Is NHL labor peace on the horizon?

Sporting News

Last Friday, NHL deputy commissioner Bill Daly told Sportsnet's Chris Johnston he was “cautiously optimistic” over the direction of collective bargaining talks with the NHL Players' Association. In fact, he felt the two sides could agree to stage a World Cup of Hockey in 2021 if the current CBA is extended or renewed.

Johnston also reported representatives from the league and the PA met throughout the summer and will sit down together again this week. Meanwhile, both sides have an opportunity next month to exercise their respective early-out options.

The current CBA expires in just over three years. However, the league can opt out Sept. 1, while the PA can do so on Sept. 15. If one or the other goes that route, the CBA will expire in Sept. 2020. That could set the stage for another lockout.

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Neither Daly nor PA director Donald Fehr indicated if their respective sides intend to use their opt-out clause. Daly told Johnston there seemed to be a lot of agreement regarding the general state of things. He felt there wasn't a huge sticking point on any of the issues discussed thus far.

The deputy commissioner's remarks echoed those by league commissioner Gary Bettman. Prior to the 2019 NHL All-Star Game last January, Bettman told reporters talks between the two sides were cordial and constructive. At the same time, PA representative Mathieu Schneider indicated there was a lack of tension compared to the previous round of CBA negotiations.

With three lockouts (1994-95, 2004-05 and 2012-13) on his resume, Bettman seems intent on avoiding a fourth. Last November, the New York Post's Larry Brooks reported the league was doing all it could to prevent another work stoppage.

Daly didn't indicate if escrow was part of the recent discussions but it's bound to be the biggest stumbling block. Other issues, such as Olympic participation and post-career medical coverage, are also of concern to the players but none are as potentially contentious as escrow.

The current system ensures a 50-50 split of hockey-related revenue (HRR) between the league and the players. During each season, a predetermined percentage is clawed back from the players' paychecks and put into a separate fund. Once the full HRR for that season is determined, the players learn how much of that money will be refunded to them.

The problem for the players is as much as 15 percent can be withheld from their pay during the season. What they get back by season's end is often less than what was originally deducted.

In June, the Associated Press' Stephen Whyno reported the players lost upward of 10 percent of their pay to escrow over the last seven seasons. In a survey of the 31 NHL player reps, Whyno said 25 of them consider escrow the biggest bargaining issue.

The claw-backs could be reduced by cutting salaries, but the players won't be interested in that notion.

Eliminating escrow won't fly with the league as it is seen as an essential component toward achieving a 50-50 balance of revenue.

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The PA could eliminate or reduce their annual salary-cap escalator clause, used to increase the salary cap by up to five percent each year based on revenue projections. In recent years, the PA has voted for only marginal increases as a way of reducing escrow payments. The downside to this is players due to become free agents could receive less than they would have with the escalator clause.

Meanwhile, there are three possible outcomes to the current negotiations.

The first and obvious best-case scenario sees both sides announcing they've hammered out a new CBA. It would probably go into effect next September to allow both sides a year to adjust for the potential changes under the new agreement.

They could also decide not to take the early out and continue negotiations with an eye on reaching a new agreement before the 2022 expiration. That seems the least likely outcome. Given the current pace of discussions, both sides seem keen on a new deal sooner rather than later.

Finally, one or the other could take the early out, triggering the countdown toward a lockout next September if an agreement isn't reached by then.

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