The Orange Update

NHL Presents New CBA Proposal

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After 2 weeks of silence the NHL woke from a deep sleep and presented the players union with a new collective bargaining proposal.

The lockout that has now lasted 104 days is reaching the point of no return. A deal has to be completed on around January 10th or the season will be axed.

Earlier this month NHL deputy commissioner Bill Daly said 5 year contract lengths was the “hill we will die on” but that changed in the new proposal which includes 6 year contract length (7 years if a team resigns one of their own). Variance has gone from 5% to 10%. The $300 million in “make whole” remains on the table after league commissioner Gary Bettman angrily took it off the table when negotiations broke down about three weeks ago.

Bill Daly released the following statement today:

“In light of media reports this morning, I can confirm that we delivered to the Union a new, comprehensive proposal for a successor CBA late yesterday afternoon. We are not prepared to discuss the details of our proposal at this time. We are hopeful that once the Union’s staff and negotiating committee have had an opportunity to thoroughly review and consider our new proposal, they will share it with the players. We want to be back on the ice as soon as possible.”

No face to face meetings have been scheduled but the NHLPA is having a conference call around 3pm to discuss the new developments. Reports floating around have stated the players union is already working on a counter- offer.

The term of the CBA in the leagues proposal is 10 years with a mutual opt out after 8 years.

 

ESPN’s Pierre LeBrun provided this list of “highlights” from the proposal obtained from an NHL team source:

• Ten-Year Agreement (through 2021/22 season); Parties have mutual opt-out right
after 8 years.

• 50-50 Revenue Split between Clubs and Players with current HRR Accounting.

• $300 million in “Make-Whole” payments (outside the system) to compensate Players
for the reduced value of Player contracts in the early years of the new CBA.

• No contractual “roll backs” of Player Salaries.

• Clubs can operate with an effective Upper Limit of $70.2 million in 2012/13; must
come into compliance with $60 million Upper Limit for the start of the 2013/14
season.

• Each Club will be entitled to execute up to one “Compliance Buy-Out” prior to the
2013/14 season pursuant to which payments made to the Player will not be charged
against the team’s Cap, but will be charged against the Players’ Share.

• Establishment of a Defined Benefit Pension Plan that will provide maximum
permissible benefits to Players upon retirement. The Plan will be funded with
contributions out of Players’ Share and $50 million of the “Make-Whole” payment
amount of $300 million will be allocated and set aside to fund potential underfunding
liabilities of the Plan at end of CBA.

• Rules for Entry Level System, Salary Arbitration and Group 3 Unrestricted Free
Agency will remain unchanged.

• Maximum contract length of 6 years subject to a Club’s ability to re-sign its own
Player for a term of up to 7 years (provided the Player played his last full season
with the re-signing Club). In addition, year-to-year Salary variability will be limited
(up or down) to no more than 10% of the value of the first year of a multi-year SPC.

• Money paid (above a defined threshold) to Players on NHL SPCs in another
professional league (e.g., the AHL or a European league) will be charged against the
NHL team’s Cap, but not against the Players’ Share.

• “Cap Advantage Recapture” formula applicable to existing long-term contracts (in
excess of 6 years) for years in which Player is retired or fails/refuses to perform
under his NHL SPC.

• Ability for Clubs to retain/allocate Salary and Cap Charges in the context of Player
Trades within specified parameters.

• More robust League-wide Revenue Sharing Program (increased pool from
approximately $150 million to $200 million) with creation of Industry Growth Fund to
improve the long-term revenue generating potential of the League and low-grossing
Clubs. Formation of active Revenue Sharing Oversight Committee on which NHLPA
will participate.

• New Player Discipline procedures and protocol incorporating Player appeal rights to
a neutral third-party arbitrator for both on-ice and off-ice discipline.

• Flexibility-related adjustments to Payroll Range System, including (in addition to
Salary/Cap Charge allocation in Player trades):

        1. Lower Limit obligation without performance bonuses;
        2. Elimination of Re-Entry Waivers;
        3. Creation of Salary Cap exceptions for emergency roster situations/goaltender

 

      injuries;
      4. Waiver exemptions for mid-season signings of Club’s own European Players;
      5. Availability of Performance Bonus Cushion in every year of the CBA;
      6. Creation of “interview period” for Unrestricted Free Agents.

• Various Player contract enhancements and protections, including:

        1. Early activation of “No Move/No Trade” clauses in contract extensions;
        2. Additional restrictions on Club “buy-out” rights of Player contracts;
        3. Modified Waiver obligations for Clubs / enhanced Waiver opportunities for

 

        Players;
        4. Standardization of reimbursements and benefits related to Player

 

        assignments (trades, loans, recalls, etc.);
        5. Continued increases in League Minimum Salary and Per Diem;
        6. Playoff Pool increased from $6.5 million to $13 million in Year 1; additional

 

        regular increases over the balance of the CBA term;
        7. All minor league salary paid in USD;
        8. Liberalized “Cap treatment” standards for Club initiatives benefitting Players,

 

        such as “parent-son” road trips; milestone awards/gifts; parental travel and

 

        lodging for attendance at EL Player games, Club provision of various types of

 

      “professional development”-type services for Players, etc.

• Player “Working Condition” improvements, including:

        1. Ice-time restrictions and mandatory “days off” requirements during Training

 

        Camp;
        2. Club practice schedule and “days off” requirements during the Regular

 

        Season;
        3. Extended “Christmas Break” (i.e., December 24-26 “days off” for all

 

        purposes);
        4. Mandatory facility standards for Visiting Teams relating to training/medical

 

        supplies, workout equipment and dressing room standards/supplies;
        5. Implementation of “best practices” and continued League initiatives to ensure

 

        optimal ice conditions;
        6. Tighter restrictions/regulation of Club off-season conditioning requirements

 

        and Club Conditioning Camp;
        7. Establishment of annual Orientation and Development Program for

 

      Rookies/First Year Players.

• New CBA Article devoted exclusively to Player Health and Safety measures and
covering such matters as:

        1. The establishment of a Joint NHL/NHLPA Health and Safety Committee with

 

        equal representation from the NHL and the NHLPA;
        2. The establishment of “Standard of Care” and “Professional Duty” obligations

 

        owing from team health care professionals to Players;
        3. The establishment of minimum requirements for “health management” staffing

 

        and resources;
        4. The establishment of standards for the creation, updating and maintenance of

 

        Electronic Medical Records for Players;
        5. Improvements to Second Medical Opinion procedures and protocol and

 

        Fitness to Play determinations;
        6. Implementation of additional steps and safeguards to monitor the use (and

 

      possible misuse) of prescription medication by Players.
      7. Increased flexibility for Players for rehabilitation of injuries during the offseason.

• Elimination of NHLPA “Guarantee” of Escrow shortfall and increased NHLPA
discretion to determine in-season Escrow Rates.

• Completion of expert third-party review of SABH Program and commitment to make
recommended modifications and improvements, as appropriate.

• Improvements to existing Performance Enhancing Substances Program, including:

        1. Expansion of Prohibited Substances List to include illegal stimulants;
        2. The establishment of testing protocol for HGH;
        3. Varied forms and times of testing throughout the year;
        4. The establishment of protocol for “reasonable cause testing”;
        5. Incorporation of agreed-upon appeal procedures from “positive” test results;
        6. Commitment to work with the AHL and the PHPA to expand Program to cover

 

      AHL Players.

• Joint (NHL/NHLPA) Committees:

        1. Formation of new “Owner-Player Relations Committee,” with broad-based

 

        participation from Owners and Players intended to foster and establish better

 

        understanding and stronger working relationships.
        2. Formation of new “Revenue Sharing Oversight Committee” to oversee the

 

        operation of the Revenue Sharing System.
        3. Formation of new “Joint Health and Safety Committee” to make

 

        recommendations to the NHL and the NHLPA on Player Health and Safety

 

        matters.
        4. Formation of new “NHL/NHLPA Equipment Working Group” to study,

 

        promulgate and enforce minimum standards for protective equipment utilized

 

        by NHL Players.
        5. Refined and enhanced role for “Player/Club Competition Committee” (CBA

 

        Article 22) with greater consultation and interaction with the NHL General

 

        Managers’ Committee.
        6. The “NHL/NHLPA Joint Owner-Player Broadcasting/Marketing Committee”

 

        (CBA Article 32) will be reconstituted to consult and establish policy on

 

        League broadcasting and marketing matters, as well as other League

 

        business functions and initiatives.
        7. The NHL/NHLPA International Committee (CBA Article 24) will be charged

 

        with jointly identifying, creating, exploiting and managing new international

 

        business opportunities involving NHL Players, in which the NHL and NHLPA

 

        will participate as 50-50 partners. The NHL/NHLPA International Committee

 

        shall also have an advisory role in planning and executing NHL events

 

      conducted outside of North America.

• Players provided access to NHL.com platform for their individual Player websites
and social media.

• Implementation of a weighted Draft Lottery in which all non-Playoff teams compete
for opportunity to choose first overall in the annual Draft.

• Exclusive negotiating rights window for European Draftees extended to one period
covering four years, instead of two periods covering two years each.

• Modification to “Four-Recall Rule” to remove limitation on “number of transactions”
following the Trade Deadline; replace with limitations on the total number of Recalls
on roster at any one time after the Trade Deadline.

• Updated and improved Grievance Arbitration process and procedure.

• Enhanced access to Game Tickets for Visiting Team Players and NHLPA.

• NHLPA representatives to be provided reasonable access to Club facilities and
Players at reasonable times.

 

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