Let’s be clear – they’re not $182M apart

Even since the NHL released its scorched-earth proposal in July, they pretty much gave up the public relations battle in the current CBA standoff. A proposal like that looks so ridiculous that it’s difficult to even take seriously. Having said that, they started to look better as the two sides moved closer to one another and the players seemed to be slowing things down. Thus, the NHLPA needed to take some steps to put the heat back on the league.

They accomplished that in a very clever way a couple of weeks ago when they made their most recent proposal. They proposed a compromise where they would accept a 50/50 split of revenues and an increase in the league’s funding of the “make whole” provision. Everyone seems to agree that the two sides will eventually land on a 50/50 split, and if true then the other major monetary issue is the funding of the so-called “make whole” provision. The league has proposed to set aside $211M to compensate players for earnings lost as the revenue split moves from 57/43 to 50/50, while the players have asked the league to fund $393M in compensation. After that recent proposal by the NHLPA, a memo to players was leaked in which Donald Fehr cleverly made the assertion: “Now that we have made this proposal, there is no longer any doubt as to how far apart the parties are in dollars….. Under our proposal, it is now undisputed that the gap is only $182 M over 5 years. “

This was a masterstroke. Since then, dozens of writers have written that the two sides are only $182M apart. Try Googling “NHL $182 million” and see what comes up. Plenty of people have divided that by 30 teams and 5 years and come to the conclusion that it’s peanuts in the grand scheme of things. Which it would be if it were accurate. But, as often happens in this kind of negotiation, people don’t always tell the whole truth. One part of the truth is that the difference between the two “make whole” proposals appears to be $182M. However, it goes unsaid that the two sides don’t agree on the nature of the 50/50 split. The NHLPA’s proposal would put the NHL solely at risk in case NHL revenues fluctuate, while the NHL proposal would see the split be 50/50 in any case (check out my previous post on how this could play itself out). The truth is that while the two sides are within striking distance of an agreement, they still have some fundamental ideas which are in opposition to one another.

It’s also true that the NHL has asked for a number of concessions on contracting terms, most of which have not been accepted by the NHLPA. From what I can see, those terms would not result in changes to the amount of money paid to the players on the whole, but they would allow the owners more leverage in how they pay out that money.

When you see an analyst on TV saying “They’re only $182M apart, why can’t they get this thing solved?”, don’t believe it. They’re not that close. But they’re also not that far – it’s thought that the moderates among the NHL owners would push to give up most of those contracting demands if the players would agree to their version of the 50/50 split and some sort of compromise on “make whole”. And that is what they two sides should be talking about when they get together next…

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