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NHL's Lockout-Ending CBA Not Radically Different

Ann Frazier |
January 9, 2013 | 7:44 p.m. PST

Staff Writer

Hockey is back, but did commissioner Gary Bettman do enough to sustain league success? (captcanuk/Wikimedia Commons)
Hockey is back, but did commissioner Gary Bettman do enough to sustain league success? (captcanuk/Wikimedia Commons)
It took 113 days, two separate federal mediators, and a marathon 16-hour negotiating session but at long last the NHL’s latest lockout is over.

The new Collective Bargaining Agreement, which still needs to be ratified by the NHLPA, has several changes that have been hotly contested and debated by the two sides the last four months.

The new CBA adds much more stringent contract limitations than the old one. In an effort to prevent the 10+ year front-loaded deals that were thinly veiled attempts at cap circumvention, new contracts are limited to eight years for re-signing players and seven years for players switching teams. Salary under contracts are allowed only a 35% variance from year to year, and the salary can never dip below 50% of the salary for the highest paid year. The term and salary limitations are clearly aimed to prevent back-diving contracts with $1 million cap-lowering years tacked on at the end.

Teams that currently have players with those cap-circumventing contracts will be punished under the new Luongo Rule, which penalize teams if those players retire before their contract is up. CBC’s Elliotte Friedman goes more in-depth on the Luongo Rule.

The Luongo Rule will have two long-term effects: either teams will prevent those players from retiring, or in ten years there will be a rash of declining players put on long term injured reserve, a place of limbo where players aren’t retired but do not count against the cap.

Another method of circumvention, burying large contracts in the minor leagues, will have those contracts continue to count against the NHL’s team cap.

Among other rule changes, general mangers can now trade up to 50% of salary and cap space much like in Major League Baseball. There is an unrestricted free agent (UFA) interview period between the draft and the start of free agency on July 1, and any non-playoff team has the ability to get the first overall pick in the draft lottery. The NHL and the NHL Player's Association (NHLPA) will split hockey related revenue 50-50, decreasing the NHLPA’s share from 57%.

The most acrimonious issue, and the only issue the NHLPA clearly won, was the player pension. Players are now allowed to put money in their own pensions, and the NHL is responsible whenever there are any losses in the fund.

As part of the transition to the new CBA, teams are allowed two compliance buyouts they can use in the next two years in order to get under the cap or avoid the Luongo Rule penalty. Teams are not allowed to re-sign players they buy out. Teams will also be able to spend up to $70.2 million this season before going down to $64.3M for the 2013-14 season.

The new rules, especially the UFA negotiating period and the ability to trade salary cap hits, will increase the number of trades and will finally justify TSN’s all-day trade deadline coverage. Shorter player deals will also likely increase player movement.

This CBA, though instituting several impactful changes to the NHL, is not making the NHL radically different like the last CBA did when it was ratified in 2005. There was no institution of a luxury tax or a complete overhaul of the revenue sharing system. There were no changes to free agency or the draft process. And yet, the NHL lost half of a season, bringing the total to two full seasons lost under NHL Comissioner Gary Bettman’s reign as NHL commissioner.

This lockout was completely unnecessary. It was inevitable, especially after the NHL came into the negotiations with 5-year contract limits and 43% of hockey related revenue for the NHLPA, but it was unnecessary. Many of the issues that weren’t resolved until the final negotiating session saw the two sides not far apart at all; it was a question of 7 or 8 years, or 30% or 35% variance. The final month of the lockout was essentially Gary Bettman and NHLPA executive director Donald Fehr being stubborn.

The worst part is that this new CBA, the one that caused a lockout, failed to actually solve any of the major problems. There’s still the major issue of smaller market teams that can barely reach the current salary cap floor without losing millions of dollars and large market teams that push for a 5% salary cap escalator without increasing revenue sharing.

Over the next decade, while this CBA is in place, there will be more player movement and no more cap-circumventing deals, but there will also be more franchise movement as smaller markets won’t be able to keep up with the increasing salary cap and be forced to relocate. A team in Seattle and/or Quebec City is very likely within the next few years under this CBA, and not from expansion.

In 2005, after the NHL came back from a season-canceling lockout, they painted “Thank you fans” on the ice. That is not going to cut it this time. Not even close.

Reach Staff Writer Ann Frazier via email or follow her on Twitter.



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