Talking NHL CBA with two agents
SI.com asked Allan Walsh and Kurt Overhardt about the possible lockout
Overhardt says it is unreasonable to expect players to make more concessions
Both agents advise their players to plan for the worst and hope for the best
A few months ago, alarming predictions sounded from many corners about the possibility of the NHL entering another lockout when its current seven-year collective bargaining agreement ends on Sept. 15. Can it really happen after the disaster of 2004-05 and with seemingly good financial growth in the game since that lost season?
With the NBA having gone though a recent lockout of its own, and players forced to accept a cut to 50 percent share of league revenues, the first thought of many in hockey was, "Well, I guess we can see how much NHL players are going to have to get next time, too."
NHL players are currently receiving 57 percent of league revenues. Based on the NBA's recent deal, logic dictates that they will be asked to take a lower amount. This is where a potential standoff could occur, as NHL players may not be in as giving a mood as they were the last time, when they lost a full season of pay and then took 24 percent rollbacks to their existing contracts when play resumed.
NHL revenues have increased since 2005, partially because of the players' givebacks and other things such as a better television deal, a stronger Canadian dollar and still-strong overall attendance.
Negotiations between the NHL and the NHL Players Association have yet to take place, though Commissioner Gary Bettman said Thursday in Las Vegas that the league is ready to meet "any time" with the NHLPA to get things started. New NHLPA boss Don Fehr, however, is still doing his due diligence on all matters concerning his membership. It figures to be a battle of the titans when Fehr and Bettman finally start talking across the table. Too bad cameras won't be invited.
SI.com asked two high-powered NHL player agents -- Los Angeles-based Allan Walsh of Octagon Hockey and Denver-based Kurt Overhardt of KO Sport Inc. -- to give us a snapshot of the current mood from their side, and an idea of what the future might hold. Walsh's many clients include Marc-Andre Fleury, Patrik Elias, Martin Havlat and Milan Michalek, while Ryan Kesler, Brian Elliott, Kevin Bieksa, Brandon Dubinsky and Matt Carle are among Overhardt's.
SI.com: Is this whole thing just going to be a fight over the revenue slice that the players get?
WALSH: I assume there's a whole host of issues both sides want to address in the upcoming CBA negotiations. Keep in mind, while agents have a professional interest in the outcome of negotiations, they are not a party to these discussions. Pursuant to U.S. Labor Law, the NHLPA is the recognized bargaining unit on behalf of the players. And the agents' right to conduct contract negotiations on behalf of players are rights granted to us by the players association. So, what are the key issues? While the one getting the most attention now relates to each side's share of the revenue pie, is that all there is to it? I think the issues are more complex than that simplistic analysis. At the same time, the two sides haven't formally met yet, so we don't even know what the key issues are and what priority each side attaches to them.
OVERHARDT: In 2004, the owners received an enormous transfer of wealth through the new multiple cap system. While it is likely the league will attempt to lower the players' share and capture more revenues, I would not expect the players to accept any such reduction. I do not speak for the NHLPA, but I know from several conversations that the players view it as an unreasonable request in light of all the substantive economic concessions the league received in 2005.
SI.com: If there is another lockout, can either of you imagine another whole season being wiped out?
WALSH: We have no present data to support any kind of analysis on a potential lockout and how long it could last. Right now, that kind of talk is just background noise as far as I'm concerned. I believe Don Fehr said with respect to CBA negotiations, "You hope for the best and prepare for the worst." I've taken that advice to heart.
OVERHARDT: This question really needs to be posed to Gary Bettman. The league shut down in 2004 by locking out the players and received major concessions. It seems that now in 2012 it should be pretty hard to justify further concessions.
SI.com: What are you guys telling your clients right now? To hoard their money? To start looking at teams to play for overseas in the event of a work stoppage?
WALSH: We have always preached fiscal responsibility to our clients regardless of the CBA cycle. I think (as I said before) players must be prepared for the worst, and from a financial standpoint our clients are well positioned. As for placing guys in Europe, if we are in the throes of a lockout, it's certainly an option to consider. I can tell you it's not something that we are looking at right now.
OVERHARDT: Preparation wins in whatever we do in our lives. Our message to our clients is they must prepare for the worst. I know that thanks to the leadership of Don Fehr, as well as having hundreds of current players experience the 2004-05 lockout, the players are more prepared than ever to deal with the upcoming CBA negotiations. The goal from their side will be to reach a fair agreement.
SI.com: The NHL has a much better TV contract (10 years, $1.9 billion) now and revenues allegedly rose again this year. But, in your opinion, are things really better financially in the sport?
WALSH: We know league-wide revenues are up. We know about the broadcast deals in the U.S., Canada and Europe and the success of the NHL's online strategies. Merchandising and licensing revenue has increased. Certainly, the revenue pie has increased substantially over the last six years. Beyond that, your question is best directed at someone who speaks for the league.
OVERHARDT: NHL revenues continue to grow thanks to everyone's efforts. The league has said on countless occasions that revenues, attendance and TV ratings have never been better. Based on that info, it would be tough to justify locking out the players again. The facts and increased revenues speak for themselves. Once again, Gary Bettman should answer this question. The growth in revenues has benefited both sides and a lockout by the league would simply be for the owners to capture more revenue and scale back expenses. That would be a hard message to sell our fans. It is clear that the last lockout was about transferring money from the players to the owners. The fans should certainly understand that they didn't see a reduction in beer prices and ticket prices the last number of years following the lockout.
SI.com: If you could devise the perfect next CBA, what would it look like?
WALSH: The perfect CBA? I don't know if there's ever been a perfect agreement in any sport. It's a negotiation and, by definition, there's an expected give and take on issues. More than that, I don't want to overstep my authority. I guess if I looked at the Collective Bargaining Agreements in the other major sports, baseball's system would be the one that works well and it is a sport that has many similarities to hockey -- draft age, minor league system, salary arbitration and free agency. You have no salary cap, no salary floor and meaningful revenue sharing. While the big markets may have a perceived competitive advantage, it doesn't always play out as expected, and this is even more true in hockey. Moreover, the small markets, if we can believe the media, make a profit. To me, baseball's system works and that's probably one of the reasons it has experienced 16 consecutive years of labor peace.
OVERHARDT: If the league wants an agreement with the players via a cap system where revenues are allocated, then it only seems appropriate that the owners have a partnership among each other where they have material revenue-sharing during the regular season. It seems counterintuitive to take money from successful playoff teams and give it to other less successful teams. If there are revenue disparities between owners, they should share more revenues as opposed to looking for players to simply play for less compensation.
I believe in open market systems and the benefit and value of such systems to all parties involved. If a team can afford to spend $75 million in player costs, why not allow it? If another team only wants to spend $40 million, so be it. Sports are competitive on and off the field.