  From Puck Daddy:

Renaud P. Lavoie of RDS in Montreal has reported five major points from the NHL’s first CBA proposal, and you may want to sit down, because I’m gonna give it to you straight. If the owners aren’t going to budge from these five points, we are most definitely headed for a lockout:

1. Reduce players’ hockey-related revenues to 46% from 57 %.

2. 10 seasons in the NHL before being eligible for unrestricted free agency.

3. Contracts limited to 5 years.

4. No more salary arbitration.

5. Entry-level contract are 5 years long instead of 3.

Add to that some other revelations by Larry Brooks:

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So, how do I feel about a potential lockout, now that a preposterous offer like this is what the owners are leading off with?

Still not seeing a lockout.  Because the owners are going to budge a lot.

Let’s take these points one by one:

1) Of course the NHL is going to ask for this kind of percentage reduction. Both the NBA and NFL got significantly modified caps, and the NHL owners would be irresponsible not to ask for even more.  If you don’t test the waters, you aren’t going to find out what the market (in this case, the cap) can handle.  Look at the roughly halfway point.  They will get their 50-52%, and be happy with it.  This is just a test.

2) The players got a reduction in free agency age in the last CBA.  The owners want it back.  I see this being a split.

3) Five years is pretty low.  Seven or eight year contract limits?  I can see that.  But I expect the players will fight this one.  Instead, I would be looking for a percentage based rise and fall in salaries over the term of the contract.  That sounds like a more reasonable way to limit contract lengths organically, take out the funny business in CBA circumventing like the Kovalchuk contract, and still allow for a market driven by value.  This seems pretty win – win overall.  See below in the Larry Brooks evaluation for a little more on this.

4)  This won’t happen.  Take it or leave it is not good faith bargaining.  This will go.

5) 5 year rookie contracts?  So half of your restricted career is on a rookie contract?  Look for this to be negotiated to a halfway mark of four years.

And as far as the Larry Brooks tweets:

– Redefining hockey related revenues is a fairly crafty move, but I don’t think Donald Fehr is going to fall for this one.

– If the percentages of the cap change, expect the floor and ceiling percentages to change as well.  This is an issue for the smaller market and smaller budget teams, and they actually need a change in the way the floor works.  But the numbers here will be tied to the cap percentage.  It’s very negotiable.

– As for the signing bonuses, I think bonuses are a scourge of the league, and should be significantly reduced, and rookie contract bonuses should be reduced a little bit.  But I don’t see them going away.  Nor the same salary in each season for the life of the contract.  The owners are shooting themselves in the foot with this aspect, and since they won’t get five-year term limits, they will likely ditch this proposal for something a little more reasonable (see point three above).  Keeping the salary the same over the length of the contract makes it less trade-able.  If you have a sliding salary, you can ditch that onto a budget market if needed.  Handcuffing yourself doesn’t make sense, even if the old system in this regard is broken.  This is why the salary cap hit was averaged over the length of the player’s contract in the first place.

OK, so what next?

Next, the players counter-offer.  And it’s going to be slightly less ridiculous than the one the owners put forth.  But only slightly.  The players would term this CBA into next season if they could.  We will hear that the players aren’t going to fix the system for the owners.  We will hear the words “non-starter’ many times.

This is just how it works.  This proposal was a show of strength, and the owners are going to see what happens next.  There is plenty of time until October.

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