BREAKING - November 21, 2012 NHLPA Memo to Members

Today, Donald Fehr issued a memo to the players after meeting with the NHL. 

He starts the memo as follows:

The NHLPA’s Negotiating Committee today provided the NHL Owners with a comprehensive 6 page proposal on the key issues (see below). As you will read in the proposal, the players have made substantial moves in order to address all of the owners’ concerns, end the owners’ lockout and get the game back on the ice. Our proposal works off the league’s proposed language/structures and moves off our position that there be a guaranteed players’ share. These are major moves in the owners’ direction. Regarding player contractual issues, we have also addressed the owners concerns regarding back-diving contacts and NHL contacts being “buried” in the minors.

Fehr continues by indicating that there is now an "undisputed gap" between the sides when it comes to revenue:

Now that we have made this proposal, there is no longer any doubt as to how far apart the parties are in dollars.  As you will recall, we had previously said we thought the gap was less than $200M, while the owners had said that the gap was much larger and close to $1B.  Under our proposal, it is now undisputed that the gap is only $182 M over 5 years.  Now it is up to the owners to finally make a move towards the players.

At the same time, we have protected player rights by refusing to accept their proposals restricting free agency and salary arbitration. 

Fehr continues by outlining the key points in the NHLPA's proposal:

Here are a few significant details from our proposal: 

Players’ Share: A major move in the owners’ direction by removing guarantees or fixed targets for Players’ share.

Honouring Players’ Contracts/Transition payments: Players’ Share will equal 50 percent of HRR plus fixed payments in the first four years to partially honour player contracts and ease the transition to 50/50:

2012-13 - $182M

2013-14 - $128M

2014-15 - $72M

2015-16 - $11M

Total $393M

*The owners had previously proposed $211M

Long-term back-diving contracts – Cap benefit recapture rule so clubs no longer benefit from front-loading contracts (move in the owners’ direction)

Contracts in the minors – Clubs take a cap hit on contracts in the minors over $1M (move in the owners’ direction)

Four Recall Rule – Unlimited recalls after regular season (move in the owners’ direction)

Salary Arbitration – Elimination of walk-away from arbitrator’s decision, but clubs can still “walk-away” by not qualifying a player

...We will provide a further update following this meeting.  

Here's the actual proposal:

 NHLPA Proposal -- 21 November 2012

This proposal addresses significant open issues concerning revenue sharing, player contracting, the players’ share, and certain other open areas, as reflected below.  This proposal does not address other items upon which we have agreed or are pending, such as health and safety, hockey issues, the “jock tax”, and international. 

1)         Revenue Sharing

•            Pool of $200 Million at $3.303 B of HRR.  Varies year to year with HRR.

•            Contributions to be raised per NHL formula.  No discretion to increase individual team contributions beyond what formula provides

•            Existing level of distributions to be protected for 2 years.  If additional funds needed, raised pro-rata from all teams

•            Revenue Sharing Oversight Committee (RSOC) has discretion to adjust amounts for Phase One distributions by up to +/- 15% per team, provided that all such adjustments are considered and decided upon at one time

o           RSOC by unanimous vote may move beyond +/- 15% limitation towards but not exceeding the straight pool value for regular season HRR.  (Must therefore compute straight pool every year.)

•            Industry Growth Fund to be managed by the RSOC. 

o           IGF will have callable dollars of up to $20M in first year, $40M in second year, and $60M in each subsequent year of the agreement.

o           Need to establish criteria for which teams may apply for IGF funding and/or will submit plans. 

o           IGF funding is available to any team by unanimous consent of RSOC

o           IGF funding also available for industry-wide programs or projects

•            RSOC has seven (7) members selected by the parties in their sole discretion, as follows

o           Four employer representatives, at least one of which must by an owner

o           Three (3) player representatives, at least one of which must be a player

o           Parties may name up to 2 Alternate RSOC representatives who will serve in the event of absence of a member

o           Need to spell out in drafting the process of the RSOC, and limited arbitral review of decisions

2)         Defined Benefit Pension Plan

•            The parties will establish a defined benefit pension plan under US law per the NHLPA proposal. 

3)         Discipline

•            For on-ice discipline, there will be an appeal to a neutral arbitrator or to a panel of three arbitrators (one appointed by each side and one neutral).  The standard of review will be whether the League’s finding of a violation of the League Playing Rules was supported by substantial evidence, and, if so, whether the penalty imposed was within the League’s reasonable discretion and consistent with past practice

•            For off-ice discipline, there will be an appeal to the impartial arbitrator.  The issue will be whether the discipline was for just cause.

4)         Player Contracting and System Issues

•            NHLPA liability for escrow is eliminated from the side letter.

•            NHLPA may set a higher percentage for escrow in a given year than the formula would provide.  The NHL may also set a higher percentage than the formula would provide in the last year of the agreement, provided that any number so set is not unreasonable.

•            The Playoff Pool is increased per the NHLPA proposal

•            Liquidated damages provisions in SPCs are prohibited.  This applies only to new contracts, i.e., contracts entered into after a new CBA is in effect. 

•            Prompt mutual disclosure of European loan agreements, ATOs and PTOs.

•            NHLPA proposal on no trade / no move clauses

•            NHL proposal to prevent a team playing with less than the minimum of 18/2 is accepted provided limitation is the NHL minimum + $100,000; counts against the share but not the cap.

•            Waivers

o           Re-entry waivers are eliminated

o           Waivers will be required to loan a player who is on emergency recall if that player has played 10 games

o           NHLPA proposal on 13.23 waivers

•            Four Recall Rule

o           After the conclusion of the Regular Season,  a Club may exercise an unlimited number of additional Regular Recalls provided that it may have no more than three (3) Players on its Active Roster who were recalled by way of Regular Recall after the Trade Deadline

•            Minimum salary continues to increase on the same schedule as previous CBA, $25,000 every second year

•            Goepfert Rule as proposed by NHLPA  

•            Performance bonus cushion in each year of the agreement

•            The Lower limit must be satisfied without consideration of performance bonuses.

•            Players and cash/cap trading.  A team may have an unlimited number of Retained Salary Transactions up to 15% of the Upper Limit in any League year

•            The amount in excess of $1M paid to a player while in the minor leagues or in Europe on an NHL contract counts against the cap (none counts against the share).   This applies only to new contracts, i.e., contracts entered into after a new CBA is in effect.

•            NHLPA cap benefit recapture proposal.

o           Applies only to new contracts, i.e., contracts entered into after a new CBA is in effect.

o           Applies to contracts of 9 years or longer

o           35 year old rule changed to provide that the cap charge taken will be as per  cap benefit recapture

•            Salary Arbitration

o           Walk away eliminated

•            Second buyout period will continue in its current form except that

o           A Club may not buy out a player who was not on its Reserve List as of the most recent Trade Deadline

o           A Club may not buy out a player who has a cap hit of less than $3 M

•            Critical dates calendar 

o           Sec. 12.3(a) election moved per NHLPA proposal

o           Free agency interview period per NHLPA proposal

•            Salary Cap and Payroll Range

o           Growth Factor, Performance Bonus Cushion, Long-Term, injury continue except for any changes already agreed to or contained in this proposal

o           +8M/-8M payroll range becomes +/- 20% of midpoint beginning in 2013/14

o           The Upper Limit may not fall below 67.25 M in any year of the agreement.  This is half way between the 11/12 Upper Limit (64.3 M) and the 12/13 UL (70.2 M). 

5)         Players’ Share

•            Our players’ share proposal is identical to yours in all material respects except for the amount of the transition payments added to the 50% share.  There are no guarantees or fixed targets, other than a requirement that, beginning with the second year of the Agreement, players’ share, expressed in dollars, may not fall below its value for the prior season.  This proposal allows us to determine players’ share regardless of the effects of the lockout and its aftermath.

•            Player share will equal 50% of HRR, plus these fixed dollar payments attributable to the first four years of the agreement:

•            2012/13          $ 182 M

•            2013/14          $ 128 M

•            2014/15          $   72 M

•            2015/16          $   11 M

•            Payment of these amounts may be deferred for one year (specific payment date to be agreed upon), with the deferral accumulating interest rate equal to the sum of the prime interest rate in effect at The J.P. Morgan Chase Bank on the next June 15, plus 1%.   Payment of these fixed dollar amounts is guaranteed by the League.

•            In years two through five of this Agreement, the players’ share in dollars may not be less than it was in the previous year.

•            Attached are charts which show this proposal against your last in the format you provided after our last proposal.

           

6)         Term of CBA

•            The term of the CBA will be for 5 years/seasons, and will end on September 15, 2017.

7)         Transition Rules to be negotiated

•            May cover, among other things, compliance buyouts, pro-ration of status/service and statistical criteria/thresholds based on the length of the season, movement of deadlines, and any other relevant matters.