After an initial rush of excitement over the news that federal mediators were stepping in to assist CBA negotiations between the NHL and the NHLPA, reality set in. It's non-binding. The two sides seem to have moved about as far as they're willing to in key areas. A mediator may not have the power to do what's necessary here.
Vancouver Canucks goalie Cory Schneider's reaction was probably that of the majority.
"Pretty tempered," he said during a Monday evening phone conversation. "Hopefully it'll provide some new perspective that might shed some light on issues that were previously unbridgeable."
Mediator Keith Seat has a wealth of experience mediating a wide range of conflicts, including antitrust cases, and said the three federal mediators assigned to this case should focus first on the deeper interests both sides have rather than on the issues that divide them.
Deeper issues like, you know, saving hockey.
"Issues such as, not losing the 2012-13 season. That seems like a huge detriment and a bad thing for everybody connected in hockey and something that would be horrible for the fans as well as the players and owners alike," Seat said Monday. "Try and help people on both sides focus on what the real interests are and how they can be harmonized in ways that find solutions."
Mediation didn't work during the previous lockout, but Seat points out that it came along much later in the process. There's also less separating the two sides right now.
That's one of the reasons many in the hockey community are holding their breath and hoping this works, because the next step is potentially much more damaging. If mediation fails, talk of decertification becomes serious.
So the current mood is tempered, yes. But also hopeful. At least a little.
"If the parties are dead set on not resolving this no matter what, the mediator -- they can do all they can do. Still, the parties have to sign on the dotted line," Seat said. "They're responsible for getting to the settlement or causing them to crash."
What will fresh eyes see after analyzing the latest offers from each side? Here's a look at some of the biggest challenges the federal trio will face:
In its previous offer, the NHLPA proposed that the league pay out $393 million in the next four seasons in order to honor the current contracts. The most the league has been willing to pay so far on the "make whole" provision is $211 million. Essentially, this is money outside of the system that helps the players ease down to a 50/50 split. It's an important point of contention for the players, and considering the billions of dollars on the line, something very solvable at this point.
A reasonable mediator suggestion: Maybe this is too simplistic, but essentially splitting the difference should be enough to satisfy both sides. A make-whole provision that pays out about $290 to $300 million to honor contracts is a fair compromise.
Assuming risk moving forward
There's been a lot of talk about how close the two sides are financially, but there's a major hurdle that needs to be addressed in the NHLPA's offer. The line that says this: "There are no guarantees or fixed targets, other than a requirement that, beginning with the second year of the Agreement, players' share, expressed in dollars, may not fall below its value for the prior season." In English? In Years 2 through 5 of the players' offer, the number they make in the second year is the bottom line. Their cut of the revenue won't go below it.
"What they're saying is, 'We're not willing to absorb any risk,' " one NHL source said.
During the previous CBA, revenues grew at record rates, so a clause like this wouldn't have mattered. But there's a growing belief that it may take a few years to recover from the damage of this lockout, and the locked-out players don't believe they should pay the price. The sooner a deal is reached, the less of an issue this becomes.
"If this thing settles in the next two weeks, they've put a lid on it," one agent said.
But if the lockout drags beyond that, it's perfectly reasonable to predict that revenues dip in the coming years. If that's the case, and the players negotiate a floor by which their cut of the revenue can't go any lower, it's no longer a 50/50 deal. They'd get more than 50 percent of the revenue.
"My own personal belief is that it's going to take two or three years to dig out of this," another prominent agent said Monday. "The fans are totally fed up with this. If it takes them two or three years to dig out of this, I'm not sure why the players should pay the price."
A reasonable mediator suggestion: This is a tough one. The players didn't have this kind of protection during the previous CBA and it worked out just fine for them. If the two sides are going to return to a partnership, one side can't assume all of the risk. Perhaps limiting a potential loss in revenue for the players to a certain percentage each year early on in this CBA would be fair. But after three seasons, when the game has recovered, lift all restrictions.
At the outset of these negotiations, few anticipated contracting rights would be such a major hurdle to getting a deal done. If a fair revenue split was agreed upon, the assumption was that the players and owners would find a way to address the back-diving contracts and move on. That hasn't happened yet.
"As the cap gets lower and the players get less of the revenue, the contracting issues become more of an issue," Schneider pointed out. And what has the league targeted? Pretty much everything.
"Arbitration, entry-level deals, salary-cap hits in the minors, back-diving issue, the UFA age moving up, term limits, variance limits. It's a laundry list," Schneider said. "If you have one, you don't need some of the others."
One NHL source called this the belts and suspenders portion of the negotiations. The owners are trying to add as many safeguards as they can in negotiating future contracts.
"And reinforce with them with suspenders," he said.
A reasonable mediator suggestion: The league clearly wants to address two major contract issues: The back-diving deals and players getting UFA money coming out of their entry-level deals. For the players, that shouldn't be a deal-breaker. It's essentially allocating money from one group of players to the other. If the owners want to do two-year entry-level deals and push arbitration back, that's reasonable. A veteran player will get that money, and chances are the young stars coming off their entry-level deals still will find a way to get paid. And both limiting contracts to five years along with having a variance is redundant. Keep the variance and limit contracts to eight or 10 years, if at all. That will prevent those huge contracts that really only involve a small percentage of players. In return, players shouldn't have to give up free agency at 27 and there also should be limits on which players in the minor leagues count against the cap.
Yes, Wade Redden's deal probably shouldn't be wiped completely off the books. But AHL veterans making good money shouldn't have their salary count on any NHL team's salary cap, either.
These aren't issues that should sink the game, there's compromise there that a mediator should be able to find.
"The game is being injured significantly right now," an NHL source said. "I'm not pointing fingers because it doesn't do any good at this point. Wherever the sides are now, they both have to be prepared to move significantly."