Fehr: Players would lose $1.6 billion

Fehr: Players would lose $1.6 billion
October 17, 2012, 6:00 pm
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That thud you just heard was the collective hearts of hockey fans hitting the floor.

In a letter sent to the NHL’s 700-plus membership and player agents on Tuesday night, Don Fehr wonders whether the NHL’s 50-50 proposal is a “serious attempt” to save the season or simply a vehicle toward more salary reductions.

The letter, obtained by TSN reporter Bob McKenzie, is summarized with the following sobering excerpts:
 
+ “Simply put, the owners’ new proposal, while not quite as Draconian as their previous proposals, still represents enormous reductions in player salaries and individual contracting rights. As you will see, at the 5 per cent industry growth rate the owners predict, the salary reduction over six years exceeds $1.6 billion. What do the owners offer in return?"
 
+ "The proposal does represent movement from their last negotiating position, but still represents very large, immediate and continuing concessions by players to owners, in salary and benefits (the Players' Share) and in individual player contracting rules."
 
+ "They want to "clarify" HRR definition and rules. It is not immediately clear what this means, but so far all of their ideas in this regard have had the effect of reducing HRR, and thereby lowering salaries."
 
+ "The Players' Share is reduced to 50 per cent from 57 per cent immediately -- this season. This is a reduction in the share of 12.3 per cent. On last year's revenue numbers, this would mean that players' salaries would be cut by about $231 million."
 
+ "The proposal includes a "Make Whole" provision, to compensate players for the anticipated reduction in absolute dollars from last year (2011-12), to this year and next year. However, it would work like this. The Players Share in subsequent years would be reduced so that this "Make Whole" payment would be made. It is players paying players, not owners paying players. That is, players are "made whole" for reduced salaries in one year by reducing their salaries in later years."
 
+ "Finally, they also proposed that the players could appeal supplemental or commissioner discipline to a neutral arbitration, on a "clearly erroneous" standard, which, as a practical manner, makes it very unlikely that any decision would be overturned."
 
+ "We do not yet know whether this proposal is a serious attempt to negotiate an agreement, or just another step down the road. The next several days will be, in large part, an effort to discover the answer to that question."
 
+ "Bear in mind the approach that the Players have taken to these negotiations. It is:
 
Given the enormous concessions players made in the last round, plus 7 years of record revenue reaching $3.3 billion last season, there is no reason for a reduction in the amount the players receive.
 
Players are willing to take reduced share going forward so that the NHL can grow out of whatever problems some franchises face.
 
The player contracting rights secured in the last negotiations should be, at minimum, maintained.
 
Revenue sharing needs to be enhanced and structured so as to encourage revenue growth by the receiving teams.
 
The overall agreement has to be fair and equitable for both parties. Bargaining is both give and take."