TSN.ca Staff
12/13/2004
The outlook for this National Hockey League season has never been more bleak than it is today.
TSN has obtained a copy of a confidential eight-page memorandum sent by the NHL to all 30 member clubs, outlining the league's reaction to the NHL Players' Association proposal of last week and clearly stating the NHL's intention to reject the proposal and counter with one of its own.
"In sum, we believe the Union's December 9 CBA proposal, while offering necessary and significant short-term financial relief, falls well short of providing the fundamental systemic changes that are required to ensure that overall League economics remain in synch on a going-forward basis," NHL executive vice president Bill Daly wrote in the Dec. 12 memo which went to all governors and alternative governors, including many NHL general managers. "While the immediate 'rollback' of 24 per cent offered by the Union would materially improve League economics for the 2004-05 season, there is virtually nothing in the Union's proposal that would prevent the dollars 'saved' from being re-directed right back into the player compensation system, such that the League's overall financial losses would approach current levels in only a matter of a couple of years."
The memo reiterated NHL commissioner Gary Bettman's intention to provide a counter-proposal to the NHLPA at a 1 p.m. meeting on Tuesday in Toronto. The memo said the counter proposal "will be an appropriate response to the Union's offer and will ensure the League's future stability and long-term health."
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In other words, the counter-proposal is likely to contain "cost certainty" or a linkage between salaries and revenues, which the NHLPA sees as a "salary cap" and a non-starter for negotiations.
Not only does this league document provide a specific reaction to every aspect of the NHLPA's Dec. 9 proposal, but also "cynically" questions the motives of the NHLPA, especially with regard to the proposed salary rollback of a whopping 24 per cent.
"We believe the Union's offer was more about trying to unify the players and ensure player solidarity with what they would perceive as a very substantial proposal than it was about making a good faith effort to reach agreement us..." Daly wrote. "...The Union needed the 'rallying point' that it felt this offer would provide with the players to effectuate this strategy. Under this scenario, the Union will likely (and quickly) break off negotiations."
The league document does not specifically spell out what may be in the NHL's counter-proposal, but does touch on some of what will be part of it, including the abolition of salary arbitration in its entirety and a "restructuring" of the NHLPA's 24 per cent salary rollback.
"We plan to make a counter-offer to the Union on Tuesday in Toronto consistent with our mandate from (the governors) in that regard," the memo said.
It's not difficult to figure out what will be in the counter proposal when you look at how the league reacted to the NHLPA's specific proposals:
On the NHLPA-proposed 24 per cent rollback for all existing contracts, the NHL reaction is: "...(while) the Union's offer in this regard was significant in the same approximate range of magnitude that will be necessary, we believe the 'rollback' should be structured among the players in a more equitable manner than the Union's current proposal envisions."
On the NHLPA-proposed changes to the entry-level system, the league's reaction is: "...we do not believe the Union's proposed changes to the Entry Level System go far enough...while the Union's proposed changes to the Entry Level System are positive and, in certain cases, might lead to cost savings, history has proven that because there is no absolute limit on the amount an Entry Level Player can earn in a given year, the Entry Level Salary Cap can (and will) still easily be circumvented."
On the NHLPA-proposed changes to the qualifying offer system, the league reaction is: "We do not believe the proposed changes to the level of required Qualifying Offers are meaningful, and certainly would not result in the savings of the magnitude projected by the Union."
On the NHLPA-proposed changes to salary arbitration, the league reaction is: "We believe these changes would have very limited impact (if any) on a Club's or League-wide economics...We intend to reiterate our proposal to eliminate salary arbitration in our next offer to the Union."
On the NHLPA-proposed luxury tax system that would start with a tax of 25 per cent on payrolls over $45 million with additional tax rates at thresholds of $50 million and $60 million, the league reaction is: "...the Union's actual proposal on Thursday demonstrated its continuing objective to avoid at all costs placing meaningful restraints on a Club's ability to spend excessively on player salaries...we remain firmly opposed to any new economic system that is premused on salary restraints encouraged by a luxury tax...The League's economic problems are too significant, and the future success of this sport too important, to accept a system based on projections and guesswork, particularly when we believe that the underlying dynamics of operating af team will not have been addressed."
On the NHLPA-proposed revenue redistribution plan which would see high revenue teams provide funds for lower revenue teams, the NHL reaction is: "we envision a revenue sharing pool that will be funded primarily by a portion of revenues generated in the Stanley Cup playoffs," as opposed to revenue sharing on the basis of regular-season revenues.
Clearly, in spite of the NHLPA offer of last week, the two sides could not be further apart. With both sides so entrenched in their current positions on the issue of cost certainty or linkage or salary cap, there is no reason to believe there will be any negotiations coming out of Tuesday's session in Toronto.
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NHL to reject NHLPA proposal
NHL to reject NHLPA proposal -
12-13-2004, 02:14 PM
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