Welcome to day 83 of the National Hockey League lockout. National Hockey League players have lost an estimated $531,052,068.42 in wages thus far; money NHL owners had agreed to pay in contractual agreements. Thursday night in a half hour of sports labor theater of the absurd, NHL Players Association executive director Don Fehr held two press conferences in a ten minute period, followed by a tour de force from NHL commissioner Gary Bettman. When the 30 minutes of fury ended, NHL labor talks had collapsed, the 2012-13 NHL season was on the brink of being canceled. Rest assured hockey fans, ignore the hyperbole, the rhetoric there will be an NHL season, it will likely start in January.
Fehr’s first conference suggested the two sides had all but reached an agreement. Minutes after Fehr’s first conference ended, Fehr stepped back up to the podium at New York’s Westin Hotel and made the following announcement:
"There has been a development. It's not a positive one," he said. "We have been advised in a voice mail message that the moves the players made were not acceptable. There was no reason to stay around tonight or tomorrow, that they would be in touch. And that something -- everything is off the table.
"We don't know what that means."
Earlier Thursday the NHLPA had countered the offer the NHL had presented the players Wednesday. The owners offer met most the financial conditions the NHLPA were looking for, as long as the NHLPA agreed to a 10-year collective bargaining agreement (with either side allowed to opt out after eight years) and a maximum of five years on player contracts, unless a player is resigning with their current team in which case the contact could be as long as seven years. The NHLPA wasn’t interested in either clause, leading to the breakdown in talks.
Gary Bettman visibly shaken met with the media in New York, speaking 15 minutes after Fehr had finished, trying to set the record straight on Fehr’s earlier assertion the two sides were close to an agreement.
"I find it almost incomprehensible he did that," the visibly angry Bettman said of Fehr's positive spin. "I am disappointed beyond belief that we are where we are. I need to take a deep breath and try to regroup."
Wednesday the NHL added $100 million to “make-good” provision in the proposed CBA. The NHL had offered $211 million before Wednesday’s $100 million increase. Current NHL contracts were negotiated based on the CBA that expired on September 15, 2012, that included the players receding 57% of hockey related revenues (HRR). The new CBA calls for a 50/50 split in HRR, the proposed $311 million factors current players receiving most of what their current contracts call for. Without a significant financial commitment from NHL owners current NHL players are looking at a significant loss in their current contracts.
"The take or give or bottom line on all this is it appears that the union is suggesting because we made substantial movements in certain areas that we're close to a deal," Bettman said. "Those moves were contingent on the union specifically agreeing on other things, which while the union may have moved toward, didn't agree to."
The NHL wants a ten-year CBA, with either side allowed to opt-out after right years. The NHL needs a ten-year CBA, to build the NHL’s brand, business and to help foster confidence with broadcast and corporate partners. The NFL reached a ten-year CBA with their player association in August 2011. One of the points NFL commissioner Roger Goodell made when he announced the ten-year CBA was the stability a ten-year CBA allowed the NFL in marketing and selling their brand. The current NBA CBA negotiated after a protracted lockout last December is a ten-year CBA with a six year opt-out for either side. The current NHL lockout is the second lengthy lockout in eight years, the NHL needs as much labor stability if the league is going to recover from the damage the current lockout has inflicted on the NHL’s brand and image in the corporate sector.
The issue of player contract length is nonsensical. The NHL is insisting players signing with new teams sign contracts that are no longer than five years in length, seven years for players resigning with their current teams. Of the more than 700 current NHL contracts, only 12% are five years or longer, in other words the NHLPA is contesting a clause that impacts 12% of their membership, 88% of the NHLPA has contracts that are four years or less in length.
"What we got today, quite frankly and disappointingly, missed the mark," NHL deputy commissioner Bill Daly said. "For the union to suggest somehow we are close, is cherry picking and it's unfortunate."
The two sides moved closer to an agreement after Gary Bettman and Don Fehr stepped away from the talks. Six current NHL owners including Ron Burkle, Mark Chipman, Larry Tanenbaum and Jeff Vinik and 18 current NHL players participated in talks Tuesday, Wednesday before talks broke down Thursday.
Penguins’ owner Burkle reportedly a key in the talks offered the following statement late Thursday: “We wanted to move quickly and decisively. We have all spent too much time without any real progress at the expense of our fans, our sponsor and the communities we serve. It was time to make bold moves and get a deal. Many people think we got over our skis and they are probably right, but we wanted to do everything we could to get back to hockey now. We didn’t hold back.
“We made substantial movement on our end quickly, but unfortunately that was not met with the same level of movement from the other side. The players asked us to be patient and keep working with them. It’s not what they do and they wanted us to know they were committed. We understood and appreciated their situation. We came back with an aggressive commitment to pensions which we felt was well received. We needed a respory nse on key items that were important to us, but we were optimistic that we were down to very few issues. I believe a deal was within reach.
“We were therefore surprised when the Fehrs made a unilateral and “non-negotiable” decision – which is their right, to end the player/owner process that has moved us farther in two days than we moved at any time in the past months.”
The NHL lost the entire 2004-05 season to a lockout. The 1994-95 lockout was settled on January 11, 1995, a 48 game schedule began on January 20, 1995. A complete Stanley Cup playoff began on May 3, 1995 and ended on June 24, 1995 with the New Jersey Devils winning the Stanley Cup.
Gary Bettman made it clear Thursday evening there are no plans to cancel the 2012-13 NHL season, the league was ready to contest a 48 game schedule if need be. The two sides are far too close to an agreement for there not to be an NHL season. The National Hockey League’s brand and business has suffered considerable damage as a result of the 2012-13 NHL lockout. The NHL quickly rebounded after the entire 2004-05 season was lost to a lockout, NHL revenues grew from $2.1 to $3.2 billion in the last eight years. If the entire 2012-13 NHL season is canceled because of a labor dispute the NHL might never recover as a brand or as a business. Facing catastrophic consequences the two sides will reach an agreement; they have no other choice but face the unthinkable if they fail.
For Sports Business News this is Howard Bloom