NHL lockout timeline: comparing 2004-05 to 2012-13
The harsh rhetoric of 2004-05 is absent, but the philosophical differences remain
The escrow system born during the last lockout will ironically help players this time
Unlike 2004-05, there may be TV money ramifications for the owners in the future
As the calendar nears the Sept, 15 expiration of the NHL's Collective Bargaining Agreement, it's starting to look, sound and feel a lot like the dark fall of 2004. Despite record revenues ($3.3 billion, a 33 percent increase from 2005-06), a 10-year TV deal worth approximately $2 billion with the NBC Network for U.S. broadcasts, money-printing innovations such as the Winter Classic and its HBO 24/7 lead-in series, and all the "cost certainties" that team owners got after the last lockout, here we are again talking about another delayed or completely lost season.
The "partnership" with the players that Commissioner Gary Bettman once trumpeted as working "for everybody...most importantly for our fans" now needs change. Player costs are too high, he said on behalf of the owners whose initial CBA offer was tone-deaf at best and Draconian at worst: a cut in the players' share of Hockey Related Revenue from 57 percent to 46 (43 according to the NHLPA after new HRRs are re-tabulated), five-year contract limits, the elimination of arbitration, and expanded benchmarks for attaining unrestricted free agency. Oh, and $1 billion in unmarked bills and a plane to Mexico.
That last part is a joke, but nobody connected to the game is laughing much these days. New NHLPA boss Donald Fehr issued an "alternate proposal" that offered to accept a pay cut for three years, maintain the current salary cap, and expand revenue sharing among teams without any changes in contract term rules, but it was shot down a day later by Bettman. With time running out, both sides remain about $1.3 billion apart on the numbers and their philosophy about to how to divvy up the pie. So it's just like 2004 all over again, right?
Let's take a look at the timeline of the last lockout and compare.
GALLERY: Revisiting the 2004-05 NHL lockout
CBA negotiations had begun in October 2003, but by the following August, the two sides had met only four times. Among the issues were higher player fines, the schedule, playoff bonuses, free agency, salary arbitration, and revenue sharing. The owners were demanding a $35 million salary cap and "cost certainty" that gave players a 50 percent share of league revenue. In February, the NHL had unveiled a controversial report by former U.S. Securities and Exchange Commissioner Arthur Levitt, who'd been hired by the league. Called a "super-audit" it declared that players were receiving 76 percent of the league's $1.9 billion revenue while owners had lost $273 million during the 2002-03 season. (NHL revenue wasn't as well tabulated as it is today, but it was probably still over a $1 billion. Meanwhile, the average salary of $730,000 in 1994-95, the year of the previous lockout, had risen to $1.8 million by 2003-04.)
NHLPA boss Bob Goodenow disputed Levitt's findings, issuing a report of his own that claimed $100 million of unreported hockey revenue had been uncovered by the NHLPA's examination of the books kept by four teams. The players offered a five-percent rollback in salaries, a return to 1995 entry-level contracts, and a luxury tax on payrolls topping $50 million to be shared among all teams. Bettman vowed the owners would wait as long as necessary to get what they wanted. Goodenow, who had been warning players to prepare for a lockout that could last as long as two full seasons, said they would not agree to a hard or soft cap. "Bottom line, if they want a hard cap, we'll sit out the rest of our lives," Maple Leafs union rep Bryan McCabe told The Toronto Star.
THEN vs. NOW: Fehr has offered to keep playing beyond the CBA's expiration date, but Bettman insists a lockout will begin that day if no agreement is reached. Though friction, frustration and disappointment seem to be increasing as talks progress, the harsh rhetoric of eight years ago has largely been absent as both sides express a desire to reach a deal. Most meetings have been characterized as cordial and businesslike -- though that could change. Abruptly cancelled bargaining talks after a meeting between Fehr and Bettman on Aug. 22 followed by a mere 90-minute session on the 23rd was cause for concern, especially when Bettman kept citing the "wide gap" between the two sides.
On Sept. 15, one day after Canada won the World Cup of Hockey, Bettman formally announced a lockout -- the second of his tenure that began in 1993. The NHL's financial model was "broken," he said. The stalemate began in earnest as the calendar turned to October. Philadelphia Flyers owner Ed Snider summed up his colleagues' animosity toward Goodenow by saying, "I might jump over the table and choke him to death. That would not be good. That's why they keep me out of the negotiations."
THEN vs. NOW: While tensions may rise between Fehr and Bettman, it seems doubtful they'll ever come close to the mutual loathing between the league and Goodenow. Also, methods for the accounting of hockey-related revenue are, while not without some controversy, now more transparent and agreeable to both sides.
It seems hard to believe, but there were no formal negotiations through October and November. By December, players were starting to grumble to Goodenow that he should at least try to get things moving. So the NHLPA made its first formal offer to the league since the summer: a dramatic 24 percent rollback in existing salaries, a 20 percent tax on team payrolls that exceed $45 million, and some concessions on rookie contracts and arbitration. In a press conference, Goodenow called them "significant, significant changes" and optimism ran high among players that a deal would get done in time to salvage part of the season. But after five days of studying the proposal, which Bettman had called "a big time move", the verdict came back: no deal. Without a hard cap of some kind, he said, a CBA couldn't be consummated although he was willing to give players a 54 percent cut of revenue. Goodenow told his ranks that once a hard cap was in place, it would never come off and the dollars would always go down from there.
THEN vs. NOW: The hard cap is now in place, of course, but the team salary ceiling for 2012-13 is set at $70.2 million -- a stark difference from $39 million in 2005-06 -- so it seems that the biggest fight will be over revenue share percentage. Just as Goodenow predicted, the owners want to reduce that magic number.
SI Now Live Friday December 20, 2013
SI Now: Olympians on Liberty Mutual, gearing up for Sochi