1. Sports
Send to a Friend via Email
You can opt-out at any time. Please refer to our privacy policy for contact information.

NHL Lockout Watch 2012: Negotiations as of August 30

"Hockey Related Revenue" is emerging as a big sticking point.


NHL Lockout Updates: Check here for the latest on negotiations between the NHL and NHL Players' Association..

NHL commissioner Gary Bettman has said the owners and players "have different views of the world." NHL Players' Association executive director Donald Fehr has described the differences between the two sides are as a "pretty substantial monetary gulf." Here's a point-by-point look at where they stand as negotiations continue towards a new NHL collective bargaining agreement.

Details are gathered from assorted media sources, and most points have not been confirmed by the NHL or NHLPA.

The Salary Cap

Everyone agrees that the salary cap structure will remain.

But both sides want to change how the cap is calculated.

The owners want the cap number set for every year of the new agreement That cap would start at $58 million and rise to $62 million within four years.

That would be unlike the 2005-2012 system, in which the cap was set every summer, based on estimated league revenues for the following season.

The players are also willing to set the cap every season, but only for three years. Estimates have their cap proposal starting at $69 million in year one and going up to $75 million by year three.

The Players' Share of the Cash

Under the 2005 CBA, the players were guaranteed a fixed percentage of overall NHL revenues. Last season, it was 57 percent of about $3.3 billion. League revenues have steadily increased since 2005, so the players' share has increased with it.

In their opening proposal, the owners wanted to reduce the players' share from 57 per cent to a reported 43 per cent. In their latest offer, they moved off that figure. Numbers are hard to pin down, but it's now believed that the owners are looking at an approximate 50/50 split over a six-year agreement.

With its proposed salary cap over the next three years, the NHLPA says there will be much more money left for the owners. Assuming revenue growth continues averaging about seven per cent every year, the players say the new system would save the owners about $465-million compared to what they would have paid under the 2005 CBA.

"Hockey-Related Revenue"

This has emerged as possibly the most contentious issue.

Hockey-related revenue (HRR) defines exactly what is included when the NHL calculates its total revenue every year.

The owners want to narrow the definition of HRR to exclude some income sources.

According to Donald Fehr, this would represent another big cut to the players' income.

Not only would their revenue share drop from the 57 per cent to 50 percent. It would be 50 per cent of a much smaller pot. Fehr say it's more like a 46 per cent share when you account for the proposed cuts in HRR.

The players want to maintain the current definition of hockey-related revenue."

Escrow Payments

To ensure the correct revenue split, a percentage of player salaries is placed in an escrow account every season. When exact league revenues are calculated at the end of the season, the escrow cash is divided to ensure that the players get their agreed-to share.

Players estimate that the owners' latest proposal would see escrow payments climb as high as 15-to-20 per cent of a player's salary. That more than doubles the escrow payments made under the 2005 CBA. The players oppose this.

Revenue Sharing

This appeared to be a major issue in early talks, but faded from prominence as talks continued in late August.

The revenue bonanza of recent years has not included every NHL team. Those in the biggest and healthiest hockey markets are making more money than ever. But it's estimated that six-to-ten franchises are struggling to break even.

According to various estimates, the NHL's current revenue-sharing plan sees the rich teams distribute $140 million-to-$180 million to the poor teams every year.

The players' initial offer called for a revised system that would see more than $250 million shared between teams every year. It would eliminate restrictions that leave teams in large markets ineligible for revenue sharing, and eliminate penalties to small-market teams that fail to grow revenue.

The owners, according to Bettman, are willing to increase revenue sharing "in a variety of ways," but are more focused on "paying out less in player costs."

Entry-Level Contracts

Players in their first three years of NHL employment are the cheapest, because of strict limits on "entry-level" contracts.

The owners want the entry-level term increased to five years.

The players want no change to the current system.

Unrestricted Free Agency

The owners want a player to put in ten NHL seasons before qualifying to become an unrestricted free agent.

The players want no change to the current UFA threshold, which is seven years of service, with limited exceptions.

Maximum Contract Terms

The owners want to limit player contracts to a maximum of five years.

The players want no change to the current system. There is currently no limit on the length of a contract.

Salary Arbitration

The owners want to eliminate the current system of salary arbitration.

The players want no change to the current system.

Salary Cap Flexibility

The players want to give teams the flexibility to spend up to $4 million over the salary cap or drop as low as $4 million under the salary floor. This would be achieved by new rules allowing teams to trade salary-cap space.

Non-Player Spending

The players are proposing a cap on how much teams can spend on coaching, scouting, management, and other off-ice expenses.

Extra Draft Picks

The players are proposing a mechanism that could see financially troubled teams awarded extra selections in the NHL Entry Draft.

See also: Key Points in the 2005 NHL Collective Agreement

©2014 About.com. All rights reserved.