Tuesday, August 21, 2012

An Interim Solution?

It is unclear just how much dialogue might take place between the NHL and NHLPA prior to September 15th, now that both sides have planted their flags with their initial proposals. I'm sure both Fehr and Bettman would like to use their plan as the basis for further negotiation; we'll see how that goes. Maybe we'll see some sort of hybrid if a deal gets done by October? Something along the lines of no rollback, no change to HRR definition, 54% of revenue to the players in year one with that cap number fixed afterwards until such time as 51% of HRR would result in a higher cap number?

I'm not really expecting to see a deal prior to September 15th, but I have been wondering if there might be a way to play out the 2012/13 season while negotiations continue. The two sides are really only arguing about the money sandwiched between the owners proposal of ~43% (with current HRR definition) and the 57% the players are willing to play for. So, why not lock that 14% of revenue into an escrow account, to be distributed once a deal is made? Keep negotiating throughout the season and actually play the games. In this theoretical agreement**, the teams would continue to pay all the salary currently due to their players, but only ~75% of it would actually go the players - the remainder going into the newly created escrow account, to be dealt with upon the creation of a new CBA.

The NHL may argue that their interest in systemic changes* means they wouldn't want to operate on an interim basis without a CBA. In that respect, this may be something that could only be done for the upcoming season, and not beyond; the NHL and NHLPA could agree that after September 15th, no contracts will be signed for any season beyond 2012/13, and that the 2013 draft wouldn't occur until a new CBA is agreed upon. The contracts for this upcoming season are nearly all signed already, any systemic changes to arbitration, UFA age, contract length, would have virtually no impact on playing games this season.

If either side were going to propose something like this, it would more than likely be the NHLPA doing so. There wouldn't be much downside for them (if there is, please feel free to voice it in the comments), and the worst that could happen is the NHL might say "no". If they do, it provides the NHLPA a chance to craft a statement saying something like (more eloquently phrased than this, I'm sure, but as a quick example):
While we are, by no means, willing to sign a CBA where the players would be compensated as the NHL indicated in their July proposal, we are willing to play temporarily for that amount at this time, to allow fans a chance to view a full schedule of games in the 2012/13 season. We can't force the NHL to sign this interim agreement and play NHL games this season, but what does it say if they won't even play on an interim basis while paying us the lowball rate of their first offer?***

The NHL may be hesitant to give up some of a perceived bargaining strength by playing games, and paying the players while negotiating. At the same time, from what I've read, the 30 teams combined are making money, so on a net basis they may prefer to play while negotiating (especially if they predict they'll be getting a healthy chunk of that escrow money back when a deal is struck) provided playing doesn't significantly affect their leverage and/or their opportunity to make systemic changes.

If a deal isn't struck by the end of the season, the money continues to sit in escrow and both players and owners will have an incentive to consummate a deal (to get at the money tied up in escrow) for the 2013/14 season, both having had the chance to make some money this year while maintaining whatever marginal fan interest they might be concerned about losing with a lockout. The NHL may have decided they won't lose anyone due to a lockout, in which case this could be moot. That said, it's not impossible that some owners decide that the lack of lost interest from fans last time doesn't mean they can be 100% certain they won't this time, and decide to take a temporary deal.

I don't think this is something that would necessarily come up before the two sides negotiate a little bit over the next two, two and a half weeks; if they are close to a deal now neither side may want to get sidetracked by an interim agreement. But, I'm curious if this might be a way for the two sides to both make a bit of money while continuing to negotiate a new agreement, keeping the fans happy?

* Hard to know how much they are actually interested in making changes to arbitration, free agency, contract length, ELC's, etc, but assume these are serious concerns for the NHL.

** This may be something to discuss in the comments, but I'm just throwing ideas out here, this could be all be up for negotiation in terms of exactly how this would work.

*** I'd imagine the NHL might counter by mentioning that they wouldn't really be paying 43% of revenues, they would argue they are still paying 57% even though only 43% would be going to the owners. I guess we could go back and forth with arguments and counter-arguments for awhile (the players might note that escrow isn't so fun, is it? Both would be "partnered" in escrow, an interesting twist.)

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