NHL Lockout:
Back to square one?

Sunday, April 24, 2005

After the disastrous talks in New York on February 19, the general assumption was that it is back to square one in the negotiations as the NHL and NHLPA head into Friday's talks at an undisclosed location.

In reality it appears neither side really knows and probably won't find out until they meet face-to-face Friday to see where everything stands.

The word is that the NHL, which initiated the meeting, does not plan to make any proposals. That's fine with the NHLPA.

"When we're just coming off the cancellation of the season, it would not be appropriate to just get in and start firing proposals," NHLPA senior director Ted Saskin told the Associated Press. "Certainly a lot has been learned over the last few years and I think people understand the hot buttons, they understand the issues that might lead to progress and might not."

The NHL's Bill Daly wasn't willing to discuss an agenda, but said it would be dictated by where the PA stands.

"I'm not prepared to give you an agenda, but a lot of it will be determined once we get in the room," Daly said. "I think there's a lot of uncertainty as to what the position of the union will be and whether they have an interest in doing a deal."

Of course, the PA says its position will be dictated on the league's position.

"Depending on the approach taken, that will impact how it moves forward," Saskin told the AP.

When talks broke off in February both sides indicated their last offers were off the table. What had been on the table had the two sides at least talking the same language and gave a glimmer of hope that the two sides could be somewhere in the vicinity of striking a deal. 

The league's big move had been to get off linkage, which sets overall player costs as a set percentage of defined hockey revenues.

Once linkage was removed, the players finally accepted the concept of a team-by-team salary cap with some built in exceptions.

When talks broke off on February 19, the league's cap offer was $42.5 million and the players were offering $49 million with the exceptions.

On the surface, the difference between the two sides was $6.5 million. But the talks didn't necessarily break off over the cap. They broke off some of the other systemic issues such as arbitration, qualifying offers and the entry level system. With linkage off the table, the league took a harder stance on those issues. The players objected and that's when the talks ended.

There was also the players' objection to the cap being at a fixed level over the length of the CBA, instead of rising as revenues grew.

So where does it go from here? Daly indicated in an interview with TSN that it may be possible to build on the progress that had been made before the breakdown in negotiations.

"I think the importance of meeting quickly after the season cancellation in an effort to get a deal done as soon as possible is maybe we can take some germs of where there was agreement before the season cancellation and build on those, but time will tell," said Daly.

TSN analyst Bob McKenzie is one person who thinks the framework exists for a deal to be made if the two sides pick up where they left off before the the meltdown in talks.

"I don't want to oversimplify this, but if Bob Goodenow and Gary Bettman go into this meeting on Friday and pick up on where things were back on February 19 and start working off the $42.5 million number, the $45 million compromise that people thought was out there, start tweaking the systems -- entry level, qualifying offers, arbitration -- there is a deal there to be done. It could be done in a week or two," McKenzie said on the network earlier this week.

The question is if the league will still be willing to go anywhere near $42.5 million now with the season being lost. There were some indications that several owners felt that figure was too high.

Former Canucks GM Brian Burke, also speaking on TSN, said he thinks the league will have a different set of numbers in mind.

"$42 million or $45 million? Those number are not going to be discussed. That horse is out of the barn. That window of opportunity for the NHLPA is closed," said Burke. "There is only one number that you are going to hear about in this meeting and, in my humble opinion, and that is 55. Fifty-five percent of defined revenues, which is what is going to be allocated to player payrolls and that's the only number I predict the owners are going to discuss."

Some owners have made it clear that they expect linkage to be back on the table.

"We are back to linkage. We don't know what our revenues are going to be from here on out, so any new agreement I'd want to approve would have a component of linkage," Nashville owner Craig Leipold told the Nashville Tennessean last week. ''The first couple of years when the revenue is lower, the salaries would have to be lower. And then as we rebuild it back up to where we are today, then the salaries would go up."

McKenzie believes that if the league does try to put linkage back on the table or if the PA thumbs its nose at a cap again, it will spell disaster.

"If Brian Burke is right and linkage is back on the table or if Bob Goodenow comes in and says 'that salary cap that salary cap we were prepared to live with, there's no chance we are going to live with that now,' then we are not back at square one, we are back at ground zero," said McKenzie. "If we think the last year has been messy, it's going to get even worse if it is a discussion of linkage on this Friday."

And both sides have thought about the worst. Bettman has presented the owners six options of how things could play out next season, including the obvious one of reaching an agreement. The other five are:

• The lockout continues
• 82-game schedule using exclusively replacement players
• 60-game schedule using exclusively replacement players
• Declaring impasse and playing 82-game schedule using replacement players and whatever NHLPA members cross
• Declaring impasse and playing 60-game schedule using replacement players and whatever NHLPA members cross

The players of course have the options of Europe or the new WHA, if it gets off the ground. During last week's meeting with agents, Goodenow also reportedly  formed the North American Opportunities Committee.

According to Street & Smith's Sports Business Journal, the committee' goal is to explore starting a players league or tour or possibly holding exhibition games in North America.