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NHL's last offer was 'take it or leave it'

That's the message Fehr sends players

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The NHL's last collective-bargaining proposal was essentially a "take it or leave it" offer, subject to tweaks, NHL Players' Association executive director Donald Fehr has told players.

Fehr made that assessment in a memo to players that was obtained by USA TODAY Sports.

In it, Fehr spelled out the details of the three options that the NHLPA presented Thursday in response to the league's offer of an immediate drop of the players' share of hockey-related revenue (HRR) from 57 per cent to a 50-50 split. The NHLPA said that proposal would cost players $1.6 billion over six years based on a 5 per cent growth rate.

The union has said it is willing to yield some future earnings. But it has argued that given that it had accepted a 24 per cent rollback and a salary cap in 2005 and revenues have grown at a record rate, it should not have to give back on existing contracts.

The three counterproposals:

Option 1

Players, who made $1.883 billion in 2011-12, would get set amounts of $1.92 billion, $1.98 billion and $2.06 billion. After that, the players' share would be frozen until revenues reached $4.12 billion (or when $2.06 billion equals 50 per cent of HRR). After that point, the players share is 50 per cent of HRR (plus a small increment if yearly growth exceeds the predicted 5 per cent -- 57 per cent of revenue above 5 per cent and 61 per cent of revenue above 7.2 per cent). Under a five per cent growth rate, the union forecasts a 50-50 split by the fifth year of the deal. If revenue grew 7.2 per cent since the 2004-05 lockout, owners would save $1.1 billion, the NHLPA projected.

Option 2

The players' share would receive 24.7 per cent of growth in HRR, down from the current 57 per cent. "If HRR growth is at the five per cent rate the owners predict, then the players' share falls to 50 per cent in year 5," Fehr wrote. "At 7.2 per cent, the share falls faster." At a 7.2 per cent growth rate, owners would save $1.059 billion.

Option 3

This is the much-talked-about 50-50 split with owners honoring existing contracts. Essentially, players' current contracts would be split into two parts: the 13 per cent they would lose under the owners' proposal and the remaining 87 per cent. The 13 per cent wouldn't count toward the players' share or the cap and the 87 per cent would be subject to the 50-50 split.

Wrote Fehr: "This means that an individual player under an existing contract would receive the 13 per cent segregated, plus a normal payment, subject to escrow, of 87 per cent of his salary. A player with a new contract would have 100 per cent of his salary subject to the 50-50 split. However, since the 13 per cent of existing contracts are off the cap, this should create more cap space, which will be important as the cap will be squeezed. Over time, the existing contracts expire, and the share will fall towards 50 per cent."

NHL deputy commissioner Bill Daly had publicly objected to this proposal, saying players would get a 56 per cent to 57 per cent share in the first year and he doubted that the split would ever reach 50-50.

Commissioner Gary Bettman rejected all three proposals in about 15 minutes, Fehr said. Talking to news reporters, Bettman said the two sides weren't speaking the same language.

The NHL's offer also includes increases in the free agency age and a five-year limit on contracts. It does include a "make whole" method of deferring payments so players don't lose money off their existing contracts, but Fehr points out that those payments would be part of the players' share so it would be players paying back players instead of owners paying them.

"At the end of (Thursday's) meeting, Gary did say that (if) the players were prepared to agree to all of the other parts of their offer (subject, perhaps, to 'tweaks') then I could call him about this issue," Fehr wrote.

-- USA Today

Republished from the Winnipeg Free Press print edition October 21, 2012 B6

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