The day has arrived folks. As of midnight Saturday night the league officially locked out its players. Judging by the comments from both sides of the impasse it would seem as if the chasm is too great, that the differences between the league and the NHLPA are insurmountable. This belief seems to have permeated to the NHL fan base who support a business that generated somewhere in the neighborhood of $3.3 billion in revenue last year.
Everywhere I turn, Facebook, Twitter, or wherever, fans are expressing their anger; mainly towards Gary Bettman and the owners but even some directed at the players. Fans are afraid of a long lasting lockout and the sense given off by the two sides of late has only reinforced the fear we might be without hockey for a while.
What’s hard to understand though is just exactly how far apart the two sides are? Obviously the farther apart they are the longer it would seem a lockout would stretch. But what if the two sides are closer than it appears? Might it then plausible the two sides could come together and a swift conclusion to this mess be reached?
Let’s look at the most recent proposals made by each side (per that infinite repository of hockey knowledge, ESPN) and compare the two to see just how far apart they are in terms of dollars. For this purpose I have built in 7.1% increases in league revenues for each of the subsequent seasons covered under each respective proposal to create an apples-to-apples comparison. Historically that is the average that revenues have grown per season under the current CBA. I’ve also calculated the projected salary cap ceilings and floors under each proposal using the same formula in place today. Let’s see how different the two sides really are.
Strictly looking at the numbers the differences in the player’s share in terms of dollars ranges anywhere from roughly $157 million (low) in year two to just more than $228 million (high) in year six. The cap figures proposed in each deal demonstrate a sizable difference. From the current cap ceiling as provided by the recently expired CBA, to the NHL-proposed ceiling there’s a difference of nearly $9 million. In the proposal made by the players the upper limit decreases by just short of $3 million.
It appears on the surface as if there is a sizable gap. Ultimately it seems likely the two sides will end up meeting closer to an even 50/50 split of revenues when all is said and done. The question is how to get to that point quickly enough to appease owners without forcing the players to take as heavy a hit in the short term as provided for in the league’s offer.
The biggest problem to me is that the players, under the owners’ proposal, would be required to give up too much too soon. I feel a more gradual decrease to the players’ share is a more workable solution. Here’s a little something I prepared as a compromise between the two parties using the same total revenue figures.
Comparing my hypothetical solution first to the players proposal show the players giving up a touch more in year one (less than $10 million total) but making that up in year two (more than $17 million in additional funds for the players). Over the first five years my idea would require the players to cede a total of about $175 million; or an average of approximately $35 million per season.
Weighing my proposal against that of the owners shows the players would receive an additional $150 million on average per year using my calculations. It might appear my proposal favors the players somewhat over the owners, and that may be true to a degree, but what it does do for the league is bring the player’s share down to 50% in manner that is at least manageable for the players.
Assuming revenues continue to grow at the same pace it has in the years since the last lockout, the salary cap upper limit will be virtually what it would have been this year under the expiring CBA in time for the 2013-2014 season. That doesn’t seem too bad for the players. Yet the owners eventually get close to what they want even if it isn’t at the pace they would prefer. To me this seems like a win/win.
Even if the breakdown as I proposed isn’t good enough for both parties I have to believe it’s close enough to something that would. The other issues are ancillary and of little importance compared to the splitting of revenues. I’m just a dumb ass fan. Maybe there is a flaw in my idea; an idea which took me all of 15 minutes to work out on an excel spreadsheet by the way. The bottom line is the league has seen an increase of 50% in league revenues since the NHL resumed play after the last lockout. These guys need to figure this out quickly. If they don’t everyone, and I mean everyone, loses. From my vantage point, and the vantage point of most fans, it shouldn’t be this hard to figure out.
The bigger problem is that neither side wants to give off the impression that they blinked first. If the players appear to give in at all to the league then the owners could construe that as a weakness they can further exploit the next time these parties meet to negotiate a new CBA. The owners don’t want to give in because they don’t want the players to gain any leverage for future negotiations.
It’s time for someone to step up and get this thing solved. The money aspect really isn’t that complicated as I believe I have demonstrated. The players are willing to give back as the owners have asked but not at the pace the league has proposed. Common ground is there for the taking if the two sides would just walk a little wyas towards each other.
Personally I couldn’t care less which side “blinks” first. The fans won’t remember that once hockey games are being played again. We will remember, and fondly I might add, the first person that breaks the ice in this negotiation. During the last lockout it was Brendan Shanahan who organized a summit of sorts to discuss the implementation of rule changes designed to improve the flow of the game. That discourse actually assisted in ending that work stoppage. Most fans remember and are grateful to Shanny for his efforts. The question is who is going to be that guy this time around.
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