It’s time to party like it’s 2012, friendos, because the NHL’s collective bargaining agreement (CBA) is in the conversation again. If you’re like me, and you endlessly devour hockey media every day while you should be doing something productive, you’ve heard a lot lately about the NHL’s offer to the player’s association (NHLPA) to allow for the shutdown of the league during the 2018 Winter Olympics in Pyeongchang, South Korea in exchange for a three year extension of the current CBA. Before I take a stance on whether or not this is a good idea for the players (spoiler alert: it’s not), let’s break down what any of this means.
Every four years since 1994, the NHL has put its regular season schedule on hold for a few weeks to allow its players to travel to some magical, snow covered fairy tale land to participate in the Winter Olympics. This has recently become a major point of contention between the NHL, the International Ice Hockey Federation (IIHF) and the International Olympic Committee (IOC).
Players love playing for their countries, fans love watching best on best international tournaments, and the IIHF and IOC love selling best on best international tournaments to said fans. The league, however, is reticent to shut down its schedule to allow its employees to travel halfway across the world to play for someone else, and team owners are terrified of Olympic injuries (John Tavares in Sochi, for instance).
The reason this is a particular issue of late is that the IOC has refused to pay travel and insurance costs for NHL players. Since the Olympics in Nagano in 1998, the IOC and the IIHF have offered assistance to offset these costs, around $10 million in 2018, estimates IIHF President Rene Fasel.
This year, the IOC refuses, leaving the IIHF and NHL to pick up the slack. Part of the reason the World Cup of Hockey was such a disappointment was that it was so transparently a power play by the NHL to prove to the IOC that they didn’t need no fancy Olympics. Admittedly, another reason was that Team USA chose not to appear, sending sand filled dummies in their uniforms instead (don’t try to tell me different).
The NHLPA was insulted by this latest offer from the league, just ask Marc-Edouard Vlasic, and it’s not hard to see why. The league has been calling the Olympics untenable for months now, painting themselves as the victims of the IOC’s decision not to pay travel and insurance costs, and pretending to be just as upset as players and fans that the whole thing may not happen. For them to use Olympic participation as another bargaining chip in contract negotiations makes their machinations a little too transparent.
So, why does the NHL even need a bargaining chip to get the PA to go along with a CBA extension, unless the CBA unfairly benefits owners at the expense of players? It does, you say? Do tell!
The NHL CBA is structured in a way that’s not that different from that of the NBA, except that they didn’t need to lock out their season for theirs, but maybe I’m just bitter. The key factor that’s relevant to us and our understanding of why players don’t like it is linkage.
The amount of revenue (the total amount of profit coming into the league from
saps fans like us) allocated to owner profits and player salaries is linked at a 50-50 split, meaning that if players are making more than owners (they are), as groups, steps must be taken to ensure equity. Enter escrow. Escrow is a percentage amount, the value of which is determined each year based on math I don’t pretend to follow, deducted from every player’s paycheck every month to even the league revenue between players and owners to 50-50. This year, that value is set at 16%.
Every year, this problem is exacerbated by the fall of the Canadian dollar (not the players’ fault), and the increase in the salary cap (pretty much the players’ fault). Sure, players like Sidney Crosby and Patrick Kane (making $10.9 and $13.8 million this year, pre-tax, pre-escrow) can stomach this for now, they have job security, barring catastrophic injury, but consider what this does to, for example, Nathan Beaulieu’s income. Beaulieu, on an expiring contract, makes $1,000,000 this year. Beaulieu works in Canada, so 33% of that goes to federal income tax ($330,000). Beaulieu works in Quebec, so an additional 25.75% of that goes to provincial income tax ($257,500).
When the owners ask our friend Nate to fork up another 16% of that salary ($160,000) to ensure equity for another three years, maybe he doesn’t want to. Maybe he’s not that happy that his million dollar salary gets him a yearly paycheck of $252,500. Maybe he’s not that happy that that nets him $186,850 US at the current exchange rate. Maybe he and Marc-Edouard Vlasic laugh in their collective faces.
You can imagine why the NHLPA is less than thrilled to agree to extend this agreement. They will likely point to the NBA’s CBA, which hard caps escrow at 10%, but that comparison is complicated by the vast difference both in revenue between the two leagues, in the sizes of the average team roster, and the soft salary cap.
Yeah okay, Erik, but who cares?
The issue I have with this offer isn’t that the league is using the CBA as a bargaining chip to get something they kind of want anyway, (it’s a not so well kept secret that the NHL has a vested interest in sending their players to Pyeongchang, even if it’s only so that they can then send their players to Beijing in 2022, a market into which hockey is desperate to tap (Kunlun Red Star notwithstanding)).
It isn’t even that the league is parlaying something totally unrelated to labor negotiations into a labor negotiation. Anytime two parties disagree on something as central as livelihood compensation, everything is negotiable. The issue is that this is a move calculated to manipulate us.
The NHL made this offer public by design. If the players reject this offer, and they will/have, the league has one more arrow in its quiver come lockout time to blame the players’ association for a work stoppage. “We tried to extend the CBA three years back in 2016, our dear fans, but the players were too selfish!” I can hear it now. It wouldn’t be the first time players were vilified by the fan base for self-advocating against high escrow rates.
Trying to make as much money as possible for your job is not selfish, neither is it selfish of the owners to try to extend an agreement that makes them as much money as possible. When these two groups of people hammer something out at the negotiating table, one of them wins, and one of them loses. When they fail to figure it out, and concentrate their efforts on public offers with no chance of success in order to manipulate the court of public opinion, we’ve started a journey that we as fans are uncomfortably familiar with. Because we know where this road goes.