Chip McCleary

"Pipe down, boss. Im only on level 2. I dont fight you until the last level. Deflex, you'll hurt yourself, Joel878 -- systemtool"

Madison, WI • United States • 41 Years Old • Male

Critiquing the NHL's proposal [Part 1]

Much has been written about the NHL's latest offer to the NHLPA, tendered October 16. Instead of getting into the numbers [which require various assumptions] and debating the merits, I'll focus on the actual details of the offer and discuss whether they should be acceptable to the NHLPA. In no particular order:

1. Term
The NHL proposes a 6-year CBA with a "mutual option for a 7th year." You can safely bet that one side will opt out of the 7th year as the offer is currently written. Given that some of the terms of the offer will cause problems, it's very likely that the proposed CBA will have to be adjusted by then. Ideally, the new CBA should have a term in the 8-10 year range, but that also relies on fixing all of the problems in the 2005 CBA.

2. HRR Accounting
Assuming that the NHL is correct in stating that the definition of HRR will not change except where both sides have already agreed, this shouldn't be a sticking point at all. I'm not familiar with the various issues here, but I suspect these can [should] be easily reconciled.

3. Players Share of Revenues
The NHL's offer is a flat 50/50 split for all years, which is what many fans have proposed. The catch is that the split kicks in immediately, which means the players will have to pay for the decrease via escrow. The NHLPA is loathe to do this - and for good reason. The players won't be asked to take a salary rollback, but will be taking a de facto one via escrow at any percentage under 57%. Part of this may be unavoidable; certainly, the owners are not going to want to pay out 57% in the 1st year [this is what the NHLPA effectively offered to start with]. However, there's other ways to get to the 50/50 mark.

One workable way would be to step down in increments. A step down to 53.5% in Year 1, followed by Year 2 at 50%, 3 years at 49% and then a step-up to 50% would accomplish a few things: (1) it would alleviate to some extent the problem with dealing with contracts already signed and effective in 2012-13, (2) it would give time for teams and players to adjust to the lowered threshold in future years, and (3) would cause [within a couple hundredths of a percent] HRR over the life of the new CBA to be split 50/50 between both sides.

4. The Payroll Range
The NHL's proposal lowers the cap floor and cap ceiling for '12-13 to $43.9 million to $59.9 million, but allows teams to exceed the $59.9 million cap without penalty. In effect, it rewards those teams who elected to knowingly [over]spend this past summer. While I don't have a problem with teams going over the cap due to transitioning to the new CBA, I don't think that ability to do so should come for free. For all the comments about a luxury tax, this would be a great place to impose one; teams who can get under the cap can do so and avoid the tax - those who can't would have to pay for the ability to be over.

5. Limits on Contracts
The NHL proposes two major changes: (1) a cap of 5 years on salary length, and (2) limiting changes in salary by year to no more than 5%. Both of these are intended to fix the problem with potential cap-circumventing contracts, and to help limit salaries. Neither change will have that intended effect, though.

As long as all years of a contract are played out, in the end "$ incurred against the cap" will equal "$ paid to the player while in the NHL." If that happens, then how salary is structured in a contract is wholly irrelevant, as is the maximum length of any contract. That's not to say there shouldn't be some kind of limit on contract lengths [see below] but the proposed change isn't the way to do it. There are perfectly legitimate business reasons why salary can [and should] vary by year, and imposing a limit on how much salary can change reduces the flexibility that teams had while also making the salary cap system harder.

The limit on contract lengths will actually drive up salaries - and for good reason. Do you ever hear about players getting offered a choice between 2/10 and 4/28? Of course not; players are always given a choice between more money and less security, or greater security but less money. Capping contracts at 5 years will simply turn 12/64 deals into 5/40 deals. IMO, there's no reason to cap contracts at 5, 7, or even 8 years. Teams have always had the ability to not hand out long contracts; they've simply lacked the ability to say "no" - and I see no reason to save them from their own stupidity.

The correct way to deal with max contract lengths is to specify a range, depending on the player's age at the time he signs [which is what many fans really are arguing for]. When someone says "I think there should be a 5-year max length," when you ask if it's OK if a 38-year old signs a 5-year deal the instant response is "well no, that's too long." That argues for a max length based on age. My suggestion has been [and continues to be]:

-- If the player is 36 or younger at the time the contract takes effect, the max length is the greater of 3 years or 36 less the player's age.
-- If the player is age 37-39, the max length is 2 years.
-- If the player is age 40, the max length is 1 year.

6. Supplemental and Commissioner Discipline
Bluntly put, the standard for "clearly erroneous" is missing and intentionally ambiguous. The NHLPA has asked for appeals to go to other than the Commissioner; there's no reason that shouldn't happen. The comments about "additional procedural safeguards to protect Player interests" are meaningless without context. The NHLPA will [and absolutely should] fight here for better clarity and better protection.

The second part of the critique will be posted shortly.

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