- The Washington Times - Friday, September 10, 2004

The NHL Players Association made its first labor proposal in 11 months yesterday, offering management a system based on luxury taxes and revenue sharing that was rejected upon arrival.

With that, the two sides that have bickered for months on the NHL’s economic future finished a four-hour negotiation session in Toronto agreeing on only one thing: The last chance to save the full 2004-05 season is probably gone.

Wednesday will mark the expiration of the current labor deal, and without a new agreement management will begin a lockout of the players that is expected to last for months and perhaps the entire season. No further labor meetings are scheduled, though the NHL’s Board of Governors will meet Wednesday in New York to review its strategy.

Seeking to address growing complaints of intransigence, the union laid out a structure similar to its offer from last fall: a immediate 5 percent rollback of all existing contracts, changes to the entry-level salary structure, luxury taxes on high-end payrolls and revenue sharing between teams. The thresholds for the luxury tax and revenue sharing were changed from last year.

Union leaders claim the bid again shows their side as far more willing to make concessions on a deeply bitter fiscal fight that has enveloped the sport for the past year.

“This is a significant move in the league’s direction,” said Ted Saskin, union senior director. “We see this as a reaffirmation of our desire to get a fair deal.”

Owners could not have disagreed more, quickly terming the new package demonstrably worse than what was offered before. League officials, calling the union bid “nothing more than window dressing,” said the framework still would leave more than half of the 30 teams unprofitable. Twenty teams lost money during the 2003-04 season, according to the NHL.

“Nothing more clearly demonstrates the union’s unwillingness to acknowledge or meaningfully address this league’s problems than this recycled proposal,” said Bill Daly, NHL executive vice president.

Said Saskin: “[NHL commissioner] Gary Bettman’s concluding comment to us was that we weren’t even speaking the same language.”

As the two sides again grappled unsuccessfully with a governing structure for the sport, yet another side fight broke out on the NHL’s claims of fiscal distress. According to Bettman and Daly, the NHL has lost more than $500million over the past two seasons and nearly $2billion over the nine-year life of the current labor deal.

But union officials say more than two-thirds of a listed $224million loss for the 2003-04 season was because of six teams and about a third arose from just New York-area teams. Saskin declined to identify those teams, but both the Rangers and Islanders have sustained heavy losses in recent years.

“You shouldn’t hide behind a leaguewide loss figure if most of the problems are centered on six or seven unique situations,” Saskin said.

Yesterday’s session featured many new players compared to recent talks that consisted of Daly, Saskin, Bettman, union chief Bob Goodenow and several staff assistants and attorneys. Management was joined by several owners, including Boston’s Jeremy Jacobs, who has been loud and strenuous in his calls for major economic change in the NHL.

The union brought several players who sit on its executive committee, including Vancouver’s Trevor Linden and Colorado’s Vincent Damphousse.

The new faces brought only further entrenchment from both camps. Linden reiterated a long-voiced call that “players will never accept a salary cap.” But the NHL continues to demand a firm linkage between salaries and revenues, in large part because, in the words of Daly, “a luxury tax by definition is based on projections of the marketplace. It’s a best guess, and we’re beyond a point where that type of system would work for the league.”

The NHL has asked the union to guarantee savings in a luxury tax system, which players say would generate first-year savings of more than $200million, but was rebuffed.

In July, the NHL presented six different concepts for a new collective bargaining agreement, ranging widely from a centralized league compensation system, not unlike what’s used in Major League Soccer, to an objective, statistically based model to compute player pay. The union quickly rejected each as a de facto salary cap.

Daly said those concepts would have allowed for an average salary of $1.3million, which translates to team payroll of about $30million. Those figures each would be a drop of nearly a third from last year’s average salary of $1.8million and mean payrolls of nearly $44million.

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