Ongoing Flat Salary Cap Bad News for NHL Free Agents
Edmonton and Toronto set to become hub cities, the latest return-to-play and CBA extension news, and more in today’s NHL morning coffee headlines.
EDMONTON, TORONTO TO BECOME HUB CITIES FOR NHL TOURNAMENT
TSN: Bob McKenzie reported Edmonton and Toronto are set to become the two hub cities for the NHL’s return-to-play tournament barring any last-minute complications. Frank Seravalli reports the 12 Eastern Conference clubs would report to Toronto and the 12 Western Conference clubs would head to Edmonton.
SPORTSNET: Chris Johnston reports Phase 3 (training camp) would begin on July 13, with teams traveling to the hub cities as soon as July 25 for Phase 4.
THE ATHLETIC’s Michael Russo reports Las Vegas fell out of the running as a hub city because of recent reports of a rise of positive COVID-19 tests among hotel and casino employees. That defeated the purpose of an NHL player/staff bubble.
LAS VEGAS REVIEW-JOURNAL: Ed Graney reports infection rates are still rising in Nevada, with that state seeing the highest rate of COVID-19 transmission in the United States.
SPECTOR’S NOTE: Vegas was considered a lock to be a hub city until earlier this week when logic finally prevailed. Canada is trending in the right direction as active COVID-19 cases steadily decline.
The league’s return-to-play plan, which includes daily testing, received approval from the Canadian government, the governments of Alberta and Ontario, and the municipal governments of Edmonton and Toronto.
LATEST RETURN-TO-PLAY AND CBA EXTENSION NEWS
TSN: Bob McKenzie also reported the NHL and NHL Players’ Association appear to be drawing closer to an agreement on a return-to-play plan and an extension to the collective bargaining agreement. However, he warns nothing is settled until both sides ratify a tentative deal. The NHLPA membership could vote on Friday or Saturday.
It’s McKenzie’s understanding that non-NHL players signed to NHL contracts in recent weeks (Montreal’s Alexander Romanov, Minnesota’s Kirill Kaprizov, and the New York Islanders’ Ilya Sorokin) won’t be eligible to play in the 24-team playoff tournament.
Frank Seravalli reports the league and PA agreed to an interim extension on all expiring player contracts pending completion of the CBA extension and agreement on Phases 3 and 4 of the return-to-play plan. He also indicates part of the agreement would allow any player to opt-out of return-to-play.
The deals would require two-thirds majority approval from the NHL Board of Governors, but a simple majority from the NHLPA membership. Seravalli indicates it would be a three- or four-year extension to the current CBA. The players are also expected to receive small lifestyle benefits in this deal, such as increases in medical subsidies in retirement and player health insurance, and increase rental/mortgage reimbursement following trade or reassignment.
SPORTSNET: Chris Johnston reports the players’ pay would be delinked from league revenue for the next two years with a 20 percent escrow cap and a fixed salary cap of $81.5 million before eventually returning to a system based on the current model. The players’ would also defer 10 percent of their salaries for next season to a later date.
Johnston also reports there were negotiations on changing the rules on salary structure, with limits on signing bonuses and restrictions on salary variance from year to year. The league is also willing to participate in the 2022 and 2026 Winter Olympics, pending an agreement with the International Olympic Committee on insurance, travel, and other issues.
THE ATHLETIC (subscription required): Michael Russo speculates the IOC’s position on those issues may be softening if the league and the PA made that agreement on Olympic participation. He also cited a player agent saying his clients still don’t have a clear understanding of the economic impact of playing this season versus not playing. They also have concerns over the possible health risks associated with playing this summer.
SPECTOR’S NOTE: We could learn more details on both plans over the next two days. As McKenzie points out, nothing is set in stone yet. The players’ concerns are legitimate and could potentially derail this agreement if not sufficiently addressed.
I’m curious to see what the major CBA changes could be once the deal is ratified. No surprise the league wants to close the loophole on paying the bulk of a player’s salary in signing bonuses. I also expected they would attempt to narrow the salary variance, currently at 50 percent.
Olympic participation was considered among the main sticking points in CBA talks prior to the pandemic interrupting the regular season. That’s a significant concession from the league to the players, but I’m interested in what it will cost the players down the road.
The poison pill, as always, could be escrow. As Seravalli recently noted, the players could end up paying back escrow shortfalls from the pandemic for years if league revenues fail to substantially rebound over the next two or three seasons.
IN OTHER NEWS…
VANCOUVER SUN: Canucks winger Jake Virtanen is catching flak for failing to practice proper social distancing during a recent visit to a Vancouver nightclub. Several teammates took to Twitter condemning what they consider his reckless behavior, especially with the league set to implement the next phase of its’ return-to-play plan.
The Canucks say they’ve spoken with Virtanen, who hasn’t taken part in Phase 2 voluntary small-group training with the club. He will be tested before rejoining the team.
THE ORANGE COUNTY REGISTER: The Anaheim Ducks signed an affiliate agreement with the ECHL’s Tulsa Oilers.
Some players express reluctance about return-to-play plan, hub cities could be in Canada, negotiations continue toward new CBA, and much more in today’s NHL morning coffee headlines.
LATEST RETURN-TO-PLAY NEWS
SPORTSNET: Mike Johnston reports Frederik Andersen admitted he’s not fully confident yet about the resumption of the NHL season. The Toronto Maple Leafs goaltender said he and his fellow players haven’t received enough information on the return-to-play plan as the league and the NHL Players’ Association continue to hash things out. Andersen said he still wants to play and remains hopeful of seeing something the players can vote on soon.
Meanwhile, Johnston’s colleague Eric Engels reported five anonymous players voiced their unhappiness and frustration with being kept in the dark about the return-to-play negotiations.
One of them estimated up to 75 percent of the NHLPA membership didn’t want to play this summer, citing health and injury concerns. Another considered the PA calls with players a joke, claiming they’re only focused on the financial side. Despite those issues, one of them believes the players will likely vote to approve whatever is presented to them, suggesting the playoff bonus money will be higher than ever if they play.
SPECTOR’S NOTE: Andersen isn’t the only player to go on the record claiming they still don’t know the details of the return-to-play plan. Montreal Canadiens goalie Carey Price recently indicated he wasn’t prepared to vote for the deal until more details had been sorted out, though he returned to Montreal earlier this week to participate in Phase 2 practice sessions. Several others also said the same.
The Athletic also recently published a report citing several anonymous players and agents expressing unease over playing in a hub city environment, with one agent suggesting up to 40 percent of the players were on the fence. The PA leadership could have a difficult job selling the merits of the plan to a membership expressing growing concern over the details.
Nevertheless, the players still control the fate of this season. If they vote for it despite their concerns they’ll have to accept the consequences.
TSN: Bob McKenzie reports it appears the NHL won’t reveal the two hub cities for the playoff tournament until the return-to-play plan and the CBA extension are agreed to pending player approval. He also thinks there’s a good chance both hubs could be in Edmonton and Toronto as Las Vegas seems to be falling out of the running. Chicago is also considered in the mix while Los Angeles is now out.
McKenzie also expected critical negotiations between the league and the PA to continue through last night. If all goes well, a vote by the players could take place by the end of this week.
**UPDATE** McKenzie reports the hub cities will be Edmonton and Toronto barring any last-minute complications.
ESCROW A STICKING POINT IN CBA TALKS
TSN/NEW YORK POST/THE HOCKEY NEWS: Frank Seravalli, Larry Brooks, and Ken Campbell report the players could end up paying back their share of lost revenue to the owners for many years if a flat salary cap and a cap on escrow payments over the next two or three seasons becomes part of the CBA extension.
Seravalli points out the players could end up owing $325 million entering 2020-21 because of this season’s reduced revenue. If next season’s revenue is half of the projected $5 billion the league was anticipating for this season, an additional $600-$700 billion could be added to what the players already owe. It would take the following years under a flat cap (assuming revenue returns to normal) for the players to pay that back through escrow sometime during 2023-24.
Unrestricted and restricted free agents during that period could feel the effects, especially those coming off entry-level contracts. Brooks believes it will strangle contending clubs that historically spend toward the cap, forcing contract buyouts (though not amnesty buyouts as sources told Brooks), more arbitration hearings, and flooding the free-agent market.
SPECTOR’S NOTE: As always with the NHL CBA, the devil is in the details and we don’t know what those are yet. Nevertheless, the escrow issue could prove the determining factor in the players’ vote on the return-to-play plan.
If a CBA extension creates those aforementioned issues, it would affect how teams have built and maintained their rosters, resulting in a considerable amount of player movement. It could also set the table for another lengthy labor war down the road when the extension expires in 2026.
SPORTSNET: Elliotte Friedman reports participation in the Winter Olympics is part of the proposed CBA extension. The players would participate in at least the 2022 Beijing Games.
SPECTOR’S NOTE: That would be a major concession from the league. If I were a player, however, I’d be suspicious about what I might have to give up in return.
**UPDATE*** TSN’s Bob McKenzie reports a long night of negotiations appears to have resulted in agreements on most issues regarding return-to-play and CBA extension. A couple of issues could be finalized today. However, nothing is official until both sides ratify a tentative agreement
IN OTHER NEWS…
TSN: The players with signing bonuses in their contracts paid out on July 1 are expected to receive them as planned, though some might be pushed to next week. That’s an expenditure of over $300 million.
ARIZONA SPORTS: Coyotes winger Phil Kessel admitted he’d been nursing injuries for most of this season. That could account for his decline in production, though he didn’t use that as an excuse. Kessel added he’s looking forward to a bounce-back performance.
THE SCORE: San Jose Sharks winger Evander Kane believes the NHL doesn’t do enough to market its minority players.
LE JOURNAL DE MONTREAL: The Carolina Hurricanes have parted ways with Rick Dudley, who was their VP of hockey operations.
SPECTOR’S NOTE: That’s sparked speculation he could be headed to the Buffalo Sabres, who gutted their front-office staff last month.
The NHL and NHLPA look ahead to the second phase of transition from the self-quarantine period, plus updates on the Hurricanes, Islanders, and more in today’s NHL morning coffee headlines.
THE LATEST ON THE POSSIBLE RESUMPTION OF THE NHL SEASON
NHL.COM: The league and the NHL Players Association released a statement indicating they haven’t made any decisions or set a timeline for a possible return to play scenario. However, they are looking ahead to Phase 2 to transitioning out of its current self-quarantine period.
“The precise date of transition to Phase 2, during which Players might return to small group activities in NHL Club training facilities, remains undetermined. However, provided that conditions continue to trend favorably – and, subject to potential competitive concerns as between disparately situated markets – we believe we may be able to move to Phase 2 at some point in the mid-to-later portion of May. Specific guidelines governing Player and Hockey Staff activity would be provided at that time.”
SPECTOR’S NOTE: The league and the PA are pumping the brakes on recent speculation suggesting they could resume the season in July. That option floated last week by league commissioner Gary Bettman and deputy commissioner Bill Daly, sparking the recent media chatter. Although they stressed nothing was set in stone, resuming the schedule in July appears to be their best-case scenario.
Reopening the season still depends upon approval from state and provincial health officials in the cities proposed as hosts for NHL divisional games. Dr. Anthony Fauci, the leading health expert on the U.S. COVID-19 task force, is expressing caution over a possible return of pro sports in North America this season. “If you can’t guarantee safety, then unfortunately you’re going to have to bite the bullet and say, ‘We may have to go without this sport for this season,” said Fauci.
SPORTSNET: Mark Spector reports the planning work by the NHL during this period will allow them to be ready out of the gates if they get approval to resume the schedule. A sticking point is trying to get games back on television without requiring players to be quarantined away from their families for weeks at a time.
SPECTOR’S NOTE: Family separation has emerged as a concern for several NHL players. Winnipeg Jets forward Adam Lowry is the latest to speak publicly about this issue. While Lowry is single and doesn’t have any children, he feels it would be unfair to expect married players to spend perhaps up to four months quarantined from their families.
Spector points out fulfilling local television contracts is an incentive for non-playoff NHL clubs to resume the season. If completing the regular season isn’t possible, a popular playoff scenario would see the top six teams in each division meeting in one city.
SPECTOR’S NOTE: ESPN’s Greg Wyshynski pointed out that scenario would mean the Buffalo Sabres and Anaheim Ducks would be playoff clubs, while the New York Rangers (who have a better record) would not.
TORONTO SUN: Joe Warmington believes Toronto and the Greater Toronto Area would be the perfect hub as a neutral-site divisional host city. It has everything the league needs: “NHL and television-ready arenas, and plenty of accommodation for players and team staff.”
SPECTOR’S NOTE: Toronto is rumored to be among the host city favorites, but that depends upon the approval of Ontario’s health minister.
TORONTO STAR: Kevin McGran recently explored how escrow might help the NHL keep teams intact if the pandemic crashes league revenue, especially for next season. He doubts the players would accept rolling back salaries, while the owners probably wouldn’t go for a system that would accept an exemption to allow players to collect salary outside the cap. Lowering the cap and allowing compliance buyouts would gut rosters, especially those of playoff contenders.
McGran suggests leaving the salary cap at around $80 million and setting escrow at 40, 50, or even 70 percent, thus leaving rosters and contracts intact. Everyone takes a hit, but escrow can be reduced throughout the season as revenues come back.
SPECTOR’S NOTE: Higher escrow clawbacks could be among the options whenever the league and the PA discuss next season’s salary cap. It’ll be interesting to see how they address reduced revenue and its effects upon salary cap payrolls.
IN OTHER NEWS…
THE NEWS & OBSERVER: The Carolina Hurricanes could soon be cutting ties with the Charlotte Checkers as their AHL affiliate. It’s believed the Hurricanes could soon have a deal with the Chicago Wolves, while the Checkers could become the new affiliate of the Florida Panthers.
ESPN.COM: Seattle’s NHL expansion franchise is getting close to revealing its name, team colors, and logo.
NHL.COM: “The new arenas for NHL Seattle and the New York Islanders remain on schedule for opening for the 2021-22 NHL season.”
A second Senators player tests positive for COVID-19, plus the latest on Shea Weber, Johnny Boychuk, Jacob Markstrom and more in today’s NHL morning coffee headlines.
OTTAWA SUN: A second Senators player tested positive for COVID-19 and is in self-isolation. He was among 52 people on board the club’s charter flight through California during their road trip from March 6 to 12. Eight of them have been tested thus far. Both Senators are the only NHL players to test positive thus far.
LOS ANGELES TIMES: Half of the NBA and NHL coronavirus cases are linked to Staples Center, home of the Los Angeles Clippers and Kings.
NBC SPORTS BAY AREA: The San Jose Sharks report none of their players possess coronavirus symptoms or have been tested for the virus. In a statement, Sharks general manager Doug Wilson explained the club felt it was important to ensure those tests are available in the local community to those in the highest risk groups and those displaying symptoms.
LE JOURNAL DE MONTREAL: Canadiens captain Shea Weber recorded a message on behalf of the Quebec government aimed at informing English-speaking seniors in the province to practice good hygiene during this time of pandemic.
ESPN.COM: New York Islanders GM Lou Lamoriello said defenseman Johnny Boychuk will return to action when the NHL schedule resumes. Boychuk was sidelined on March 2 after receiving 90 facial stitches when he was accidentally struck by a skate blade in a game against the Canadiens.
SPORTSNET: Vancouver Canucks GM Jim Benning said goaltender Jacob Markstrom has fully recovered from his knee surgery.
TSN: NHL owners will have a conference call on Monday to discussion the league’s financial situation, including escrow.
NEW YORK POST: Larry Brooks cites a source claiming the NHLPA held a conference call Friday in which the players essentially decide to defer a decision on how to handle their upcoming escrow losses until a verdict is rendered on the season. The league informed the PA that cancellation of the season could mean losses of up to $1 billion, equating to escrow losses of up to 35 percent per player.
SPECTOR’S NOTE: That’s why the league and the players are open to all options to salvage what’s left of the season. Nevertheless, they’ll still face significant losses. A lot of hockey fans will be adversely affected by this pandemic, leaving many without jobs or reduced income once this crisis has passed. They’re not going to spend it going to NHL games, where the fan cost index averages USD 424.62 for a family of four.
CHICAGO TRIBUNE: The International Ice Hockey Federation announced the 2020 Men’s World Championships are canceled. The tournament was to be staged in Switzerland in May.
NBC SPORTS BOSTON: The Boston Bruins ownership announced a $1.5 million fund to aid part-time TD Garden employees if the Bruins remaining six homes games are postponed or cancelled.
SPECTOR’S NOTE: The Bruins faced growing criticism as the last team to unveil a plan to assist their part-time employees. The news received mixed reviews from TD Garden employees. Some were happy to hear the news, some felt ownership had to be shamed into doing something, while others are wondering when they’ll start to see the funding.
CALGARY SUN: The Calgary Flames Foundation will donate $1.15 million as part of a COVID-19 community support program.
THE HOCKEY NEWS: With their season cancelled, ECHL players have been left in the financial lurch. The minor-league Professional Hockey Players Association is starting a relief fund to help those players cover their expenses.
Latest scheduling speculation, the effect of lost revenue upon players’ salaries, no front office or coaching changes for the Blackhawks and more in today’s NHL morning coffee headlines.
COVID-19 AND THE NHL
TSN: Pierre LeBrun said NHL deputy commissioner Bill Daly maintains the league must stage a full 82-game schedule for 2020-21. However, Daly told LeBrun that wouldn’t preclude delaying the start of next season into November if the 2020 playoffs are staged in July and August.
Bob McKenzie reports International Ice Hockey Federation president Rene Fasel isn’t optimistic about staging the 2020 World Championships in Switzerland. Fasel’s still awaiting official word from the Swiss government, but McKenzie believes it’s obvious the tournament will be canceled.
The Memorial Cup, set for Kelowna from May 22-31, probably won’t be held at that time. Nevertheless, the CHL isn’t writing off the playoffs. The Kelowna Rockets have reserved ice space for June if the tournament is to be moved back a month.
NEW YORK POST: Larry Brooks reports the NHL informed the NHL Players Association that revenue losses stemming from the current schedule pause over coronavirus concerns could be a best-case low of a couple of hundred million to a worst-case $1 billion.
Escrow clawbacks under the best case would rise by four percent but would surge as much as 21 percent under the worst case. That would be added to the 14 percent already clawed back from players’ salaries this season. Under the best case, the players would receive 82 percent of the face value of their contracts for this season, or 65 percent under the worst case.
Brooks believes that’s why some players are pitching the idea of resuming the season, with the Stanley Cup playoffs held in August and September. The PA is exploring options to mitigate that increase to put before its membership. They include rolling this year’s escrow into next season, returning the refund due for 2018-19, adding the projected increase to the remaining two paychecks owed to the players this season, or deferring escrow over a period of years when the new US television deal kicks in.
SPECTOR’S NOTE: It’ll be interesting to see how responsive the league will be to whatever escrow proposal the PA puts forward. Given the unique situation, perhaps the league will be receptive. After all, they’ll still get their escrow money, it’s just that the PA wants to lessen the hit to their membership.
SPORTSNET: Eric Francis reports uncertainty over COVID-19 and its effect upon the sports world has NHL players leaning more than ever on their agents for support and guidance.
TORONTO SUN:. With leagues’ schedules paused or canceled and travel limited, Michael Traikos reports the coronavirus has affected how NHL scouts evaluate prospects. It could turn the 2020 NHL Draft into more of a crapshoot.
IN OTHER NEWS…
THE ATHLETIC: Scott Powers yesterday reported Chicago Blackhawks chairman Rocky Wirtz said there will be no changes to the front office or coaching staff following yet another disappointing season. President John McDonough, general manager Stan Bowman, and head coach Jeremy Colliton will all return.
SPECTOR’S NOTE: Some observers, like Powers’ colleague Mark Lazerus, doesn’t see any significant improvement ahead for the Blackhawks. “When the Blackhawks are ambivalent, you potentially get years of mediocrity, with no end in sight,” he wrote. I’ll have more on the Blackhawks in the Rumors section.
NHL.COM: San Jose Sharks interim coach Bob Boughner expects to return as head coach next season. Boughner took over after Peter DeBoer was fired on Dec. 11. Their record since the coaching change was 14-20-3 before the schedule was paused on March 12.