By BRUCE GARRIOCH, SUN MEDIA
OTTAWA -- This is not going to be pretty.
With the National Hockey League and its players' association expected to announce terms of a new collective bargaining agreement -- as early as this week -- players would be wise to brace themselves.
They are about to get hammered -- on salaries and job security.
Not only is the players' bargaining team going to accept the hard salary cap with linkage to NHL revenues it fought tooth and nail to avoid, the unions has given in on several other key issues.
It may not be total surrender, but it's awfully close.
"I would say this is going to be a bombshell for the players," a league source told Sun Media. "They've done a good job at keeping this quiet, but I believe what the union's executive committee is about to accept is going to be a real shocker for some players."
Multiple sources on both sides told Sun Media the deal could contain a framework as follows:
- A hard cap set at 54% of league revenues -- which are projected to drop by $300 million to $1.8 billion (all terms US) next season -- that will include all player salaries, signing bonuses and performance bonuses. (A $2.2 million allotted for insurance and pension plan contributions is not be included in that figure.)
The cap will be in the $39 million range, with a floor of about $24 million. There's talk of a dollar-for-dollar luxury tax starting around the $30 million mark, with that money redistributed to lower revenue teams.
- Another shocker in this deal could see the players agreeing to put 15-20% of their annual salaries into escrow every year. If the league doesn't meet its revenue projections, then part, or all, of that 15% could go back to the teams to help cover costs. The NBA has a similar clause in its CBA, but many NHL players will find it hard to stomach.
"We've talked a lot in our meetings about how stupid that idea is," said one NHL veteran. "I sure hope that doesn't happen to us, but it might be too late to stop."
It could also mean if a player gets injured, then his teammates essentially are paying for somebody else to be called up because teams will be spending above the projected revenue numbers. Sources on the players' side indicated this issue is going to be a tough sell when it comes to getting the agreement ratified.
- Entry-level salaries could be capped at $850,000 for three years, with a maximum signing bonus of 10% per season. That means expected 2005 No. 1 pick Sidney Crosby would receive a maximum of $85,000 in signing bonuses in each of the first three years of his deal.
"I don't know why he wouldn't sign in Europe for $2 million tax free and stay there until he can escape the entry level system, if this is what happens," a league source said.
- It's expected the players will accept the 24% rollback they offered in December. Qualifying offers likely will be kept at 100%, but there will be no 10% raise for players below the league average. It could have been worse: The NHL held out until two weeks ago for qualifying offers to be set at 75%.
- Contracts from last season are not expected to be honoured, which means the market will be flooded with free agents. Unrestricted free agency is expected to fall to age 30 in 2005-06, 29 in 2006-07 and 28 in 2007-08.
- Teams will be allowed a one-time, two-thirds buyout of existing contracts that won't count towards the cap. For example, the St. Louis Blues owe $20 million in salary to defenceman Chris Pronger, centre Doug Weight and winger Keith Tkachuk alone next season. Guess what? They all won't be back, because the Blues have the chance to reset their own market and prepare for the hard cap. If a team buys out a player, it can't re-sign him for another year.
- The word is commissioner Gary Bettman would like absolute power to fine and suspend players. Under the terms of the last CBA, the maximum fine was a paltry $1,000. That number could be about to change.
- The league minimum salary is expected to move from $175,000 to $400,000.
How was this all shake down for the players?
The stars in the game are still going to make their money, but a lot less of it. But the role players are going to be stuck at the league minimum.
Many believe the middle class will be squeezed out because the top six players on every roster are going to get their money. The rest will become spare parts interchangeable at a low price.
The talk around the league is that the NHLPA's executive committee -- and executive director Bob Goodenow -- have been bitterly divided by this negotiation. It's believed senior director Ted Saskin, president Trevor Linden and director of business development Mike Gartner have taken the lead role in these talks because they believe they will get support.
"This is going to be a tough sell to the players and a bitter pill to swallow," said a source.
OTTAWA -- This is not going to be pretty.
With the National Hockey League and its players' association expected to announce terms of a new collective bargaining agreement -- as early as this week -- players would be wise to brace themselves.
They are about to get hammered -- on salaries and job security.
Not only is the players' bargaining team going to accept the hard salary cap with linkage to NHL revenues it fought tooth and nail to avoid, the unions has given in on several other key issues.
It may not be total surrender, but it's awfully close.
"I would say this is going to be a bombshell for the players," a league source told Sun Media. "They've done a good job at keeping this quiet, but I believe what the union's executive committee is about to accept is going to be a real shocker for some players."
Multiple sources on both sides told Sun Media the deal could contain a framework as follows:
- A hard cap set at 54% of league revenues -- which are projected to drop by $300 million to $1.8 billion (all terms US) next season -- that will include all player salaries, signing bonuses and performance bonuses. (A $2.2 million allotted for insurance and pension plan contributions is not be included in that figure.)
The cap will be in the $39 million range, with a floor of about $24 million. There's talk of a dollar-for-dollar luxury tax starting around the $30 million mark, with that money redistributed to lower revenue teams.
- Another shocker in this deal could see the players agreeing to put 15-20% of their annual salaries into escrow every year. If the league doesn't meet its revenue projections, then part, or all, of that 15% could go back to the teams to help cover costs. The NBA has a similar clause in its CBA, but many NHL players will find it hard to stomach.
"We've talked a lot in our meetings about how stupid that idea is," said one NHL veteran. "I sure hope that doesn't happen to us, but it might be too late to stop."
It could also mean if a player gets injured, then his teammates essentially are paying for somebody else to be called up because teams will be spending above the projected revenue numbers. Sources on the players' side indicated this issue is going to be a tough sell when it comes to getting the agreement ratified.
- Entry-level salaries could be capped at $850,000 for three years, with a maximum signing bonus of 10% per season. That means expected 2005 No. 1 pick Sidney Crosby would receive a maximum of $85,000 in signing bonuses in each of the first three years of his deal.
"I don't know why he wouldn't sign in Europe for $2 million tax free and stay there until he can escape the entry level system, if this is what happens," a league source said.
- It's expected the players will accept the 24% rollback they offered in December. Qualifying offers likely will be kept at 100%, but there will be no 10% raise for players below the league average. It could have been worse: The NHL held out until two weeks ago for qualifying offers to be set at 75%.
- Contracts from last season are not expected to be honoured, which means the market will be flooded with free agents. Unrestricted free agency is expected to fall to age 30 in 2005-06, 29 in 2006-07 and 28 in 2007-08.
- Teams will be allowed a one-time, two-thirds buyout of existing contracts that won't count towards the cap. For example, the St. Louis Blues owe $20 million in salary to defenceman Chris Pronger, centre Doug Weight and winger Keith Tkachuk alone next season. Guess what? They all won't be back, because the Blues have the chance to reset their own market and prepare for the hard cap. If a team buys out a player, it can't re-sign him for another year.
- The word is commissioner Gary Bettman would like absolute power to fine and suspend players. Under the terms of the last CBA, the maximum fine was a paltry $1,000. That number could be about to change.
- The league minimum salary is expected to move from $175,000 to $400,000.
How was this all shake down for the players?
The stars in the game are still going to make their money, but a lot less of it. But the role players are going to be stuck at the league minimum.
Many believe the middle class will be squeezed out because the top six players on every roster are going to get their money. The rest will become spare parts interchangeable at a low price.
The talk around the league is that the NHLPA's executive committee -- and executive director Bob Goodenow -- have been bitterly divided by this negotiation. It's believed senior director Ted Saskin, president Trevor Linden and director of business development Mike Gartner have taken the lead role in these talks because they believe they will get support.
"This is going to be a tough sell to the players and a bitter pill to swallow," said a source.
