NHL releases its proposal to save the season

NHL releases its proposal to save the season
October 17, 2012, 11:00 am
Share This Post
(AP Photo/Ann Heisenfelt)

Talk about controlling the message.

 The NHL decided full disclosure was their best policy today and as a result, publicly released the details of the proposal offered to the players Tuesday in an attempt to end the 32-day lockout and save a full 82-game season. 

So take a look and let us know what you think. 

NEW YORK/TORONTO (October 17, 2012) – Following is the full text of
the NHL’s offer for a new Collective Bargaining Agreement in order to
preserve a full, 82-game season that the National Hockey League presented
Tuesday to the NHL Players’ Association (along with the accompanying
commentary and descriptions also provided to the NHLPA). While the original
intention was not to release the details of the offer publicly, not
surprisingly there have been widespread reports attempting to describe and
characterize the terms of the offer that understandably are incomplete. As
a result, we believe that full public disclosure at this stage is both
necessary and appropriate.
 
 
                    NHL PROPOSAL TO SAVE 82-GAME SEASON
 
   1.  Term:
 
          ·  Six-year Agreement with mutual option for a seventh year.
 
   2.  HRR Accounting:
 
          ·  Current HRR Accounting subject to mutual clarification of
             existing interpretations and settlements.
 
   3.  Applicable Players’ Share:
 
          ·  For each of the six (6) years of the CBA (and any additional
             one-year option) the Players’ Share shall be Fifty (50)
             percent of Actual HRR.
 
   4.  Payroll Range:
 
          ·  Payroll Range will be computed using existing methodology. For
             the 2012/13 season, the Payroll Range will be computed
             assuming HRR will remain flat year-over-year (2011/12 to
             2012/13) at $3.303 Billion (assuming Preliminary Benefits of
             $95 Million).
 
          ·  2012/13 Payroll Range……………………
             Lower Limit = $43.9 Million
 
             Midpoint = $51.9 Million
 
             Upper Limit = $59.9 Million
 
          ·  Appropriate “Transition Rules” to allow Clubs to exceed Upper
             Limit for the 2012/13 season only (but in no event will Club’s
             Averaged Club Salary be permitted to exceed the pre-CBA Upper
             Limit of $70.2 Million).
 
   5.  Cap Accounting:
 
          ·  Payroll Lower Limit must be satisfied without performance
             bonuses.
 
          ·  All years of existing SPCs with terms in excess of five (5)
             years will be accounted for and charged against a team’s Cap
             (at full AAV) regardless of whether or where the Player is
             playing. In the event any such contract is traded during its
             term, the related Cap charge will travel with the Player, but
             only for the year(s) in which the Player remains active and is
             being paid under his NHL SPC. If, at some subsequent point in
             time the Player retires or ceases to play and/or receive pay
             under his NHL SPC, the Cap charge will automatically revert
             (at full AAV) to the Club that initially entered into the
             contract for the balance of its term.
 
           ·  Money paid to Players on NHL SPCs (one-ways and two-ways) in
              another professional league will not be counted against the
              Players’ Share, but all dollars paid in excess of $105,000
              will be counted against the NHL Club’s Averaged Club Salary
              for the period during which such Player is being paid under
              his SPC while playing in another professional league.
 
          ·  In the context of Player Trades, participating Clubs will be
             permitted to allocate Cap charges and related salary payment
             obligations between them, subject to specified parameters.
             Specifically, Clubs may agree to retain, for each of the
             remaining years of the Player’s SPC, no more than the lesser
             of: (i) $3 million of a particular SPC’s Cap charge or (ii) 50
             percent of the SPC’s AAV (“Retained Salary Transaction”). In
             any Retained Salary Transaction, salary obligations as between
             Clubs would be allocated on the same percentage basis as Cap
             charges are being allocated. So, for instance, if an assigning
             Club agrees to retain 30% of an SPC’s Cap charge over the
             balance of its term, it will also retain an obligation to
             reimburse the acquiring Club 30% of the Player’s contractual
             compensation in each of the remaining years of the contract. A
             Club may not have more than two (2) contracts as to which Cap
             charges have been allocated between Clubs in a Player Trade,
             and no more than $5 million in allocated Cap charges in the
             aggregate in any one season.
 
   6.  System Changes:
 
          ·  Entry Level System commitment will be limited to two (2) years
             (covering two full seasons) for all Players who sign their
             first SPC between the ages of 18 and 24 (i.e., where the first
             year of the SPC only covers a partial season, SPC must be for
             three (3) years).
 
          ·  Maintenance of existing Salary Arbitration System subject to:
             (i) total mutuality of rights with regard to election as
             between Player and Club, and (ii) eligibility for election
             moved to five years of professional experience (from the
             current four years).
 
          ·  Group 3 UFA eligibility for Players who are 28 or who have
             eight (8) Accrued Seasons (continues to allow for early UFA
             eligibility -- age 26).
 
          ·  Maximum contract length of five (5) years.
 
          ·  Limit on year-to-year salary variability on multi-year SPCs --
             i.e., maximum increase or decrease in total compensation
             (salary and bonuses) year-over-year limited to 5% of the value
             of the first year of the contract. (For example, if a Player
             earns $10 million in total compensation in Year 1 of his SPC,
             his compensation (salary and bonuses) cannot increase or
             decrease by more than $500,000 in any subsequent year of his
             SPC.)
 
          ·  Re-Entry waivers will be eliminated, consistent with the Cap
             Accounting proposal relating to the treatment of Players on
             NHL SPCs playing in another professional league.
 
          ·  NHL Clubs who draft European Players obtain four (4) years of
             exclusive negotiating rights following selection in the Draft.
             If the four-year period expires, Player will be eligible to
             enter the League as a Free Agent and will not be subject to
             re-entering the Draft.
 
   7.  Revenue Sharing:
 
          ·  NHL commits to Revenue Sharing Pool of $200 million for
             2012/13 season (based on assumption of $3.303 Billion in
             actual HRR). Amount will be adjusted upward or downward in
             proportion to Actual HRR results for 2012/13. Revenue Sharing
             Pools in future years will be calculated proportionately.
 
          ·  At least one-half of the total Revenue Sharing Pool (50%) will
             be raised from the Top 10 Revenue Grossing Clubs in a manner
             to be determined by the NHL.
 
          ·  The distribution of the Revenue Sharing Pool will be
             determined on an annual basis by a Revenue Sharing Committee
             on which the NHLPA will have representation and input.
 
          ·  For each of the first two years of the CBA, no Club will
             receive less in total Revenue Sharing than it received in
             2011/12.
 
          ·  Current “Disqualification” criteria in CBA (for Clubs in Top
             Half of League revenues and Clubs in large media markets) will
             be removed.
 
          ·  Existing performance and “reduction” standards and provisions
             relating to “non-performers” (i.e., CBA 49.3(d)(i) and 49.3
             (d)(ii)) will be eliminated and will be adjusted as per the
             NHL’s 7/31 Proposal.
 
 
   8. Supplemental and Commissioner Discipline:
 
          ·  Introduction of additional procedural safeguards, including
             ultimate appeal right to a “neutral” third-party arbitrator
             with a “clearly erroneous” standard of review.
 
   9.  No “Rollback”:
 
          ·  The NHL is not proposing that current SPCs be reduced,
             re-written or rolled back. Instead, the NHL’s proposal retains
             all current Players’ SPCs at their current face value for the
             duration of their terms, subject to the operation of the
             escrow mechanism in the same manner as it worked under the
             expired CBA.
 
   10. Players’ Share “Make Whole” Provision:
 
          ·  The League proposes to make Players “whole” for the absolute
             reduction in Players’ Share dollars (when compared to 2011/12)
             that is attributable to the economic terms of the new CBA (the
             “Share Reduction”). Using an assumed year-over-year growth
             rate of 5% for League-wide revenues, the new CBA could result
             in shortfalls from the current level of Players’ Share dollars
             ($1.883 Billion in 2011/12) of up to $149 million in Year 1
             and up to $62 million in Year 2, for which Players will be
             “made whole.” (By Year 3 of the new CBA, Players’ Share
             dollars should exceed the current level ($1.883 Billion for
             2011/12) and no “make whole” will be required.) Any such
             “shortfalls” in Years 1 and 2 of the new CBA will be computed
             as a percentage reduction off of the Player’s stated
             contractual compensation, and will be repaid to the Player as
             a Deferred Compensation benefit spread over the remaining
             future years of the Player’s SPC (or if he has no remaining
             years, in the year following the expiration of his SPC).
             Player reimbursement for the Share Reduction will be accrued
             and paid for by the League, and will be chargeable against
             Players’ Share amounts in future years as Preliminary
             Benefits. The objective would be to honor all existing SPCs by
             restoring their “value” on the basis of the now existing level
             of Players’ Share dollars.