No Surprise NHLPA Rejects NHL CBA Proposal
On November 16, 2016, National Hockey League commissioner Gary Bettman made a surprising proposal to the NHL Players Association. In exchange for NHL participation in the 2018 Winter Olympics in Pyeongchang, South Korea, the players would have to accept an extension of the current collective bargaining agreement by three years.
After mulling Bettman’s offer for two weeks, the PA rejected it. NHL participation in the ’18 Games now appears to be a long shot.
Bettman recently cited the unhappiness of team owners in shutting down the league for a two-week Olympic break. In September, deputy commissioner Bill Daly claimed the Olympics hadn’t help the league’s business.
Another sticking point was the International Olympic Committee’s unwillingness to pick up the tab for the players’ insurance and transportation. The International Ice Hockey Federation recently announced they would cover those costs, but it doesn’t appear as though that will sway the NHL to take part in the Pyeongchang Games.
Considering these factors, Bettman’s proposal to the PA was remarkable. And at first glance, it appeared to be a winner for everyone. The players would continue to perform in the Olympics, and there would be potential labor peace to 2025.
But according to PA director Donald Fehr, there were “elements” in the CBA the players wanted to further examine before getting into bargaining with the league. Doing so would apparently take too long to accomplish in time for the league to reach a decision on going to Pyeongchang.
One of those elements is the escrow claw-backs from the players’ salaries. In recent years, that’s become a significant issue for the PA membership.
Under the current system, a certain percentage of their salaries (based upon quarterly revenue projections) is held in escrow. If revenue exceeds expectations by season’s end, the players get that money back with interest. Otherwise, the money returns to the owners.
The decline in the Canadian dollar over the past two years has led to sluggish revenue growth, meaning the players are making less money. It shouldn’t be surprising to anyone that they don’t like the idea of being locked into the current system beyond 2022.
League headquarters could attempt to paint the players as the bad guys for rejecting Bettman’s offer, passing up Olympic participation over money. But don’t forget, it’s the team owners expressing reluctance to take part in the ’18 Games. The players are still keen to go, but not at the cost of being locked into an unfavorable escrow system for three more years.
What’s intriguing here is the NHL is reportedly interested in taking part in the 2022 Olympics in Beijing, China. The opportunity to tap into the huge Chinese sports market in 2022 is apparently a more enticing option. In other words, the team owners apparently don’t like the notion of shutting down the league for two weeks in 2018 to go to Pyeongchang, but they have no problem doing so to go to Beijing in 2022.
In the meantime, what’s the fallout from the PA rejecting the league’s Olympics-for-CBA extension offer?
Bettman will probably announce next year the the NHL is skipping the 2018 Olympics, while leaving the door open to return in 2022.
Some NHL stars could still decide to represent their countries in Pyeongchang, even at the risk of suspension by their NHL teams or the league. Washington Capitals captain Alex Ovechkin’s made no secret of his intent to do so. If a number of stars follow his lead, the NHL will have a potentially embarrassing situation on its hands.
The end date of the CBA will remain September 15, 2022, with the league and the PA having the right to opt out in September 2019. If one or the other goes that route, the 2019-20 season will be the last of this agreement.
Escrow will be a significant issue in the next round of collective bargaining, perhaps being the key factor that determines if the NHL owners once again decide to lock out the players. The league won’t do away with the escrow system, so expect the players to seek a hard cap on those payments.