NHL, players wrestle over hockey-related revenue
NHLPA executive director Donald Fehr. (BRENDAN McDERMID/Reuters file photo)
National Hockey League owners and players are both trying to hit a home run with "HRR."
That's the key acronym in the sluggish collective bargaining talks, standing for "hockey-related revenue." And as expected, HRR is now at the plate with a lockout at stake.
HRR clouded the second day of talks in New York on Wednesday as the union had a lukewarm reply to the owners' Tuesday proposal.
"Some owners believe that before we determine how to divide up the pie, there are things we should take out of the pie," union boss Donald Fehr said Wednesday.
Commissioner Gary Bettman had offered new terms on a revenue split, coming off the 43% in revenue sharing that had players up in arms, to what he hoped was a more palatable 46%.
Each percentage point could be worth as much as $30 million US, but after benefitting from a 57% cut for the seven years of the current deal, the players aren't willing to give back without the owners showing more of their HRR cards.
The players are concerned that some definitions of HRR have changed in these talks, making them suspicious about how much money the league is looking to take back, much of it to aid its struggling franchises.
"We asked about current financial numbers, where are the problems we need to fix, what is the magnitude," Fehr said after a 90-minute meeting with Bettman at league headquarters. "We want to know what revenue payments the (successful) teams on the high end of the scale are going to be willing to make that aren't paid for in reductions to player salaries. Our preference is to leave the definitions the way they are because everyone understands what they mean and what the effect is.
"We wanted to get the most current financial numbers the league has from last year. We don't have those, but I understand there's a bunch of information on its way over to us."
That was where Wednesday's 90-minute meeting between Fehr, Bettman and their respective right-hand men was left hanging.
Fehr and outside counsel Steve Fehr asked questions of the six-year deal, requested further business data from the league and went into huddle with 11 players in town, with the promise of giving Bettman a counter-proposal on Thursday.
Bettman said any proposed changes in HRR were to "reflect reality". He mentioned examples such as concession expenses and the operation of NHL Enterprises.
"They cost us money, especially in this economic climate," Bettman said,
Meanwhile, the clock is ticking down to a Sept. 15 shutdown of operations.
Bettman felt the league made a "significant" move on Tuesday by backing off its initial demand that the players drop to 43%. The league had a phase-in period of three years for its six-year plan that would cost players at first, particularly in escrow money that is taken off their cheques, but would see them recover by the end of the term, provided the game grows and the troubled teams recover.
"(Tuesday's offer) moved more money than the first proposal by the players," Bettman claimed. "We made a seven-year deal on 57%, but there was no sense that 57% was going to be there in perpetuity. (What) if we were getting 43% and paying all the expenses from running the game and our clubs. Any sense that our initial offer didn't have a sense of fairness to it (is wrong). Now we've moved off that significantly and dramatically in an attempt to move this process forward and get traction to make a deal on a timely basis."
But Donald Fehr still has a number of concerns, not the least of which is players now under contract would be facing higher escrow payments, which in the league's mind accomplishes some of what a salary rollback would.
"When fully phased in, the (league's plan) would reduce the players' share (of HRR) by 19.3%," Fehr said. "You can't accomplish that kind of reduction without some modification in the way players are paid. If a player doesn't get the dollar value of the contract because of a rollback or because there is escrow, he still doesn't get that amount."