- How optimistic are you about having a season?
Luther Xue (SB Nation Dallas): Very little optimism. It's been a month since the lockout was put in place and negotiations haven't progressed an inch. Both sides are still arguing over the exact same problems and they aren't even close to reaching a compromise. It looks certain that the lockout will at least reach the New Year and I'd say 75% sure the whole season is done.
The NHL and NHLPA have met a few times in the past couple of weeks, but rarely, if ever, discussed the issues. They've actually had more meetings to determine when the next meeting will be than actual negotiations.
Brandon Worley (Defending Big D): Two weeks ago I would have said I was fairly optimistic that the NHL and NHLPA would come to an agreement, at the very least, in time for the season to start around the holidays. I felt that the Winter Classic was too valuable an asset for either side to lose, that the players would not be willing to take an entire season without a paycheck and that enough owners in the league would suffer without a season that at some point, a deal would be reached.
The past two weeks, however, both sides have dug into their trenches. Teams are telling their AHL players to secure housing for the length of the season and NHL players are settling into new teams in Europe. There have not been any signs of significant movement from either side and right now it seems to be more about pride and "winning" than it is about doing what is best for the league and moving forward.
- What's the biggest point of contention at this point in negotiations?
Xue: As with all these labor disputes, it's about money money money. Owners are really worried about the amount of cash the players are making and they want to put a little more back into their own pockets. They want a significantly larger portion of revenue sharing (at worst a 50-50 share), a stricter salary cap and a limit on the length of contracts.
There are a bunch of other smaller issues but those are the big ones that no one can agree on.
Worley: Besides the fact that neither side is willing to actually negotiate, the key issues come down to just how much of a percentage the players get of Hockey Related Revenue. Currently, the players enjoy a 56 percent share of HRR, a figure that is estimated before the start of the season and by which the salary cap is determined for that season. Prior to the 2004-05 lockout the players had something around a 76 percent share, with the league knocking that down significantly with the "old" CBA.
At issue now is not whether the players will take a lesser percentage but how quickly the players share reduces to around a 50-50 share overall. The league is asking for an immediate cut to around 46 percent (a figure they'd probably bump to 48 or 49) while saying that the cut won't come from the actual contracts, but through escrow withholdings. The players, meanwhile, feel that a gradual reduction in that percentage is what is most fair for the players and best for the league.
The major issue, however, has to do with revenue sharing between franchises. This is something the NHLPA has been harping on, saying that "we'll help the league only if the league accepts a chunk of the burden as well." It's this issue that has public opinion on the side of the players; how can the league ask the players to take the full brunt of the financial hardships if the teams aren't even willing to help themselves?
- How is the NHL losing money after seven-straight years of revenue growth?
Xue: To be blunt about this, they aren't. There are teams here and there that are losing money but the NHL as a whole has been making a profit (a revenue of $3.3 billion last season).
It's just that there are some teams losing money and a majority of the owners want more than what they are currently making. There are a few power teams and influential owners out there that are really controlling how the negotiations are going.
Worley: Simple economics. Revenue does not equal profit if the costs outweigh the revenue. The NHL's opinion is that costs must be cut because even with revenues at an all-time high, the overall costs (the biggest of which is player salaries) are at a level that is not sustainable for the near or long-term future.
The problem is tied to how the league is set up. Player salaries (and thus the salary cap and salary floor) are tied directly to league-wide hockey revenue. The NHL has had about ⅓ of the league making an incredible amount of money the past seven years, eight or nine teams whose overall revenues are driving NHL revenue numbers through the roof. Along with those rising revenues comes the rising player salaries, which in turn drives the rise of the cap floor.
While teams like Boston and Pittsburgh have flourished the past few years, teams in Florida, Dallas and elsewhere have struggled to keep up with the rise of the cap floor. Their costs are far outweighing their revenues and teams in the "bottom" of the league are likely bleeding money. When you combine it all together, it's not too hard to imagine that the NHL can easily make it look as though the league overall is losing money -- and the players must be responsible in getting costs low once more.
- How much leverage does playing in Europe give the players?
Worley: It gives the players the only leverage they can possibly hope to have. The problem with this notion is that only a fraction of players are successfully finding jobs in Europe or in the KHL; only four Dallas Stars players have signed on to play overseas at this point. The truth is that most players in the NHL desperately need their paychecks and while the NHLPA has been preparing the players for lost checks once the lockout is fully underway, you wonder just much resolve will exist when two-thirds of the players start to feel the financial burden that those making $5 million or more a year don't.
Xue: Not much really. Many of these guys are signing contracts with out clauses whenever the NHL returns or signing short term deals (Stephane Robidas signed a one-month contract recently). These are just deals so the guys can stay in playing shape and get some games under their belt in the hopes that the season will come back.
There have been a few (notable) Russian players that have said they will stay in Russia even if the NHL comes back, but no one believes that talk.
- How has the specter of 2004-2005 affected negotiations this time around?
Xue: There was one conclusion that came after the 2004-2005 lockout; the players gave up a lot of their power to appease the owners. They took less money, a salary cap was put in place and the players mostly just gave in so they could play hockey again.
It's not even 10 years later and the players have once again been put into that position where they have to give up a lot again and this time they're dead set against it. As far as the issues go, they've had a big effect on the negotiations.
The lockout last time though, has had no effect on how badly (and quickly) the NHL wants to get the league back up and running again. There's been no urgency in getting a deal done. The fans came back after the last lockout and the NHL is certain they'll be back again so there's no hurry.
Worley: It's interesting to look the differences between then and now, especially in how the league has approached the lockout publicly. In 2004-05 the fans were informed of how good for the league the lockout would be, how ticket prices would go down and how changes made to the game (the shootout, for instance) would make NHL hockey that much more exciting once things were figured out. Even with the lost season there was an incredible amount of anticipation for the start of the next season, especially given how much more exciting the league was supposed to be under the new rules.
This time around, it's much different. The league isn't even trying to hide the fact that the lockout is purely in the interests of the owners and their profits, stating that the league cannot sustain the current business model and offering little explanation beyond that statement.
On the players side, a broken union has been repaired with the players united under Donald Fehr. Last time the players broke down and accepted the offer the league put on the table, just to get back to playing hockey again. Don't expect the same such concessions this time around.
- If the NBA had missed the entire 2012 season, LeBron James would not have been able to quiet his critics and win his first NBA title. What NHL teams and players would be most affected by a lost 2013 season?
Worley: The Los Angeles Kings, for one. They just won the Stanley Cup and even during that playoff run, getting attention in that town was tough to begin with. Now they've won the championship but hockey isn't being played; those casual fans that started to take note of the Kings once more around L.A. have already forgotten they exist.
Every single team in the NHL that doesn't play in Toronto, Boston, New York, Montreal, Philadelphia, Chicago, Pittsburgh or Detroit is likely suffering from this lockout in one way or another. You have to feel that a team like the Dallas Stars, eager to repair relations with fans under a new ownership group, are one of the teams that hates this lockout more than any other.
Xue: It's a little different for the NHL than the NBA. It isn't really about a player's legacy here, it's more about the health of the NHL and a few specific teams.
The Phoenix Coyotes have been in the relocation rumors repeatedly over the last five seasons due to ownership troubles and a struggling fanbase. They're one of the teams that really needs extra cash to keep the team afloat. They reached the Western Conference Finals last season and finally had some solid attendance numbers near the end of the season.
They've had a tough time keeping attendance and a lost season will do no favors in that department. All that momentum is lost now that the season is lost and I think makes it more likely that the Coyotes will have to move.
You could say a bunch of that for the Dallas Stars as well. While they aren't in the relocation talks, they have been a team that has struggled more than others to make money and keep a good attendance (mostly due to the Tom Hicks situation).
The Stars finally got themselves a new owner and were starting to get themselves back into the minds of the metroplex. Casual fans were getting back and there was an actual excitement about the team heading into this season. With the Rangers gone, the Cowboys in their usual mediocrity and no Mavs yet; this would've been the perfect time for some Stars hockey. That's all been shot to hell now.
Fans are pissed that this the second lockout in the past eight years and there's been a large vocal group of fans that say they're done watching. Whether that happens is doubtful, but how many fans (or casual fans) would stick with the league whenever it comes back?
- What would be the long-term effects of a second lost season?
Worley: The NHL discovered in 2004-05 that fans will flock back in record numbers after a lockout and they feel this will be the case once again, explicitly stating this fact again and again while discussing the greatest sports fans on the planet. The reality, I fear, is much worse than they anticipated.
Seven years ago the fans were told that the lockout was needed for the good of the game and that the fans would benefit with a faster, more exciting game with lowered ticket prices. The "faster" game lasted only as long as it took coaching to adjust and ticket prices have actually skyrocketed across the board as the league has grown.
The fans are taking this lockout personally and I don't blame them. This is the second time in less than a decade that an entire season could be lost, a fact that is astounding when you consider the actual popularity of the league in North America.
Xue: I think first and foremost, Gary Bettman will be out as commissioner. He's public enemy number one to the fans and persona non grata among the players. I saw a player's poll recently (while it was just 40 players) and they were 100% in favor of getting rid of him.
The lockout is also going to affect the draft and subsequently the future of good number of teams. The last lockout led to the Pittsburgh Penguins winning the rights to the first pick in a 30 team lottery and they got Sidney Crosby as a result.
I would be really worried about what happens to the Phoenix Coyotes as well. They've been *this close* to moving already.
We thought the league would be okay after the last labor dispute but here we are again. If the season is lost once again, I think this time around they'll actually be able to get a deal that lasts.