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Sorry Folks, It's the size of the Grand Canyon at this Point...


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From IrishBlues blog on Hockeybuzz...

Not all is even as close as the best optimist wants to believe...

They really are speaking different languages

Posted 3:53 PM ET | Comments 0

Last night, I was pointed to a blog entry from Michael Russo at the Minneapolis Star-Tribune. In that posting, Russo states that he has copies of exhibits put forward by the NHL in discussions with the NHLPA illustrating the gap that really exists between both sides.

Based on the exhibits Russo shows, the NHL and NHLPA are anywhere from $900 million to $1.05 billion apart over 5 years. The true difference relies on assumptions in growth rates, the "make whole" provision the NHL originally suggested, and the NHLPA's insistence on being guaranteed a 1.75% increase per year from the $1.883 billion the players received in 2011-12. The difference is based on what the players want to receive and what they would receive under the NHL's 50/50 proposal, including "make whole."

-- The short version: both sides are much farther apart than much of the media has alleged.

-- The short version, part 2: as I said previously, both sides really need to go back to the beginning and start all over.

The fact that the NHLPA is asking for increases off the '11-12 amount the players received is questionable enough; the NHL's insistence on an immediate 50/50 split point only underscores the cavernous gap between the two sides. There's simply no way to reconcile both of those positions. Even if the NHLPA were to say "look, we'll take $1.883B in 2012-13 and there forward until revenues catch up" they would still receive a raise in 2015-16 ... if revenues actually grow as projected.

What is that projection? It's roughly a 1.25% increase between 2011-12 and 2013-14; that can be anything from -10.0% in '12-13 and +13.9% in '13-14 to -17.5% in '12-13 and +24.2% in '13-14. Thereafter, the league assumes a 5% per year growth rate.

Is that realistic? Probably not in the first 2 years, given the damage incurred so far. If '12-13 is lost, it's unlikely we see revenues go back to even $3.303 billion in the 2nd year of games (whenever that happens to be), much less be higher. The more revenues don't recover, the wider the gap between the two sides. Where this really becomes apparent is the percentage reduction that would be needed to get from wherever player salaries stood in '13-14 to a 50/50 split in '14-15; under the NHL's exhibits, it's a roughly 8.8% decrease - but if revenues don't recover, the reduction needed becomes even more harsh.

Is it possible the NHL is spinning a story here? Maybe. Certainly we've seen the NHL engage in the semi-covert PR war by putting out positions designed to push its side through carefully placed leaks. If I knew that the NHLPA wasn't asking for increases from the '12-13 salary base, it would be one thing - but Fehr has been pretty clear the players (a) should be paid in full for the contracts on the books for '12-13, and (b) shouldn't have to take a pay cut in any future year in getting to 50/50.

However, math just is. You may not like the fact that 4 + 3 = 7, and you may argue how important that result is, but you can't add "4" and "3" together get some other result. If both sides are truly that far apart, I still don't see how both sides possibly bridge the gap that exists. The exhibits that Russo provided only reinforce that belief.

It's time to throw in the towel on this round of negotiations. Both sides really need to start over.

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