More Talks, No Progress

It's been over a month since I've last written on this blog thanks to the NHL lockout. I still wrote about the Toronto Marlies here and here and also did some articles about the Ryerson Rams Volleyball teams here, here and here. But I've kept my eye on the NHL lockout and after today's big meeting, there is lots to talk about. Those that follow me on twitter know that I got really excited when the NHLPA came out and said no progress had been made; a nearly identical press conference to the one only one month ago. I'm going to collect those thoughts into a more organized article than quick 140 character tweets, and explain what happens now as the lockout nears day 70.




First, a quick recap of how things played out today. The two sides met on Monday and decided that this morning (Wednesday) the NHLPA would make another proposal to the league. They met at the league head offices in New York at 10:30 a.m. and the union presented their position. When the meeting ended shortly after 11:30, it was decided that they would take a lunch break and then meet again to get a response from the NHL. This was great news. The players took to twitter and the press and were all really excited to here a response.The NHLPA even sent out this memo to the players and the press, which highlighted exactly what was proposed in the meeting.

At 1:00, the two sides returned to the offices the NHL presented their thoughts on the proposal. The internet waited in anticipation  with hope of a new deal being signed this week very much on everyone's mind. But just like they did in October, the NHL crushed the NHLPA proposition, and Donald Fehr was forced to come back to the media and say it's "a disappointing day." Gary Bettman spoke soon afterwards and echoed Fehr with "we are still far apart." Certainly not a good way to end a negotiation.

The most interesting quote to come from Bettman was when he said the league "is losing $18-20 million a day" and the "players are losing $8-10 million a day." If they know they are losing money, why aren't they getting a deal done. That answer lies in a fancy little thing called the "Make-whole agreement." Both sides have agreed on the 50/50 revenue split that was the centre of the last big meeting. And they have agreed that the players should get some form of compensation for cutting their percentage. That compensation is the make-whole agreement, which originally came up in the first ever 50/50 proposal made by the NHL that offered the players $211 million spread out in set amounts over the seven years. In all three offers the NHLPA returned with that week, they proposed a make-whole that would pay them $592 million over seven years. This was a big reason for the quick rejection the NHL made back then.

This time around, the NHLPA lowered their make-whole by close to $200 million to about $393 million spread out over the first four years of a five year deal. This was the biggest change to the new deal, but still not enough of concession for the owners. This issue is the new revenue problem. How much money are the players entitled to on top of their salary and revenue share? The owner's seem to think $211 million is a number set in stone, and have yet to show any inclination to negotiate it. Bettman seems to think the NHLPA have to give them everything, which is basically what happened in 2005.

Back then, the owner's wanted to put a salary cap in place that would balance the rosters out and make all the team's competitive. Naturally, the players didn't want this as it would cut into how much they go paid. To reach the deal, the owner's offered them majority share in the revenue, so the players made up for lost salary in the money earned by the league. That share grew every year in small increments, and the league (and player salaries) grew too. Now the owners want to reclaim part of the revenue for themselves, and so the make-whole agreement was devised as a way that gave the players their money, just not from revenue. Only this time the agreement will expire after a certain amount of time, and the players will get less money every year, regardless of revenue. Until the two sides can agree on make-whole amount, a full agreement cannot be reached.

So what happens now? This week, more games and the All-Star games will be cancelled. The games cancelled will equal 400 games total cancelled so far and will set the league back until at least December 15th, maybe later. There are no further talks planned as of this writing, and it is likely there will be more talks on minor issues before they go back to this big issue again. But if the NHL does not make their own offer and only relies on the offers tabled by the NHLPA (which they haven't liked so far) then the season will probably be cancelled and a deal won't be struck until the summer. The league is on the brink right now and is in need of a full effort from both sides. Otherwise, there will be no hockey this season.

While you wait for the lockout to end, visit my website, www.jbenny.com and my other blog, jbennymovies.wordpress.com and follow me on twitter at @jbenny15.