December 10th, 2004

The 24 Percent Solution

Wow. Give the NHLPA credit, because they've thrown the owners on the defensive with a proposal that's headlined with a 24 percent rollback in player salaries.

As Tom Benjamin notes, that's nearly $17 million transferred from Alexi Yashin's pocket back to New York Islanders owner Charles Wang. It's kind of tough to characterize an offer like this as a non-starter.

To be fair, lets take a look at the union's talking points:

1. 24% Compensation Rollback

2. Future Salary Restraints (Entry Level System, Qualified Offers and Arbitration)

3. Payroll Tax

4. Revenue Redistribution Plan

5. Joint Player-Club Committees

6. Ongoing Adjustments and Updates

But, as always, the devil is in the details. That's why the union has made a complete copy of the proposal available to anybody who wants one. That's right -- the same proposal NHL Comissioner Gary Bettman and company will be reviewing over the weekend in lieu of Holiday shoping. All in all, it's a dramatic improvement in strategy and tactics over the first few months of the lockout. And combined with the new look of the NHLPA Web site, it finally looks like Bob Goodenow is putting some of those dues to good use in the union's IT department.

Here's Bettman:

"The Union presented us with a proposal today that, clearly, they worked on for a long time. We wanted to give it at least a preliminary review before making any comments.

"We will not discuss any of the specifics until we formally respond to the Union. To do otherwise would not be constructive to this process. However, I will acknowledge that one aspect of the proposal is very significant. That element is a recognition by the Union of our economic condition -- but it is a 'one-time' element.

"We have said consistently that the focus must be on the overall systemic issues and the long-term needs and health of the game. We will fully review the Union's proposal and respond next Tuesday. It is our present intention to make a counter-proposal."

Here's what James Mirtle thinks Bettman is really saying:

Aside from the huge upfront offer of slashing payrolls, this deal would in essense leave things entirely the same. A 20% luxury tax on payrolls over $45-mil is nothing, and things in the NHL would be helped only very slightly and for a short period of time by this deal. This is not a significant offer, and there is absolutely zero chance the league will accept this.

The NHL will try to appear as though they are negotiating in good faith so that they can declare a labour impasse next September. Despite the appearance of movement, this is still a chess match. Don't believe everything you're hearing.

Dog Breath Canada feels the same way. And James also takes some time to bash union-shill Larry Brooks.

Then again, the proposal has put the league in a tough spot if the ultimate plan was to break the union, as The Rodent notes:

Even if Commissioner Gary Bettman is dead-set against the Union's proposal, it is not in the league's best interests to discard the plan out of hand. If for no other reason, it would be risking the wrath of the fans, let alone the National Labor Relations Board.

Remember that an "impasse" is the result of negotiations in good faith. Talking and not listening is what the league has been guilty of to-date. They will not make that mistake again.

The league has promised a transcript of last night's press conference. Click here for the archive.

Other roundup posts:

Sharkspage, Buffalo Sabrehood, Binford's Blogspot, Puck Update, Hockeybird and the unstoppable Jamie Fitzpatrick.

More later as commentary warrants.

2 Responses to “The 24 Percent Solution”

  1. Nicanor says:

    Eric,

    some interesting reporting in the Pittsburgh Post Gazette on this proposal.

    Salary rollback plan intrigues NHL

    Friday, December 10, 2004
    By Dave Molinari, Pittsburgh Post-Gazette

    TORONTO — The proposal was bold. Dramatic. Unexpected.

    Bob Goodenow, executive director of the NHL Players Association, undoubtedly planned it that way.

    And not surprisingly, that’s the way NHL commissioner Gary Bettman took it.

    The centerpiece of the NHLPA’s contract proposal to the league during a three-hour negotiating session yesterday at the Air Canada Centre was a 24 percent rollback on existing contracts, a move union officials said could save teams $269 million during the coming season.

    “Once the system is adjusted, it stays there,” Goodenow said. “This is not just a one-time issue. It’s an ongoing issue.”

    In addition to the salary rollback, the players’ proposal included:
    A “luxury tax” on salaries. For payrolls in the $45 million to $50 million range, the penalty would be 20 percent. For those from $50 million to $60 million, it would be 50 percent, and for those $60 million and above, the penalty would be 60.

    Cutting the entry-level salary cap from $1,295,000 to $850,000, with only a quarter of that total, rather than half, payable as a signing bonus. Goodenow projected the change would save $345 million over six years.

    Giving teams the right to take a restricted free agent making $1.5 million or more to salary arbitration without extending him a qualifying offer.

    Revenue-sharing features designed to lift the income of the 15 clubs with the league’s lowest revenues to within 30 percent of the top 15 teams.

    Having NHL players agree to participate in the next two Olympics.

    the whole thing is here:
    http://postgazette.com/pg/04345/424830.stm

    Dejan Kovacevic: Any offer in which one side is willing to concede $600 million over three years — that is the PA’s estimate, but there is some credibility to the figure — simply has to be considered a serious one.

    The 24 percent giveback, I feel, is jarring. Not so much because the union did not have it to give. But rather, because it is a tangible sacrifice for the future of the union being made by the current membership. Moreover, it is a sacrifice being made on the backs of the highest-paid players, something not commonly done in major professional sports.

    the whole thing here:
    http://postgazette.com/penguins/questions/

  2. The thing that made me laugh in the NYT version:

    Bettman refused to go into details about the offer and added that, should the union do so, “that would cause me to question their motives.”

    The union immediately followed Bettman’s briefing with an elaborate and detailed presentation in a hotel ballroom downtown, with Goodenow flanked by seven top players on the bargaining committee. It was shown on national television in Canada.Heh. I guess there’s still a long way to go…

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