Fans of the video game series the Witcher know that the mythos of that game contains an old adage: No Witcher has lived long enough to die in his bed of natural causes.
Such has been the case with NHL Collective Bargaining Agreements (CBA’s), which are ordinarily prematurely terminated and thus result in massive labor disputes that have cancelled 1.5 seasons of hockey in the last few years. Today, the NHLPA (who had the ability to opt-out of the current NHL CBA) announced, it would maintain the effectiveness of the current CBA which was enacted in 2013.
For longtime fans of the NHL, no explanation needs to be given on what the results of an opt-out of the 2013 CBA would have meant. Every fan still vividly remembers the cancelled 2005-2006 season, and the shortened 2012-2013 year. While these labor disputes understandably upset fans, such disputes have historically and ordinarily occurred within the confines of collective bargaining regardless of the industry in which each strife has taken place. It comes with the territory of unionism and collective bargaining.
But why are we once again at this point after so many previous negotiations?
Collective bargaining is complicated. It really is. And the quick answer is that several in-depth analyses describe the plethora of issues with this CBA and major decisions regarding the business of hockey. This CBA is by no means perfect and everyone seems to have concerns with it regardless of their affiliation. Every previous negotiation created additional turmoil even if it actually solved the major issues at the time. But once something was seemingly fixed, another problem would arise. Yet the 2013 CBA will survive in spite of all of these complexities.
Procedurally, the CBA needed both the league and the players union to opt-in to continue to operate through its intended life span. The NHL opted-in in late August and the NHLPA opted-in today. Had the NHLPA opted-out, analysts familiar with the collective bargaining process would have stated that “in every conflict there is an opportunity.” But instead, the NHLPA’s decision potentially demonstrates that the traditionally and publicly adversarial processes that resolved the last two CBA’s might be at an end.
The NHLPA’s decision to keep this CBA in-effect hints at maybe a chance of a thoroughly productive negotiation session and hopefully (especially for all parties involved) a chance for the players and the league to resolve their differences without any further prolonged labor dispute. This sentiment is highlighted by the Executive Director of the NHLPA’s, Don Fehr, statement that the best course of action would be working together with the league and begin such resolution with talks regarding extending the CBA.
This now means that the two entities can negotiate over the next three seasons (including this one) as to how best implement changes to the CBA.
So what needs to be changed?
Katie Strang of the Athletic has written some great articles about the various issues of the CBA and I highly suggest reading some of her work for greater detail about these issues.
To summarize lightly, major issues will include NHL participation at the Olympic games, the percentage of revenue splits, the inclusion of escrow payments within player contracts, player contract durations,[1] and signing bonuses. However, there is also reason to suspect that the Jimmy Vesey Rule on college free agency and the holdout issue affecting NHL RFA’s may also be issues that need to be fixed as each has affected teams. Nick Ritchie, William Nylander, Mitch Marner, Mikko Rantanen, and Patrik Laine highlight the former issue, while Will Butcher, Jimmy Vesey, Alex Kerfoot, Chase Priskie, and Cal Peterson showcase the latter.
But undoubtedly the biggest issue affecting NHL collective bargaining is the division of the total amount of revenue generated each season. This revenue is calculated through a prescribed formula which determines the “upper limits” and “lower limits” of the salary cap[2] for a given year.[3] Under the 2013 CBA, the players are entitled to 50% of “Hockey-Related Revenue,”[4] which represents a drastic decline from the NHLPA’s entitled percentage under the 2005 CBA. Under the previous CBA, the players’ percentage was based upon the total amount of revenue generated by the NHL each year.[5] This total often reached the maximum of 57% of the generated Hockey-Related Revenue.[6] Thus, a 7% decline in revenue means a loss of at least $189,000,000 every year.[7] These two sides aren’t discussing small amounts of revenue. How this will play out remains to be seen. All of these are complex and balance many interests. Negotiating a satisfying resolution will not be easy.
The State of Negotiations Thus Far
In 2016, the League offered the players a chance to participate in the 2018 Olympic Games in Pyeongyang.[8] In exchange, it asked the NHLPA to extend the current CBA until 2025, a proposal that was rejected by the union.[9] When asked about a potentially new CBA negotiation, Donald Fehr did not mince words, stating that the “players are cognizant of the fact that in the last negotiations they made a series of significant concessions.”[10]
All of that is still present and there is no reason to believe that anyone’s position has changed. However, what appears to have changed is the form to which this negotiation has been done. Perhaps this is a sign of a more cooperative approach in the future. I certainly hope so for everyone’s sake. While I can sympathize the complexity of operating a global powerhouse such as the NHL and the stakes of each players’ livelihood, my hope is that three additional years of negotiation can result in productivity and solutions that actually resolve some of these disputes and lead to fewer conflicts down the road.
The Elephant in the Room
Keeping the CBA in effect right now benefits the league in one major fashion: it keeps the Seattle franchise’s commencement alive. Seattle is scheduled to begin play after this season, the year that would have been locked out had the NHLPA decided to opt out. Now, Seattle gets to benefit from what is assumed to be the same expansion draft rules that Vegas received back in 2017, which most assuredly means a vast source of additional revenue for professional hockey.
It remains to be seen if Seattle will be the new Vegas Golden Knights who stormed the league with their active Twitter account, solid uniforms, talented roster, and dark horse spirit, but keeping the CBA means that Seattle will at least have a chance to match that.
Conclusion
Whether this decision remains a win for anyone but Seattle is currently unknown. But this announcement is undisputedly a huge step toward progress. Maybe this will result in the long term solution that has evaded the NHL for decades. We can all enjoy this 3 year period of peace, but maybe this will be a sign of better things to come.
[1] Katie Strang, The Big Issues Facing NHL, NHLPA in Upcoming CBA Talks, The Athletic (Aug. 20, 2018), https://theathletic.com/480706/2018/08/20/the-big-issues-facing-nhl-nhlpa-in-upcoming-cba-talks/.
[2] See NHL CBA FAQ, Capfriendly.com, https://www.capfriendly.com/faq#upper-lower-limit (stating that the salary cap defines the maximum and minimum amount of money that a team can spend on all of its players in a given year)
[3] CBA 2012, Art. 50.5(b), at 258.
[4] See id., Article 50.1 (stating that Hockey-Related Revenue includes, among other things, money generated from broadcast agreements, merchandise sales, publications, sponsorships, parking receipts, and ticket receipts, including those from: from special games, preseason games, playoff games, regular season games, international games, and suites); Id., Art. 50.4(b).
[5] Collective Bargaining Agreement Between National Hockey League and National Hockey League Player’s Association, Art. 50.4(b), 193–94 (2005), [hereinafter CBA 2005], http://www.letsgopens.com/NHL-2005-CBA.pdf.
[6] Id.
[7] Id. (showing that players were previously entitled to 57% when the total amount of revenue reached at least $2.7 billion).
[8] Cory Wilkins, Fehr: Players Made ‘Significant Concessions’ in Last CBA Talks, TheScore (Sept. 2018), https://www.thescore.com/nhl/news/1588610.
[9] Id.; Josh Gold-Smith, Report: NHL Offers to Extend CBA to Ensure Players’ Olympic Participation, TheScore (2016), https://www.thescore.com/nhl/news/1156926-report-nhl-offers-to-extend-cba-to-ensure-players-olympic-participation.
[10] Wilkins, supra note 8.
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