2012-13 Lockout Discussion Part IV (UPDATE: "The Union took a step backward")
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10-16-2012, 01:19 PM
Join Date: Dec 2003
Location: Victoria, BC
Originally Posted by
However with an immediate 50% split the players would be collecting their current contracts (based on 57%) all year and then have to give back 7% at the end via escrow. So essentially a cut but not a true "rollback".
Yeah, re-reading Bob McKenzie's
, it looks like I was a bit misinformed there.
One clarification I think needs to be made is on the use of the word "rollback."
I talked to a couple of agents who have been in conversation with their players and the agents had to explain that a "rollback" a la 2004 has not been proposed in these negotiations. The 2004-05 rollback was an across-the-board, flat-rate 24 per cent reduction in the value of every year of every existing contract.
Now, based on the NHL proposal(s) to the players, reducing the players' share of revenue to below 50 per cent will result in the players having to take a projected "pay cut" of 12 or 15 or 17 per cent -- pick your number -- but that "pay cut" is not the same as a "rollback" to the extent that it wouldn't definitively apply to every year of every contract.
Would the first year of a new CBA see the players' contracts devalued? Yes, almost assuredly. In a system where players' salaries are linked to a percentage of revenue, if that percentage is significantly reduced from 57 per cent to 50 or less, there has to be a double-digit pay cut in in that first year. But if the industry continues to be in growth mode, further devaluations are far less likely.
And, to a very large degree, for many of the players, that concept of taking less than 100 per cent of their 20102-13 salary is the emotional flashpoint of this entire lockout. That, in my opinion, is the single biggest reason for NHLPA solidarity.
The players, especially those who signed big contracts in the summer, think it's immoral that the owners who willingly and eagerly signed these deals could escape by paying less than full value.
Although, it must be duly noted, that in the old CBA that linked salaries to revenue, no contract was ever guaranteed for 100 per cent of its value. That value fluctuates from year to year, based on a number of market factors: increases or decreases in revenue; increases or decreases in the players' share of revenue; over spending or under spending on salaries by the owners.
That's why three years ago, for example, every player's contract was devalued by 12.88 per cent and six years ago, the value of every player's contract was actually increased by 4.64 per cent.
Nevertheless, the notion of, before the season even begins, knowingly taking a double-digit haircut is not something any player is prepared to consider. It's a total non-starter and the biggest reason we're as paralyzed as we are right now.
But it's technically not a "rollback" and much more likely to be a factor in the first year of a new CBA than subsequent years, although there are never any ironclad guarantees in a "linkage" system.
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