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Dear Gary, Yesterday afternoon, Bill Daly presented us with an offer
from the League that, for the first time, was not linked to League-wide
revenues. We appreciated your willingness to adjust your position
and we worked to respond in kind. By evening, we had fashioned and
reached out to you with an offer from the PA that included, for the
first time, a team maximum cap. This offer built upon the 24%
rollback and other changes in favour of clubs, which were presented by
the Players on December 9, 2004.
As you know, and as Ted told Bill, our offer of a team cap
represented a radical step for the PA. We took this step because
we too believe that our sport will be damaged greatly by the
cancellation of this season and the continuation of the lockout through
next season.
We wish that the NHL had offered a no linkage proposal before
yesterday so that negotiations in that arena could have commenced
sooner. However, we recognize that they did not and we agree that
time is short.
In that spirit, and in a final attempt to reach an agreement, we are
adjusting our offer of yesterday in two respects. First, we are
reducing the maximum individual team cap to $49 million in salary, which
does not include the $2.2 million per team in benefits due.
Second, we will adjust our exception provision so that it is
available to teams only twice during the six year term and for up to
only 10% over the limit of $49 million (to $53.9 million), at the tax
rate of
150%. The exception provision is important so that a successful team
does not have to arbitrarily dismantle its roster after it has achieved
particular success or is in a unique phase of its player roster cycle.
I have attached a short summary of the main deal points discussed by
Bill and Ted yesterday, as modified above.
I can be reached at the usual phone numbers.
Regards,
Robert W. Goodenow
Executive Director & General Counsel
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NEW CBA DEAL POINTS
1. Term - 6 full seasons (through 9-15-11).
2. CBA System Incorporation of NHLPA December 9, 2004 proposal into the
recently expired CBA, with indexing of financial provisions (per diems,
etc.) at 2% per year, with the following additional changes requested by
the NHL yesterday:
(a) Increased salary arbitration rights for Clubs -- to be agreed upon.
Salary arbitration available after Player leaves Entry Level System.
(b) Cap on Exhibit 5 Individual B Performance Bonuses -- to be agreed
upon.
(c) Replace NHLPA Revenue Sharing Plan with NHL Revenue Sharing Plan to
share at least $88M in each year of the Agreement. Clubs may credit any
payroll taxes paid against their revenue sharing contribution.
3. Team Payroll Limit - $49M in salary and bonuses
4. Minimum Team Payroll - $25M (each team can fall no more than 10%
below only twice during term).
5. Minimum Player Salary - $300K (as per NHL Proposal)
6. Payroll Taxes - $40M - $43M (25%)
$43M - $46M (50%)
$46M - $49M (75%)
$49M - $53.9M (150%) only twice per team during 6 year term
7. Indexing of Tax Rates and Payroll Minimums & Maximums All dollar
amounts would be in place for 2004-05 (pro-rated) and 2005-06. Dollar
levels for tax rates, payroll minimums & maximums for subsequent years
either constant or increased by % change in greater of either hockey
related revenues or only the gate receipts and broadcasting segments of
hockey related revenues from the 2005-06 base year.
8. 2005 Playoffs 55% of playoff revenues to be paid to Players for the
2005 playoffs.
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