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Back to the table

Friday, August 31, 2007

The NHL and NHLPA dropped the puck on another round of meetings Tuesday in New York, discussing league and team revenues for a little more than four hours. This latest round of talks, which includes two days of small group discussions,  is expected to conclude on Thursday with a full bargaining session.

Tuesday and Wednesday were set aside for small group discussions that would pick up where the two sides left off last week.

During last week's sessions the league and the PA discussed accounting and other financial issues, including the Levitt Report.

Accountants who worked on the report which detailed the league's finances were on hand to explain to the NHLPA how they arrived at their numbers, which the PA has disputed. There was also discussion on how team payrolls would be calculated.

Those issues, especially how revenues are defined, are key now that the two sides have basically agreed on a concept for how a new CBA would be structured.

The new system would entail a floating team-by-team salary cap that would be linked to overall league revenues. There would be set minimum and maximum team payrolls. Reaching an agreement on how to define revenues would be a key step in moving the process forward.

There is also the issue where league revenues will be in 2005-06. That figure could be key because it could help determine exactly where the maximum and mininum payroll levels begin in the new system.

In 2003-04, the last time the league played, revenues were estimated to be at $2.083 billion. Now, because of the lost season, the revenue estimate has dropped to somewhere between $1.7 billion and $1.9 billion. It will drop even further the longer there is no settlement.

The Toronto Globe and Mail reported this week that many NHL advertisers may move their dollars elsewhere if there is no settlement by next month.

There's also the issue of ESPN, which has until June 1 to decide what it plans to do about NHL coverage. ESPN2 has a $70 million option on NHL coverage for 2005-06, but it is expected, if the network chooses to exercise that option, it will want to pay a lot less for NHL rights. There has even been speculation that ESPN2 may want a deal similar to the one the league has with NBC, where the network pays no upfront money but shares revenues with the NHL once its costs are covered.