NHL Owners vs. the NHLPA: Who wants what and why?
Owners say their clubs have lost a total of $1.15 billion since the inception of the current CBA, and claim to have lost $300 million in 2002. Owners do not receive enough revenue from television contracts, so they receive the bulk of their income from ticket sales. They want a hard salary cap of $30-$40 million, roughly half the payroll of the New York Rangers and Detroit Red Wings. According to the NHL, the revenue figures for last season were $1.96 billion. Player salaries totaled $1.41 billion, or 74%. Some owners want a figure closer to 60-40 in terms of owner revenue-player income.
There are also problems with the current entry level contracts, not so much for salaries but for bonuses. The current deal allows for nothing longer than three years and a capped salary. Yet, bonuses are still acceptable. Agents now have taken to structuring deals laden with incentive clauses, many of which are easy to obtain. This was not the case once, until the selection of Joe Thornton as the first overall pick of the 1997 NHL draft.
Up until the CBA of 1995, players had settled for the mandated maximum salary and signing bonus. Performance bonuses were almost non-existent. Joe Thornton’s entry level contract with the Boston Bruins in 1997 was a complex three-year deal, with eight pages of bonuses, conditions and examples. His salary figure for that season was roughly $460,000. If Thornton were to score 20 or more goals, he would receive an extra $300,000. Scoring 60 points or more would net him another $300,000. Half of Thornton’s unearned bonuses for that year would roll over and be added to the figure for the next season (Instead of making $300,000 for 20 goals in 1998-99, he would make $450,000). In the third year of his deal, Thornton collected five of six available bonuses and made an extra $2.4 million on top of his $925,000 salary.
The main argument
of the owners is that a salary cap is the only way to halt the skyrocketing
player salaries that will eventually become too much for even the richest
and most popular clubs to afford. A cap, in their view, would bring
parity to the league and allow some of the most financially downtrodden
clubs to compete with the upper echelon. Stable costs would allow the
teams to keep ticket prices at their current rate or lower without any
Executive Director of the NHL Players Association Bob Goodenow offers a harsh retort to the owners' sentiment of a salary cap. “We will never negotiate a salary cap. Never. We’ve said it before. We’ve seen what a cap did to the NFL and the NBA. It won’t happen to hockey.”
The NHLPA also
wants the age for unrestricted free agency to be lowered to 29 (it
is now 31). The union argues the NHL is underreporting revenue, especially
in regard to luxury suite receipts. Still, the biggest problem is
the proposed salary cap. It does not take a rocket scientist to figure
out why this is would prove a disaster for the NHLPA. Right now the
salaries for the upper echelon of players average near $6-8 million
dollars, with some lucky players pocketing over $10 million per season.
Who in their right mind would want to give that up? A salary cap of
$40 million would allow for possibly no more than two marquee players
per club if current contracts stayed intact. The players argue that
if teams are willing to pay, then that is how it should stay.
“It’s unfair to speculate right now. I don’t know what course things may take. Obviously the ownership side has some concerns and I think the players would like to look at those and try to solve them. If it becomes a my way or the highway type of thing, it could get dragged out."
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