2012 CBA Negotiations Thread

[Kin]

Everyone knows what the numbers are with respect to the leagues finances so there's no big mystery.

I don't know to what extent that's true but I'd argue that the point, from the PA's side, isn't necessarily what the numbers are but what the numbers mean. The proposal to limit non-player expenses, to me at least, says that the PA thinks that addressing the owner's financial concerns shouldn't solely be an issue of demanding givebacks from players.

To me, that's pretty reasonable. As I said to Frank, the league can't just pretend that they don't have any responsibility for the league's bottom line. Especially not when owners buy teams, announce that they don't care if the teams make money and then sign a bunch of contracts that drive home that point.

 

[Hampreacher]

I think in light of losses like a business would you eliminate a product line that is losing money. The NHL needs to contract and or merge at least 4 or 5 teams. They have had time to sell the game and have made little headway. A lock out could be potentially damaging to league and players alike.

 

[cw]

Everyone knows what the numbers are with respect to the leagues finances so there's no big mystery.

I don't know to what extent that's true but I'd argue that the point, from the PA's side, isn't necessarily what the numbers are but what the numbers mean. The proposal to limit non-player expenses, to me at least, says that the PA thinks that addressing the owner's financial concerns shouldn't solely be an issue of demanding givebacks from players.

To me, that's pretty reasonable. As I said to Frank, the league can't just pretend that they don't have any responsibility for the league's bottom line. Especially not when owners buy teams, announce that they don't care if the teams make money and then sign a bunch of contracts that drive home that point.

The financial reporting structure for the CBA was lifted largely from Levitt's analysis. Some of the "forms" look identical to Levitt. Each line item entry on the form for revenues and expenses is backed up with a pretty well written definition with the boundaries of what can be included and what should be excluded, etc.

They did go through these definitions with a focus on what was hockey revenue and hockey expense during the last CBA negotiations. Obvious things like an owner paying a relative big bucks to do next to nothing got excluded for example.

If something fell down there, both parties bear responsibility because they mutually signed off on the CBA with those definitions.

The current CBA provided for a mutually agreed upon 3rd party auditor. Over the last six years, that auditor could investigate anything about those numbers so beyond the theoretical written definition, the NHLPA should have a crystal clear understanding of the actual practice showing what types of expenses actually hit those various expense line items within the CBA reporting.

So if the NHLPA don't know "what the numbers mean", then there's little doubt they didn't do their job for the players they represent. There are no meaningful excuses available to them there because if the league inhibited them from getting that information, we would have heard about a grievance before an arbitrator.

If the owners are booking unreasonable expenses against those line items - allowed under the definitions, I'm all for the players getting that stopped. If the owners are not being fair or reasonable with the players, I'm dead against that and have zero sympathy or patience for the owners on that issue. A good CBA deal is a fair deal for both parties and fans should want a good deal. I have not heard nor seen evidence of that happening with any great degree of substance relative to the overall financial result. I'm sure both sides probably have some issues where they could tweak the definitions under that theme of reasonable fairness.

If the players are looking for a radical restructuring to isolate to player related expenses excluding other hockey related (non-player related) expenses (whatever that means...), I'm not sure I see the point because whether the legitimate non-player hockey related expenses appear in the CBA or not, those can grow or decline at a different rate than the revenue so the owners have to take them into account when assessing the players share of the revenues - no matter what. They do affect the bottom line result. So some of this may well be just union smoke.

Some time ago, I did compare NBA (which Levitt used to some extent) and NFL definitions in their CBAs with the NHL's. There were differences but I didn't see anything stick out that was horrible.

I also haven't seen anything when I did some ratio tests that exposed the NHL's expenses being vastly out of line with the other two leagues. It was hard to be precise because there are differences between them. But I'm confident that we're not talking mega bucks proportional to the league revenues.

The fact that the NHLPA extended this deal two years also speaks to that. If this CBA wasn't a pretty fair deal for the players, they wouldn't have extended it. Since the players are getting a percentage of revenues, under the current CBA and from what I understand of the leagues latest proposal, they're exempt from any suffering if the expenses are high. The only place expenses comes in is where they debate how much money the league is making.

The fact that the NHLPA offered to accept a reduced % of revenues also speaks to the accuracy of the NHL expenses to some degree.

It's a delicate road for the NHLPA to go down because, relative to the NBA and NFL, the NHL revenues are considerably less. All leagues have some fixed costs - no matter what the revenue is. Higher revenue leagues can absorb fixed costs easier (at a lower rate per revenue dollar) than lower revenue leagues. So that helps make the simple business argument that the NHL players should be paid less than the NFL and NBA players as a percentage of revenue because the fixed costs per revenue dollar are very, very likely to be higher for the NHL. The league was likely to raise this anyway but if the NHLPA wants to go down the questionable expense road, they're guaranteeing that they'll run into that and the math is too straight forward for the NHLPA to refute it.

If the players are seeking to dictate to the owners how many sales people they can hire for example or having some say in the league expenses to that extreme, I'd promptly tell them to enjoy their lockout and cease discussions because that gets silly and unreasonable really fast. They're employees - not managers and have no management right since they don't bear the risk of investment.

So they may tweak these line item expense definitions but there's no evidence that this issue, like virtually all the other issues, is anywhere materially close to the % of revenues in terms of financial impact for the new CBA.

 

[Kin]

So if the NHLPA don't know "what the numbers mean", then there's little doubt they didn't do their job for the players they represent. There are no meaningful excuses available to them there because if the league inhibited them from getting that information, we would have heard about a grievance before an arbitrator.

That assumes that I'm referring to fraud or shadiness as opposed to simple incompetence(or, as mentioned in the case of the Sabres, a lack of interest in turning a profit), something that will cost a business money and that shouldn't be redressed through collective bargaining.

The fact that the NHLPA extended this deal two years also speaks to that. If this CBA wasn't a pretty fair deal for the players, they wouldn't have extended it.

We've gone over this before but you know that's a gross oversimplification of the collective bargaining process. The only way the PA was going to not extend the deal was under the pretense that they could get a better one, an impossibility given the state of the PA and the natural leverage that the owners will have in any negotiations.

If the players are seeking to dictate to the owners how many sales people they can hire for example or having some say in the league expenses to that extreme, I'd promptly tell them to enjoy their lockout and cease discussions because that gets silly and unreasonable really fast.

Employees, huh? Funny how that "partnership" rhetoric gets tossed out pretty quickly once the players are even vaguely interested in making it meaningful.

And regardless of how "silly" you think it is, it's going to be a sticking point here. If I were in a PA that had bargained away what the NHLPA did in 04-05 I'd be pretty insistent that whatever givebacks I agreed to in this CBA would be backed up by some sort of guarantee that the Owners wouldn't be allowed to operate their businesses poorly if they would seek to redress any and all losses they incur by seeking to reduce my salary in the next CBA. That's the risk the players are apparently responsible for and that's what they're interested in having some say in.

 

[OldTimeHockey]

I think in light of losses like a business would you eliminate a product line that is losing money. The NHL needs to contract and or merge at least 4 or 5 teams. They have had time to sell the game and have made little headway. A lock out could be potentially damaging to league and players alike.

In 2010/2011, 16 teams had operating losses. In 2011/2012, 18 teams had operating costs in the negatives.

So as much as the League has grown, it's simply been a matter of the rich getting richer.

Actually, according to Forbes, just 11 teams showed an operating profit.

http://www.forbes.com/sites/maurybrown/2012/05/30/lack-of-economic-parity-could-kill-nhl/

http://www.forbes.com/nhl-valuations/

 

[drummond]

I think in light of losses like a business would you eliminate a product line that is losing money. The NHL needs to contract and or merge at least 4 or 5 teams. They have had time to sell the game and have made little headway. A lock out could be potentially damaging to league and players alike.

In 2010/2011, 16 teams had operating losses. In 2011/2012, 18 teams had operating costs in the negatives.

So as much as the League has grown, it's simply been a matter of the rich getting richer.

Actually, according to Forbes, just 11 teams showed an operating profit.

http://www.forbes.com/sites/maurybrown/2012/05/30/lack-of-economic-parity-could-kill-nhl/

http://www.forbes.com/nhl-valuations/

Time to come back to 24 teams? or to relocate some of those teams in red numbers to better hockey markets (Seattle, Milwaukee, Hamilton, Quebec City, Cleveland - which would also reduce travel cost)?

 

[OldTimeHockey]

What drives me crazy is Bettman strutting around for the past 5 years telling us how much the NHL has grown financially and of course that was all because of him....yet now he's getting ready to shut 'er down again. What a tool.

 

[KW Sluggo]

This CBA is just crap, pure crap.

We are threatened with a lock out to secure a CBA that will outlaw contracts longer than 5 years. So what do the GMs do this summer?

Not only sign UFAs to 13 year contracts, they offer RFAs contracts and offer sheets of 10 years plus., but now on the cusp of a lock out they deliberately begin negotiations of 6 and 6 year contracts a year early to ensure that the Taylor Halls of this world get in on the gravy train they claim to be trying to stop.

The problem is not with the players, it is with the GMs. If they wanted to stop this crap, they could do so without the need for a new CBA and a lockout.

That is why a new CBA will never solve the NHL's problems.

The last one was supposed to be a pure win for the owners and an abject loss for the players.

So successful that the NHL now needs another lockout?

The GMs are like heroin addicts and Bettman would have us believe the solution is lower doses. It does not work in the addiction world and it won't work here either.

 

[hockeyfan1]

This CBA is just crap, pure crap.

We are threatened with a lock out to secure a CBA that will outlaw contracts longer than 5 years. So what do the GMs do this summer?

Not only sign UFAs to 13 year contracts, they offer RFAs contracts and offer sheets of 10 years plus., but now on the cusp of a lock out they deliberately begin negotiations of 6 and 6 year contracts a year early to ensure that the Taylor Halls of this world get in on the gravy train they claim to be trying to stop.

The problem is not with the players, it is with the GMs. If they wanted to stop this crap, they could do so without the need for a new CBA and a lockout.

That is why a new CBA will never solve the NHL's problems.

The last one was supposed to be a pure win for the owners and an abject loss for the players.

So successful that the NHL now needs another lockout?

The GMs are like heroin addicts and Bettman would have us believe the solution is lower doses. It does not work in the addiction world and it won't work here either.

Makes one wonder just what the owners are serious about.  If one believes in something (in this situation, the idea of limiting player contracts), then, how is one to be believed if one does the opposite of what one wishes to achieve??!!

The true crux of the issue in these CBA talks are league revenues, and who gets to share what in them.  The rest of the proposals are 'filler' material, important in attempting to forge an agreement yet still on the fringes of the true subject matter here -- revenue sharing.

IMHO, in the manner that these negotiations are being debated, it's doubtful a brand new NHL season will emerge.  I'm still hoping for the best....

 

[GhostofPotvin29]

Does Bettman hold the record for most sports lockouts by one commissioner yet?

 

[cw]

So if the NHLPA don't know "what the numbers mean", then there's little doubt they didn't do their job for the players they represent. There are no meaningful excuses available to them there because if the league inhibited them from getting that information, we would have heard about a grievance before an arbitrator.

That assumes that I'm referring to fraud or shadiness as opposed to simple incompetence(or, as mentioned in the case of the Sabres, a lack of interest in turning a profit), something that will cost a business money and that shouldn't be redressed through collective bargaining.

No it doesn't.

In order to make an allegation of fraud or shadiness, one has to understand "what the numbers mean" (which you claim the NHLPA don't). I wouldn't confuse two events that logically and fundamentally contradict each other like you are.

Likewise, if one makes the overall allegation of "incompetence" or "a lack of interest in turning a profit", it defies that they did so while claiming an overall lack of understanding of "what the numbers mean". Either one doesn't understand overall "what the numbers mean" or one makes the allegation of "incompetence" - they can't have it both ways to a meaningful level because that's sucking and blowing at the same time.

If there was any fraud, there are severe penalties for that in the CBA (draft picks and million dollar fines) and we would have heard about it. So that should not be a part of this discussion or an assumption because claiming fraud at this late date fundamentally contradicts how the CBA actually works. They didn't have to wait until a CBA negotiation to raise the fraud issue. If they did, the NHLPA would likely be negligent of having left it so long. Again, we have no claim of fraud in the history of the deal so I don't know why it would be brought up beyond some overreaching figment of fervent imagination.

There may be some dispute over how the various definitions within the CBA have been applied. But the NHLPA had a grievance process to address that which hasn't been used beyond the few we've heard about in the media related to players RFA contracts, etc - not about the meaning of the financial numbers in the CBA. If the NHLPA didn't understand "what the numbers were", they could grieve them to get clarity as the deal went along. But that hasn't happened either.

A common term within the CBA is "(Other) Direct Costs". Most of the other line items are pretty self evident in meaning though they're also defined. For each line item where "direct costs" occur to determine "net revenue" (gross revenue - costs), what is meant by "Direct Costs" is defined using various terms like "insurance" or "product" or "labor", etc. But beyond that, they're capped (I haven't seen one that isn't though I could have missed some). They're also tied to Levitt's audit approach for what type of expenses went into previous calculations. So whatever whining there might be about understanding those definitions (of which I've heard none), the players are protected such that they cannot get out of hand because of the individual caps on those direct costs.

Since those direct cost cap rates in the CBA were derived by Levitt's 2002-03 audit, if anyone is likely to have a complaint, it would be the owners because it's very likely that the costs outgrew the CBA formula for them over the last 9 years.

Secondly, any complaint about owner incompetence is severely muted because the NHLPA agreed upon those cost formulas that confined the owner and they are not exposed to any excesses. The main area of expense exposure for an owner failing to be profitable in the CBA is in how much he's paying his players. I cannot see the NHLPA crying too hard about an owner who paid his players "too much".

To suggest I'm making the assumptions alleged in your quote is floating a very flawed and illogical strawman that has little foundation in the CBA agreement, in the media and in the facts.

 

[cw]

The fact that the NHLPA extended this deal two years also speaks to that. If this CBA wasn't a pretty fair deal for the players, they wouldn't have extended it.

We've gone over this before but you know that's a gross oversimplification of the collective bargaining process. The only way the PA was going to not extend the deal was under the pretense that they could get a better one, an impossibility given the state of the PA and the natural leverage that the owners will have in any negotiations.

The fact that the NHLPA didn't have a financial leg to stand on had plenty to do with it. The rest is smoke.

1. Under the present deal, NHL players are making a percentage of revenue significantly greater than the NBA and NFL while delivering a fraction of the revenues those other two leagues do.

2. The NHLPA's first proposal offered a significant cut in pay. They didn't offer that because a better deal was "an impossibility given the state of the PA and the natural leverage that the owners will have in any negotiations." They offered it because their own auditing of the NHL's numbers for every year under the current CBA showed the overall league wasn't making much money.

Actions and facts speak louder than words. The NHLPA didn't have any remotely rational financial argument throughout the life of the current CBA to get a better deal. It's not even close.

 

[cw]

If the players are seeking to dictate to the owners how many sales people they can hire for example or having some say in the league expenses to that extreme, I'd promptly tell them to enjoy their lockout and cease discussions because that gets silly and unreasonable really fast.

Employees, huh? Funny how that "partnership" rhetoric gets tossed out pretty quickly once the players are even vaguely interested in making it meaningful.

And regardless of how "silly" you think it is, it's going to be a sticking point here. If I were in a PA that had bargained away what the NHLPA did in 04-05 I'd be pretty insistent that whatever givebacks I agreed to in this CBA would be backed up by some sort of guarantee that the Owners wouldn't be allowed to operate their businesses poorly if they would seek to redress any and all losses they incur by seeking to reduce my salary in the next CBA. That's the risk the players are apparently responsible for and that's what they're interested in having some say in.

As per my previous post above, the NHLPA already had cap formulas on the various direct costs in the prior CBA. If they think they're going to get any more than that, they can enjoy a long lockout.

 

[Kin]

Secondly, any complaint about owner incompetence is severely muted because the NHLPA agreed upon those cost formulas that confined the owner and they are not exposed to any excesses. The main area of expense exposure for an owner failing to be profitable in the CBA is in how much he's paying his players. I cannot see the NHLPA crying too hard about an owner who paid his players "too much".

They will if that owners choices are then presented by the League and their blind acolytes as evidence of a fundamental problem with the system and its salary structure, necessitating a leaguewide salary rollback, as opposed to a system that merely allows for an owner to make decisions that take his team into the red despite having their player costs strictly controlled because they're incapable of setting that for themselves.

 

[Kin]

The fact that the NHLPA didn't have a financial leg to stand on had plenty to do with it. The rest is smoke.

1. Under the present deal, NHL players are making a percentage of revenue significantly greater than the NBA and NFL while delivering a fraction of the revenues those other two leagues do.

I'm sorry but that is pure, unadulterated malarkey that doesn't even stand the scrutiny of your own internal logic. If the deals that a PA struck had a direct relationship to the profitability and overall revenues of the league than the NFL players share of their leaguewide revenues would be the highest of the four major sports leagues as the NFL is by far the most profitable/highest grossing sport. But they don't, do they? The NFL players get the lowest percentage of leaguewide revenues of the four major sports and, I think we agree, that after the NHL and PA eventually strike their deal here that will still be the case by a pretty significant margin.

I'm sorry but unless you are straight off the turnip truck most people have abandoned the notion that "fairness" dictates deals of this nature as opposed to leverage. Thinking otherwise will get you laughed at. The percentage of revenues earned by players in the four major sports does not, in any way, correspond to the ranking of those sports by revenues or profitability. The NBA, a league claiming to be losing hundreds of millions of dollars, struck a significantly worse deal for itself than the NFL in the same summer when nobody was claiming it was anything other than profitable.

What the ranking of revenues earned does correspond to is a listing of which PAs are the strongest and best organized and therefore best able to combat the natural advantage in these negotiations that owners will have.

2. The NHLPA's first proposal offered a significant cut in pay. They didn't offer that because a better deal was "an impossibility given the state of the PA and the natural leverage that the owners will have in any negotiations." They offered it because their own auditing of the NHL's numbers for every year under the current CBA showed the overall league wasn't making much money.

Well,the way I understand it, The PA did not propose a pay cut by way of real dollars. The way I understood the offer is that NHL players would receive the same dollar amount they did last year and all growth the league saw would go to the owners. That's a freeze, not a cut.

But more to the point the rest is just ridiculous speculation on your part. You don't know what players and agents are telling Don Fehr about what they want this go around. There might be a real reluctance among players to miss any paychecks regardless of what they think is right or fair. There may be a lot of guys who have signed big contracts who'll take whatever they can get so long as they don't miss boat payments. Fehr's job is to strike the best deal he can for the players, not to strike a blow for ideology.

 

[Kin]

If they think they're going to get any more than that, they can enjoy a long lockout.

Well, try not to sound too excited there because by some accounts that may be exactly what we're about to see.

And hey, maybe some players will enjoy a long lockout. They've got their escrow payments coming. Any player who signed a longterm deal with a big signing bonus won't be sweating it at all.

I mean, I bought my winter classic tickets so aside from wanting a deal done that saves that I don't have a rooting interest here. NHL owners, none of whom rely on their being a hockey season to pay their mortgages, have enough leverage here that they'll probably "win". And, you know, whatever. I've come to grips with the fact that what's right or sensible doesn't have a big place here.

The people who run the NHL want their profits guaranteed and their league idiot-proofed. They want their employees to bear the entire brunt of their bad decisions while they run money losing franchises before they sell them and make out like bandits(How's Minnesota treating you, Mr. Leopold?). They want to say publicly that they don't care if their teams make money, make stupid decisions and then come hat in hand when those bills come due. They want to operate their teams as small parts of larger operations in terms of cable content or real estate ventures and then pretend that losing a few million on the hockey team they ran poorly is going to bankrupt them. They want to offer giant, front loaded contracts and then demand the PA agree that they shouldn't be allowed to. They want to pretend like they're running public trusts when they're begging for stadium money or apologizing for being unable to make the playoffs but then are fine to lockout players at a drop of a hat and not put the games on. There's a word for people like that and the censors and good taste prevent me from using it. Worse still, it's really a microcosm of what's happening in the world at large.

And the worst of it? There's no good guy here. The players and agents are no better. They'll strike a deal so that none of them miss payments on their 8 sports cars that ensures that players after them make less money than they did.

I'm an adult, I've made my peace with all this. Just don't try and sell me that this has anything to do with fairness or any kind of sane ideology. This isn't capitalism. This is just plutocracy.

 

[KW Sluggo]

The fact that the NHLPA didn't have a financial leg to stand on had plenty to do with it. The rest is smoke.

1. Under the present deal, NHL players are making a percentage of revenue significantly greater than the NBA and NFL while delivering a fraction of the revenues those other two leagues do.

I'm sorry but that is pure, unadulterated malarkey that doesn't even stand the scrutiny of your own internal logic. If the deals that a PA struck had a direct relationship to the profitability and overall revenues of the league than the NFL players share of their leaguewide revenues would be the highest of the four major sports leagues as the NFL is by far the most profitable/highest grossing sport. But they don't, do they? The NFL players get the lowest percentage of leaguewide revenues of the four major sports and, I think we agree, that after the NHL and PA eventually strike their deal here that will still be the case by a pretty significant margin.

I'm sorry but unless you are straight off the turnip truck most people have abandoned the notion that "fairness" dictates deals of this nature as opposed to leverage. Thinking otherwise will get you laughed at. The percentage of revenues earned by players in the four major sports does not, in any way, correspond to the ranking of those sports by revenues or profitability. The NBA, a league claiming to be losing hundreds of millions of dollars, struck a significantly worse deal for itself than the NFL in the same summer when nobody was claiming it was anything other than profitable.

What the ranking of revenues earned does correspond to is a listing of which PAs are the strongest and best organized and therefore best able to combat the natural advantage in these negotiations that owners will have.

2. The NHLPA's first proposal offered a significant cut in pay. They didn't offer that because a better deal was "an impossibility given the state of the PA and the natural leverage that the owners will have in any negotiations." They offered it because their own auditing of the NHL's numbers for every year under the current CBA showed the overall league wasn't making much money.

Well,the way I understand it, The PA did not propose a pay cut by way of real dollars. The way I understood the offer is that NHL players would receive the same dollar amount they did last year and all growth the league saw would go to the owners. That's a freeze, not a cut.

But more to the point the rest is just ridiculous speculation on your part. You don't know what players and agents are telling Don Fehr about what they want this go around. There might be a real reluctance among players to miss any paychecks regardless of what they think is right or fair. There may be a lot of guys who have signed big contracts who'll take whatever they can get so long as they don't miss boat payments. Fehr's job is to strike the best deal he can for the players, not to strike a blow for ideology.

Well written and I concur

 

[cw]

Secondly, any complaint about owner incompetence is severely muted because the NHLPA agreed upon those cost formulas that confined the owner and they are not exposed to any excesses. The main area of expense exposure for an owner failing to be profitable in the CBA is in how much he's paying his players. I cannot see the NHLPA crying too hard about an owner who paid his players "too much".

They will if that owners choices are then presented by the League and their blind acolytes as evidence of a fundamental problem with the system and its salary structure, necessitating a leaguewide salary rollback, as opposed to a system that merely allows for an owner to make decisions that take his team into the red despite having their player costs strictly controlled because they're incapable of setting that for themselves.

They won't get very far with the argument on a league total basis because a small market team paying near the cap is more often than not maximizing their revenues. The players are paid on the basis of a % of revenues. If the teams overpay, the salaries get rolled back to the % of revenues. But the league would be looking at close to a best case in revenues and still not making much money with players salaries at 57%.

Secondly, for the teams that overpay, you have them offset to some extent by say the Leafs in 2010 who were the top revenue team paying $5 mil under the cap.

Part of the owner's effort in a given season as a contender is to try to win. Cherry picking a team who swung for the fences in a given season doesn't represent the entire league nor the entire financial problem.

The NHLPA cannot escape the fact that most expenses are capped and the league enjoyed 7% annual growth through a very turbulent and difficult economy that still persists (not a bad result). Yet they still were not able to make much money on $3.3 billion in revenues. Therefore, the players salaries being the largest expense by far have to take a cut for the owners to receive a more reasonable bottom line.

So cherry picking teams isn't going to get them very far.

And with their offer to cut their pay, the NHLPA has already conceded as much though they obviously haven't gone as far as the owners want.

 

[cw]

2. The NHLPA's first proposal offered a significant cut in pay. They didn't offer that because a better deal was "an impossibility given the state of the PA and the natural leverage that the owners will have in any negotiations." They offered it because their own auditing of the NHL's numbers for every year under the current CBA showed the overall league wasn't making much money.

Well,the way I understand it, The PA did not propose a pay cut by way of real dollars. The way I understood the offer is that NHL players would receive the same dollar amount they did last year and all growth the league saw would go to the owners. That's a freeze, not a cut.

Factually, it appears that they did take a cut.

The NHLPA proposal projected the NHL would continue to grow at 7.1% per year. They proposed to leave $465 mil on the table over the first three years. They proposed to raise their payroll in 2% increments annually over the first 3 years of the deal with a 4th year as an option to return to the current deal.
http://www.tsn.ca/nhl/story/?id=403145

Leaving $465 mil on the table compared with the current 57% of revenue rate and allowing for revenue growth, works out to 53% on average, starting at 51%, then 53% in the 2nd year and going to 55% in the 3rd year. I realize they're trying to get independent of revenues but that's how it works out with their 2% increments in the article to maintain $465 mil payroll reduction against 7.1% annual growth.

From that, the players would take about a 4% cut in pay next season compared with what they were paid this season. And it would be about 11% less than they would have got under the current deal next season.

So the players have recognized and accepted the NHL's financial problem and the NHL's numbers to some considerable extent by offering right out the gate to take a cut in pay.

The acceptance of the NHL's financial results to some considerable extent demonstrated by the NHLPA's reaction to them with their first proposal speak louder and clearer than internet hyperbole.

 

[Frank E]

So the players have recognized and accepted the NHL's financial problem and the NHL's numbers to some considerable extent by offering right out the gate to take a cut in pay.

Just to stick my nose in here...I'm not certain the players have recognized and accepted that they have to take a pay cut because of the numbers.

I think they may recognize that the league, regardless of the numbers, is going after that % of revenue no matter what.  Again, this time around, they seem resolute.  So to get a deal done, sooner or later, they figure they're going to have to give a little.

I'm actually surprised that the players suggested the short term pay cut in their first proposal.

It's my feeling that the players really want those 10-15 year deals to remain, even if they have to give up more % of revenue.  Security of longer term deals may be more important than an extra 10% on a 5 year max term.