NHL: we did not leave the hostel!

The new collective agreement between the NHL and the Players’ Association was sealed in June with the promise that the 2020 playoffs would be contested and that the employment contract would be valid until the 2025-2026 season.

The collective agreement also clearly states that it could be extended for one season if the players owe owners $ 125 million to $ 225 million in debt during the term of the agreement.

I remind you that the owners and the players share the hockey revenues equally (50/50).

Historical

Initially, the NHL wanted to start the 2020-2021 season on December 1, but it quickly changed its mind when we did not even know if we would find a vaccine to fight COVID-19 this fall.

The NBA decided to take the lead and said its season will start on December 22. Obviously, the NHL could not stand idly by, which is why the date of January 1 has arrived. Officially, we can now say that the League’s wish is to have a 60-game season, but the leaders are also asking for other financial concessions from the players, beyond what was negotiated in June.

The players had agreed to defer 10% of their salary for the 2020-2021 season (paid three years later) and to give back 20% of their salary (via the escrow) to the owners. The money placed in trust (escrow) was also fixed throughout the duration of the employment contract; 14 to 18% for the 2021-2022 season, 10% for the 2022-2023 season and 6% annually for the last three seasons of the agreement.

To achieve this, the salary cap must remain stable at $ 81.5 million annually, as long as the NHL does not reach $ 4.8 billion in annual revenue.

The problem

The players and owners signed the last collective agreement five months ago, knowing full well that there was likely to be no or few spectators in the stands during the 2020-2021 season. Now that this is confirmed, some owners are wondering how they are going to be able to limit losses with little inflow of money. The revenues from television rights represent a maximum of 40% of the revenues of the NHL, which is insufficient.

That’s why the NHL has asked players for other concessions. First, that they postpone another 13 to 16% of the salaries they were supposed to receive next season, and that they also increase the part of their salary that they must place in trust (escrow) during the last three seasons of the agreement. I remind you that the percentage was set at 6% annually for the last three seasons.

The answer

On the last point, from what I have learned, is that the discussions should be very short if the NHL insists on a change in the percentage of wages that players must place in trust during last three seasons of the agreement. It will not be possible, I am told.

On the other hand, players may agree to defer part of their salary to next season, but not as much as owners demand. If the latter insist that it be between 13 and 16%, it is quite possible that it will be rejected entirely, unless the owners agree to make other concessions elsewhere. So there is a certain openness.

The philosophy

Currently, the philosophy of the members of the NHLPA is as follows. If the players had a problem with an important point in the collective agreement signed in June and they asked the owners for a change before the start of the next season, the answer would be no.

Other point. When the 2013 collective agreement was signed (they saw their share of the pie drop from 57% of revenue to 50%), no one predicted that the Canadian dollar would lose at least 20% of its value against the US dollar. and that the players were going to have to give back 13% of their salary annually to the owners. The players did not demand to reopen the collective agreement, despite the fact that they did not like the agreement at all.

The owners, for their part, had not foreseen that the pandemic would still be at the heart of the problems today.

In short, we did not leave the hostel and patience is required, even if an agreement will have to be reached soon for the season to begin in January.

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