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NHL’s CBA proposal would rewrite rules on contracts for young stars
The NHL's first proposal in collective bargaining with the NHLPA was leaked on Friday night through player-sympathetic media and the reaction has been apoplectic despite it being an overly harsh opening to, all together now, a negotiation.
While an 11-percent decline in players' revenue share has about as good a chance of being in the next CBA as the Golden Seals have of winning the next Stanley Cup, the NHL's salvo reveals broad sketches of what it wants to gain in the new agreement: Like a redefinition and redistribution of hockey-related revenue; and new restrictions on salary escalation.
The proposal offers a salary rollback through its lessening of the players' revenue share, which Donald Fehr has already said it a no-go. It seeks to eliminate salary arbitration, which is a plank from the 2005 CBA stalemate. It seeks to cap contracts at five years, and make every year of those contracts a flat rate — i.e. the "true cap hit" contracts that some have clamored for rather than having rampant circumvention.
But most of all, it seeks to delay unrestricted free agency and the "buying out" of UFA years. And it all begins with the redefinition of the rookie contract.
If you're drafted by an NHL team, your goal is to play in the NHL as quickly as possible. Hence, the team that owns your rights has a considerable amount of leverage — there are salary restrictions on the offer they can make, and on the term they can provide. With few exceptions, rookies sign whatever they're given and the strike it rich in three seasons.
The new CBA, according to the NHL's first proposal, would extend that period to five seasons. If an 18-year-old is drafted, his next contract comes around at 23; the 5-year term limit proposed by the NHL for all contracts would take him to 28 years old before he goes unrestricted, should him and the team max both terms.
Two 5-year terms, fitting tidily into a 10-year span of RFA status. In theory, a team could do this and avoid ever having to buy up UFA years if it chose to.
The target here for the owners and the League are the "second contracts" for young star players, when rookie salaries are transformed into massive contracts in treasure and term. From Pierre LeBrun of ESPN last October, on a prophetic column on the CBA talks:
"Second contracts [have] become a big issue among GMs. The trend over this current CBA has seen young players jump from entry-level, three-year deals to monster, lucrative second contracts. GMs with whom we've spoken say the genesis of the issue has liberalized unrestricted free agency. Under the terms of this CBA, players can be UFA at 27 years old, or even younger if they've had seven years of service. For example, Jeff Skinner would qualify for UFA status at the age of 25 because he was an 18-year-old NHL rookie.
"What's transpired over the course of this CBA is that the cost of buying potential UFA seasons from the players when negotiating long-term deals out of their entry-level contracts has skyrocketed because those UFA years are clearly valuable. Hence, Drew Doughty goes from entry level to $7 million a year. Voila.
"The answer, some GMs will tell you, is to bring the UFA age back to 29 or 30 years old. This would make the second contract less expensive to settle if UFA years aren't involved. If you're the players, this is a total no-go. Why the heck would they give up the ground they gained last time around in liberalizing free agency? It helped drive up salaries. This would be a huge giveback."
Under the NHL's new proposal, UFA status would come after 10 seasons in the NHL, rather than at 27 or after seven seasons.
Does that mean a 20-year-old rookie doesn't go UFA until 30? Potentially, yes.
The owners can frame this as altruistic: After all, keeping player salaries in check under the cap and retaining talent for as long as possible makes for a stronger, sustainable contender. Build and grow your core; augment with UFA players and veteran trades.
The players can frame this as an outrageous attempt at restricting player salaries, but probably won't find much sympathy if they do.
Rather, the NHL's proposal of term limits and extending restricted free agency would seem at odds — one is intended to flood a dead UFA market with talent rather than having 20-some-odd star players locked into 9-plus years deals, as they will be next summer; the other pushes that availability, in some cases, into their 30s.
The players could also argue that the elimination of the "lifetime" second contract — think Jonathan Quick, for example — could be a detriment to a franchise's stability. Once more, with feeling: Shouldn't a team that drafts, develops, markets and promotes their talent have a divine right to retain that talent for as long as it desires, if the player agrees?
Based on the first proposal, it looks like free agency will be at issue between the NHL and the NHLPA.
While an 11-percent decline in players' revenue share has about as good a chance of being in the next CBA as the Golden Seals have of winning the next Stanley Cup, the NHL's salvo reveals broad sketches of what it wants to gain in the new agreement: Like a redefinition and redistribution of hockey-related revenue; and new restrictions on salary escalation.
The proposal offers a salary rollback through its lessening of the players' revenue share, which Donald Fehr has already said it a no-go. It seeks to eliminate salary arbitration, which is a plank from the 2005 CBA stalemate. It seeks to cap contracts at five years, and make every year of those contracts a flat rate — i.e. the "true cap hit" contracts that some have clamored for rather than having rampant circumvention.
But most of all, it seeks to delay unrestricted free agency and the "buying out" of UFA years. And it all begins with the redefinition of the rookie contract.
If you're drafted by an NHL team, your goal is to play in the NHL as quickly as possible. Hence, the team that owns your rights has a considerable amount of leverage — there are salary restrictions on the offer they can make, and on the term they can provide. With few exceptions, rookies sign whatever they're given and the strike it rich in three seasons.
The new CBA, according to the NHL's first proposal, would extend that period to five seasons. If an 18-year-old is drafted, his next contract comes around at 23; the 5-year term limit proposed by the NHL for all contracts would take him to 28 years old before he goes unrestricted, should him and the team max both terms.
Two 5-year terms, fitting tidily into a 10-year span of RFA status. In theory, a team could do this and avoid ever having to buy up UFA years if it chose to.
The target here for the owners and the League are the "second contracts" for young star players, when rookie salaries are transformed into massive contracts in treasure and term. From Pierre LeBrun of ESPN last October, on a prophetic column on the CBA talks:
"Second contracts [have] become a big issue among GMs. The trend over this current CBA has seen young players jump from entry-level, three-year deals to monster, lucrative second contracts. GMs with whom we've spoken say the genesis of the issue has liberalized unrestricted free agency. Under the terms of this CBA, players can be UFA at 27 years old, or even younger if they've had seven years of service. For example, Jeff Skinner would qualify for UFA status at the age of 25 because he was an 18-year-old NHL rookie.
"What's transpired over the course of this CBA is that the cost of buying potential UFA seasons from the players when negotiating long-term deals out of their entry-level contracts has skyrocketed because those UFA years are clearly valuable. Hence, Drew Doughty goes from entry level to $7 million a year. Voila.
"The answer, some GMs will tell you, is to bring the UFA age back to 29 or 30 years old. This would make the second contract less expensive to settle if UFA years aren't involved. If you're the players, this is a total no-go. Why the heck would they give up the ground they gained last time around in liberalizing free agency? It helped drive up salaries. This would be a huge giveback."
Under the NHL's new proposal, UFA status would come after 10 seasons in the NHL, rather than at 27 or after seven seasons.
Does that mean a 20-year-old rookie doesn't go UFA until 30? Potentially, yes.
The owners can frame this as altruistic: After all, keeping player salaries in check under the cap and retaining talent for as long as possible makes for a stronger, sustainable contender. Build and grow your core; augment with UFA players and veteran trades.
The players can frame this as an outrageous attempt at restricting player salaries, but probably won't find much sympathy if they do.
Rather, the NHL's proposal of term limits and extending restricted free agency would seem at odds — one is intended to flood a dead UFA market with talent rather than having 20-some-odd star players locked into 9-plus years deals, as they will be next summer; the other pushes that availability, in some cases, into their 30s.
The players could also argue that the elimination of the "lifetime" second contract — think Jonathan Quick, for example — could be a detriment to a franchise's stability. Once more, with feeling: Shouldn't a team that drafts, develops, markets and promotes their talent have a divine right to retain that talent for as long as it desires, if the player agrees?
Based on the first proposal, it looks like free agency will be at issue between the NHL and the NHLPA.