Hey, NHL & NHLPA: Here's how to follow mediator to middle ground and make a deal
Good day, gentlemen. I am your mediator.
First things first. If you accepted this invitation only hoping I'll take your side, this won't work. You can leave at any time. This isn't binding, and we all know it. All I can do is facilitate discussions, try to identify your true priorities and make suggestions. But my first suggestion is this: Don’t leave. Don't let pessimism become a self-fulfilling prophecy. Don't keep a closed mind and waste an opportunity. Because if you walk out of here without at least finding some sort of compromise, without making some sort of progress, you won't be right back where you started. You'll be in even worse shape.
You could drift farther apart, when you're close enough to come together and end this lockout. You could increase your risks – via decertification of the union, cancellation of the season, further alienation of your customers – when you could start rebuilding what you've damaged already.
I am not here to rehash history, though I will keep it in mind and keep this in context. I am not here to suggest what should have been done in the first place, because, frankly, it's too late for that. I am here to analyze where we are today, right now, this minute, and try to get this done.
This is not about the ideal. This is about making a deal.
Yes, this is oversimplified and doesn't examine every detail. It doesn't even get into revenue sharing, with the NHL at $200 million and the NHLPA at $260 million. But let's look at the main sticking points:
– Money: You have agreed to split hockey-related revenue 50-50. The dispute is now over how to handle current contracts, because the players used to receive 57 percent of HRR, the owners 43 percent.
Players, you say you just want your contracts honored. Well, you signed them in an escrow system, knowing you weren't guaranteed every dollar. Especially if you signed them this summer, you signed them knowing the owners were going to try to cut your percentage of HRR – and knowing they were willing to lock you out to do it. That's why some of you negotiated guaranteed signing bonuses.
Owners, that doesn't let you off the hook. When you sign a contract, there is a legal obligation and a moral obligation. You have the legal right to do what you're doing, but it's just not right to sign someone to a contract under certain conditions to secure his services with the intention of changing those conditions drastically. Fifty-seven percent to 50 percent is quite a drop, and that creates quite a pay cut via escrow.
You have recognized that with your so-called "make-whole" proposal. You're at $211 million, and you want that number to go down, not up, because you proposed it to save a full 82-game season, or close to it. Players, you're at $393 million, touting a difference of only $182 million – or $1.2 million per team per year of a five-year agreement. I took that as an invitation to negotiate, setting about $300 million as the middle ground, but the owners did not counter.
So how about $275 million?
Owners, it's higher than you want. But would you rather pay that and play hockey, or would you rather cancel another season, drive away fans and sponsors, and pay hefty legal bills and risk triple damages, if the union decertifies and players file antitrust suits?
Players, it's less than you want. But would you rather take that and play hockey, or would you rather cancel another season, drive away fans and sponsors, and risk losing your court battles if you decertify? We're looking at two-thirds of a schedule this season, at best. I know you blame the owners for that. But maybe you can live with $275 million in "transition payments" if you consider it a prorated amount.
I know you want some protection on the downside, too, because you have made enormous concessions with little in return. But you can't expect your share never to go backward in terms of dollars, when any drop in HRR for any reason – a bad year, a good year following a great year, some unforeseen circumstance – could put your percentage above 50 again. Either we're 50-50 going forward, after the blow to current contracts is cushioned, or we're not.
– Rights: OK, owners. You have your cost certainty where you wanted it. After accounting for make-whole/transition payments, the players will never make more than 50 percent of HRR. No matter what tricks the general managers and agents pull, you are protected from spending too much Players, you are taking a smaller slice of the pie. If you don't want to mess with how your slice is sliced among you, fine.
Let's leave entry-level contracts, arbitration rights and free agency eligibility alone. Let's forget term limits on contracts. Let's adopt the NHLPA's ideas addressing cap circumvention – counting above $1 million against the cap if a player is sent to the minors, using a formula to recapture the cap advantage if a player retires before he finishes a long-term contract. (Let's make that apply only to future contracts; this is a CBA, not a time machine. It's unfair to penalize teams that worked within old rules.)
Owners, I know you want to crack down on second contracts. I know you want to allocate your cap dollars differently. I know you want to close loopholes you left open in the last agreement. But this is the least you can do. The players are reasonable when they say their individual rights matter more when their total share is less. The less pie, the harder the fight.
You can argue a player should earn his dollars and not be paid for potential, that he should negotiate a big deal at, say, age 28 instead of 23. I understand. But the more years, the more risk to the player – of injury, of declining performance. A player wants more options for more of his career.
You can argue salaries should not vary more than a certain percentage each year, that they should not go on too long. I understand. But that takes away flexibility from both players and teams – which isn't necessarily good for either – and that limits options, and that limits the market.
Individual players have to cash in when they can, where they can. They want as much personal choice as possible. If they can't make more than 50 percent of HRR as a group, are these issues worth sacrificing 100 percent of HRR?
– Term: Players, you want a five-year collective bargaining agreement. Owners, you want a longer-term deal – six or seven years, officially, but even as much as 10. Players, you say you want to stop this perpetual cycle of lockouts. Owners, you say you want stability.
Players, you say five years is a long time, because players turn over and it's hard to predict the future. You don't buy the stability argument. You think the owners only want stability because this agreement is so advantageous to them and they want to keep these terms as long as possible.
Well, if it's hard to predict the future, why blame the owners for their failure to predict the future when they devised the last agreement? Why not take advantage of the same dynamic?
Players, you were supposedly crushed after the 2004-05 lockout when you accepted a salary cap and a 24-percent rollback, getting some looser contract rights in exchange. Then the league emerged from the gloom, recorded seven straight years of record revenues and salaries rose. You extended the agreement. You wanted to keep playing under it during these negotiations, right?
So let's do a five-year deal with two one-year player options – or better yet, a 10-year deal with player opt-outs at five years and seven years. Owners, if 50-50 is the answer, that should be fine for you. Players, you keep asking what you're getting in return for your concessions. In this scenario, you get some control.
If the deal turns out bad – or just isn't good enough – from the players' perspective, you can end it. You pick the next fight. If the deal actually turns out well for you, as the last one did, you can keep the owners from coming back for more again. You can prevent the next lockout.