ESPN breaks down the new deal

EJ Hradek takes apart the new deal. I add my own commentary in between.

...in his Insider Weblog, ESPN The Magazine's E.J. Hradek -- with the help of key sources on both sides of the table -- offered a look at some of the expected terms:

Term: Six years.

AR: Which means we won't have to go through this again till 2011!

Salary rollback: All remaining contracts will be rolled back 24 percent. The rollback will also impact players who must be given qualifying offers for new deals. Those qualifying offers will be based on a player's salary in his last contracted year, minus the 24 percent rollback.
2004-05 contracts: Those contracts will simply disappear from the ledger. Players, however, will be credited with a "year of service." Years of service can determine a player's free-agent status.

AR: Seems fair to me. They lose the money but the keep the year of service.


Salary cap: Each team must meet a minimum, but not exceed a maximum payroll number. For the 2005-06 season, the high-end threshold will be approximately $37-$39.5 million. The low-end threshold will be between $21.5-$24.5 million.
The numbers are based on the league's projection of revenue for the 2005-06 season. The projection is approximately $1.7-$1.8 billion. According to the league, total revenues for the last complete season (2003-04) were $2.1 billion.
If revenues increase, the salary cap thresholds will increase on a season-to-season basis. If revenues decrease, the salary cap thresholds will decrease on a season-to-season basis.


AR: In other words 'linkage'. As revenues rise (or fall), so will player salaries. I had reccomended in an earlier FUNHL post that linkage was the key to creating a partnership between the players and the league. One side does well, so does the other. It's all so kindergarten basic you wonder why they had to screw around for a year to get here, but they finally did.

Buyouts: Teams will be allowed a window of time to buyout player contracts. A player can be bought out for two-thirds of the total remaining value of his contract, minus the 24 percent rollback. A team will not be allowed to re-sign a player they have bought out for a still to be determined amount of time. The money spent to buyout a player will NOT count against the salary cap.

AR: Bobby Holik, John LeClair, Curtis Joseph and some others can expect their buyout checques to be arriving soon. If the Islanders were smart, Yashin would be on this list as well.


Escrow: A still to be determined percent of players salaries will be placed in an escrow account. In the new deal, league-wide payroll can't exceed 54 percent of total league-wide revenue. If league-wide payroll is determined to be more than 54 percent of revenues, the escrow account will be passed back to the clubs. If league-wide payroll is determined to be less than 54 percent of revenues, the escrow account will go to the players.

AR: This just defines the mechanism by which the revenues are 'trued up'. Frankly it's not dissimilar to how my division handles quarterly bonuses.

Individual team-by-team player cap: No single player can earn more than 20 percent of his team's total payroll. For example, a team with a total team payroll of $37.5 million couldn't pay a single player more than $7.5 million.

AR: This is so the Rangers don't sign Jagr to a massive deal, and then pad the roster with minimum salary players. It also holds true for how Mario was previously handling the Pens.


Revenue-sharing: The top 10 revenue clubs will contribute to a pool that will be redistributed to the bottom 10 revenue clubs. The NHLPA proposed a similar revenue sharing component in 1994 during the league's first lockout.

AR: Revenue sharing - geez, how long have we been suggesting THAT!?!? In any case, the small market teams are now officially off life-support.


Unrestricted free agency: It will remain frozen at age 31 for the first year of the new CBA. It will gradually decrease to age 28 during the life of the deal.

AR: Aprox. 10 years of service to your team gets you a free pass to look anywhere you want.


Salary arbitration: The club and the player will both have ability to elect to go to arbitration. Although not confirmed, I believe NHL will go to a baseball-style arbitration system that calls for both sides to submit a salary figure and an arbitrator to decide on one number or the other. There will be a limit on the number of times a team or player can go to arbitration. And, the clubs will have a limited number of times they can walk away from an arbitrator's decision. Under the old system, the clubs could not take players to arbitration.

AR: 'Duh'. The no middle-ground arbitration is EXACTLY the mechanism we have been using in the FUNHL to solve trade disputes since it's inception. That puts us 15 years ahead of the NHL.

Qualifying offers: Players making less than $660,000 must be tendered qualifying offers of 110 percent of their final contracted season's salary. Players making between $660,000.01 and $1 million must be tendered qualifying offers of 105 percent of their final contracted season's salary. Players making over $1 million must be tendered qualifying offers of 100 percent of their final contracted season's salary.

AR: You know compared to what they were making previously this may seem small, but I would probably kill each and every one of my fellow office mates for a chance at $660K yearly salary. Heck I'll even throw in their families too.


Entry level contracts: Entry level contracts will be capped $850,000 per season, with a maximum signing bonus at 10 percent of salary per season. The contracts will be three years in length.

AR: The 'Ovechkin stays in Europe' scenario just got a lot more realistic.


Minimum salary: The minimum salary will be $400,000. Under the old agreement, the league minimum was $175,000.

AR: $400K a year TO START. Nice. Damn do I wish I could skate.

2006 Winter Olympics: The NHL will shut down operations in February 2006 to allow players to participate in the Winter Olympics. To accommodate the scheduling issues, the league will cancel its 2005-06 All-Star Weekend (scheduled for Phoenix).

AR: Like Phx was actually going to have any people attend the All-Star game anyway. The Olympics though is smart. Gotta stay focussed on the big picture, and the 5 ring circus is the biggest advertising for hockey there is.