The NHL players told the owners Tuesday they are willing to take less money in salaries for the next three years as long as the owners of the league's wealthiest clubs will agree to increased revenue sharing in order to help the poorer clubs.
That was the genesis of the long-awaited "alternative proposal," in the words of the players, which was presented to NHL commissioner Gary Bettman, deputy commissioner Bill Daly and a group of owners, general managers and staff by NHL Players' Association executive director Donald Fehr and a group of 23 players. Fehr said the payroll savings offered by the players could range from at least $465-million (all currency U.S.) over the three years of the proposed agreement, if league revenue continues to grow at the 7-per-cent rate it has averaged over the past seven years, to savings of more than $800-million if the growth is similar to the double-digit increase of last season.
"I'm not going to tell you what I think the proposal means," said Bettman, who was carefully polite in his remarks after the meeting at the NHLPA offices in Toronto. "Our hope is we can take care of business in the next month. That is our goal."
Bettman said he and his negotiating team planned to study the proposal Tuesday and return to the union offices Wednesday morning with a preliminary response.
If the league needs more time to study the proposal, Bettman said Wednesday's meeting could be delayed, but only by hours rather than days.
There was a palpable sense of optimism among those on the players' side of the table that the proposal was creative enough that Bettman and the owners would consider it seriously rather than dismiss it outright. The importance of the offer was such that among the 23 players who were present when it was presented to the NHL owners were some of the league's biggest stars - Sidney Crosby, Alexander Ovechkin, Steven Stamkos and John Tavares.
"I like it a lot," Crosby said of the proposal. "I think like Don [Fehr] says, it addresses the issues that the league has with [some] teams and making sure as players we do our part to help those teams out but also holding teams accountable to doing that, too.
"At end of the day, it's going to take both to do that and that's what our proposal shows."
That increased revenue sharing from the league's wealthiest clubs - potentially as much as $250-million a year - was a major part of the proposal was not a surprise. The surprise was that the players did not suggest a luxury tax on clubs who want to spend beyond payroll limits. The proposal retains the hard salary cap that was brought in after the 2004-05 lockout with what Fehr called "a couple small exceptions" that would not change the players' share of hockey-related revenue (HRR).
The proposal also calls for player contracts to maintain the current form as it relates to free agency, term limits and salary arbitration.
The players proposed breaking the link in the current collective agreement, which expires Sept. 15, between HRR and player salaries. Rather than tying club payrolls directly to revenue, in which they rise at the same rate as revenue, the players offered to cap their salary increases if league revenue continues to rise at same rate it has since the lockout, which is an average of 7 per cent.
If the revenue rises more than 10 per cent in a year, the amount above that would be subject to the revenue split in the current agreement, which gives the players 57 per cent of HRR.
In the first year of the agreement, the players' salaries will rise 2 per cent, in the second year the increase is 4 per cent and it goes to 6 per cent in the third year. The proposal also calls for a players' option for a fourth year in which the system reverts to the present agreement and its 57-per-cent player share of HRR.
In exchange, the players are asking the wealthy clubs, such as the Toronto Maple Leafs, Philadelphia Flyers, Boston Bruins, New York Rangers and others, to share more of their revenue, something those clubs have adamantly opposed. Under the current agreement, the most one of the wealthy clubs had to contribute last season in revenue sharing was $14-million.
Under this proposal, if a 7-per-cent increase is anticipated next season, the 2012-13 salary cap would be $70-million, up from last season's $64.3-million.
"When you boil it all down, what we're suggesting is the players partner with the financially stronger owners to help stabilize the industry and assist the less financially strong ownership groups," Fehr said.