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Players say 50-50 a lot closer to a deal, but it’s certainly not an automatic

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The NHLPA will be mulling over a 50-50 revenue share with the NHL today as the league’s lockout continues.

The NHL came to the players with a proposal on Tuesday and are now awaiting a response from the union.

Players told the Free Press on Tuesday night they viewed the offer "as a start," and the union will work on a counter-proposal today and perhaps table an offer of its own on Thursday in meetings in Toronto.

What will the players be thinking as they work with union head Don Fehr to craft a proposal?

We’re not sure what they’re saying today but we know what they were thinking back in August when the Free Press first suggested 50-50 was a solution to the league’s problems.

The players accurately see the drop from 57 per cent to 50 per cent as a major reduction in their share of the revenue pie. They believe they gave to the league during the last go round of CBA talks and they did.

The players also view the reduction of revenue percentage as a potential loss in future salaries. As revenues grow, the players will get a smaller chunk of the growth.

An email was sent to me from the players’ side after first suggesting 50-50. The email was meant to shed light on the union’s position and was written in an educational manner and not confrontational.

Some of the points the email made at the time were based on the league’s offer of 43 per cent it also deals with 50-50. Clearly the union was against 43 per cent and didn’t even consider it a starting point. Fifty-fifty was less offensive but it wasn’t considered a slam dunk by the union back in August. What we’re hearing from players now is 50-50 is a lot closer to a deal, but it’s certainly not an automatic.

I sent out an email this morning to see if the original position was still held.

"Clarification on the numbers, the drop to 43% was 24% reduction in salaries, as I emailed you in the summer. The drop the NHL is now looking for from 57% to 50% is a reduction of 12.3% or $231M. This in light of the NHL’s revenues growing from $2.1B to $3.3B after 7 years of record revenues," was the response from the players’ side this morning.

Here’s the text, other than pleasantries, from the original email.

 "League hired gun Arthur Levitt claimed prior to 2004-05 lockout that Player salaries were eating up 75 percent of league revenues. Salaries dropped dramatically to 54% in current CBA and up to 57% as revenues grew. That is a massive decrease for the players."

"Owners are proposing that players receive 43% (after new HRR definitions they are seeking) which is a 24% rollback on the 57% Players receive now. Each % point under the current definition of HRR is roughly $33 million (over a 5-year deal, that would amount to well over $2 billion in the reduction of player salaries). This would equate to a larger reduction than what players took in the 2004-05 lockout, and would reduce player compensation to at or below 2003-04 levels."

"Considering that the NHL has set revenue records the last 7 years under this CBA (revenues increased to $3.3 billion this past season – up from roughly $2.1 billion in 2003-04) the league is looking for players to agree to see none of the increase in revenues since the lockout going forward."

 "At the 50/50 split you are proposing, you are taking the position that the players, who have helped the league grow to reach these new revenues, should see very little of the increase in revenues since the lockout going forward."

  gary.lawless@freepress.mb.ca

Twitter: @garylawless

TSN has obtained a letter from NHLPA union leader Donald Fehr to players and agents. Here are some excerpts:

"Simply put, the owners' new proposal, while not quite as Draconian as their previous proposals, still represents enormous reductions in player salaries and individual contracting rights. As you will see, at the 5 per cent industry growth rate the owners predict, the salary reduction over six years exceeds $1.6 billion. What do the owners offer in return?"
 
"The proposal does represent movement from their last negotiating position, but still represents very large, immediate and continuing concessions by players to owners, in salary and benefits (the Players' Share) and in individual player contracting rules."
 
"They want to "clarify" HRR definition and rules. It is not immediately clear what this means, but so far all of their ideas in this regard have had the effect of reducing HRR, and thereby lowering salaries."
 
"The Players' Share is reduced to 50 per cent from 57 per cent immediately -- this season. This is a reduction in the share of 12.3 per cent. On last year's revenue numbers, this would mean that players' salaries would be cut by about $231 million."
 
"The proposal includes a "Make Whole" provision, to compensate players for the anticipated reduction in absolute dollars from last year (2011-12), to this year and next year. However, it would work like this. The Players Share in subsequent years would be reduced so that this "Make Whole" payment would be made. It is players paying players, not owners paying players. That is, players are "made whole" for reduced salaries in one year by reducing their salaries in later years."
 
"Finally, they also proposed that the players could appeal supplemental or commissioner discipline to a neutral arbitration, on a "clearly erroneous" standard, which, as a practical manner, makes it very unlikely that any decision would be overturned."
 
"We do not yet know whether this proposal is a serious attempt to negotiate an agreement, or just another step down the road. The next several days will be, in large part, an effort to discover the answer to that question."
 
"Bear in mind the approach that the Players have taken to these negotiations. It is:
 

  • Given the enormous concessions players made in the last round, plus 7 years of record revenue reaching $3.3 billion last season, there is no reason for a reduction in the amount the players receive.
  • Players are willing to take reduced share going forward so that the NHL can grow out of whatever problems some franchises face.
  • The player contracting rights secured in the last negotiations should be, at minimum, maintained.
  • Revenue sharing needs to be enhanced and structured so as to encourage revenue growth by the receiving teams.
  • The overall agreement has to be fair and equitable for both parties. Bargaining is both give and take."
History

Updated on Wednesday, October 17, 2012 at 9:16 AM CDT: Adds proposals.

9:50 AM: Adds the letter TSN obtained from NHLPA union leader Donald Fehr to players and agents.

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