“What I thought started as a promising week ends in disappointment…. In the final analysis, the [NHLPA’s] emphasis was returning to 57 per cent, which obviously isn’t acceptable.” — Gary Bettman

By Steve Farnham, Associate Editor, AllHabs.net

LONGUEUIL, QC. — With the National Hockey League (NHL) less than one week away from officially being in a lockout state, both the owners and National Hockey League Players’ Association (NHLPA) met again this Friday in an attempt to reach an agreement. Although the details of this meeting are still coming in pieces, it’s becoming more and more likely that the start of the calendar will be delayed by some time. Both sides have until next Saturday to reach an agreement before the lockout becomes official.

The owners, represented by Commissioner Gary Bettman offered the players 43 per cent of the league’s annual revenue in their initial proposal, down from the 57 per cent they are making with the collective bargaining agreement that is about to expire.

Let’s first of all clarify that in 2011-12, the NHL had an annual revenue of $3.28-billion. The players, with 57 per cent of league revenue received $1.87-billion of this amount, while the owners received the remaining 43 per cent or $1.41-billion. Let’s also clarify that the NHL estimates that the total league revenue will continue to go up by seven per cent year over year, just as it has done since the previous lockout. This means that the NHL estimates revenues for the next four years to be at:

• 2011-12: $3.28-billion (past year)
• 2012-13: $3.51-billion
• 2013-14: $3.76-billion
• 2014-15: $4.02-billion
• 2015-16: $4.30-billion

The owner’s initial proposal of 43 per cent would see the players receive as low as $1.51-billion of league revenue in 2012-13, while getting back up to $1.85-billion in 2015-16. In their latest proposal, the owners offered the players 46 per cent of league revenue, and this would see the players receive as low as $1.61-billion in 2012-13 (up $100-million from first offer), while getting back up to $1.98-billion in 2015-16 (up $130-million from first offer.)

“There have been some informal discussions about when and under what circumstances (we should talk) and what should the group look like and so on…” – Donald Fehr

The players, represented by Donald Fehr (who was said to be accompanied by Ron Hainsey of the Winnipeg Jets, Zenon Konopka of the Minnesota Wild and Robyn Regher of the Buffalo Sabres) on the other hand are asking for a different set of percentages, which would see them take losses in the first three years in comparison to the 57 per cent they are currently getting, while climbing back up to 57 per cent in the fourth year and going forward. More precisely, the players are asking for the following percentages:

• 2011-12: 57.0 (past year)
• 2012-13: 54.3
• 2013-14: 52.8
• 2014-15: 52.3
• 2015-16: 57.0

(Click image to see larger)

Essentially, the players are offering to give up $445-million over the next four seasons, while getting back to their 57 per cent of revenue in the fourth season. (Average of $111-million per season)

The owners are asking the players to give up $1.716-billion over the next four seasons, in a model that would not see the players get back to 57 per cent but remain at the currently proposed 46 per cent of league revenue. (average of $429-million per season)

The difference between the two amounts works out to $1.271-billion dollars over those four years, or an average of about $317-million per season. To put this $317-million figure into context, if you divide that by the 30 NHL teams, that gives you a little over $10.5-million dollars, which could end up being the amount by which by the cap is reduced next season, when this is all said and done.

Revenue Sharing

As part of the players proposal, the money they would be giving up would go towards a $260-million revenue-sharing pot which would be aimed at helping teams who are struggling financially. On the other hand, the owners propose to increase the current revenue-sharing of $150-million to $190-million.

Although other issues are on the table, such as modifications that the NHL wants to make to free agency and player arbitration, revenue split and revenue sharing appear to be the main topic of the discussions.

I continue to believe that when an agreement is finally reached, whether sooner or later, the league revenue split will be 50/50.

Following Friday’s meeting, Fehr appeared calm as always, stating, “We’re trying to find a way to bridge the gap.”

(Photo: Sitthixay Ditthavong/Associated Press)

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