2012 NHL Lockout - Will there be a 2012 NHL Season?

The NHL Collective Bargaining Agreement (CBA) is about to expire and negotiations have begun. Nobody wants to see a lockout, especially the fans; however, reports are that the NHL has suggested a lockout is on the table. NHL commissioner Gary Bettman has declared that the players and the league are on two entirely different pages; these negotiations will be fraught with difficulties. Bettman has said the league could initiate the lockout on September 15, 2012, when the current collective bargaining agreement expires.

Representing the NHL Players’ Association is Donald Fehr. Before coming to the NHLPA Fehr had a 26 year stretch with the baseball players’ union, engineering a number of work stoppages (most notably the one resulting in the cancellation of the 1994 World Series). Fehr’s unofficial relationship with the NHLPA can be traced back as early as 2010, and given how well he stood his ground for the MLBPA, it is no wonder the NHLPA wanted him.

The two sides seem to be miles apart on the key issue: profit sharing. The current system would place the 2012-2013 salary cap at $70.2 million and the salary floor at $54.2 million (there is a fixed $16 million gap). The cap is set relative to overall hockey revenues at approximately 57% of revenues; then the floor is $16 million below. The owners first proposed that the cap fall to 43% of revenues and thus the cap for this coming season would be $55.3 million and the floor $39.3 million. On the other side, the players’ association has offered a redesigned system that keeps a hard cap but disjoins salaries from overall revenue then forces wealthy teams to give more to poor teams. Under the NHLPA’s plan the 2012 cap would be $69 million and the floor $53 million; then, in the next few years, the cap would rise only marginally.

The league is trying to protect its poor teams from sky-rocketing salaries; the players are trying not to lose out on revenue sharing. The players’ deal is built upon the idea that players will forgo some revenue growth sharing for a few years so that the league can help struggling franchises on stable footing, then the players would return to current revenue sharing levels of 57%.

After breaking off talks, Bettman and Fehr will not return to the table until August 22, 2012. The league has other issues it wants changed. It wants to take out contract limits and salary arbitration; as well as wanting to extend the unrestricted free-agent status until 10 years of service has passed. All this would slow salary grow. But, the numbers only serve to paint the picture. Unless the NHL and the NHLPA can agree on a path to re-stabilizing the entire NHL market a lockout does seem eminent. The league wants to re-stabilize by cutting salaries, thereby cutting costs; the players want rich teams to help the poor teams and not curb salaries to do so.

The owners are not yet able to respond to the players’ first proposal because not all details have been tabled by the NHLPA.

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