The most complicated contracts generally come down to simple and core principles. I was pleased to finally see some emotion in these negotiations. The fact Gary Bettman looked like he may cry tells me there is finally some traction. The players and Donald Fehr have gotten the owners and Bettman’s attention. About that time. There are lots of clichés for this. Getting down to the brass tacks. Rubber meeting the road. And so forth. I like to equate it to undressing a woman but that is a discussion for another day.
These two words are at the core of nearly every negotiation about money.
How much and for how long.
An at-will employee gets the how much but has no security on the how long. However, the at-will employee can also leave for a better paying position any damn time he or she wants.
A contract employee gets more security and loses some freedom but he or she has free negotiation skills. The market (supply and demand) controls the dollar and term. There are no artificial barriers.
An NHL player needs to pay his dues to earn a big pay-day and, if he is fortunate enough to do so, maximize his earnings for as long as possible. Let’s face it, these guys don’t have a whole lot to fall back on. They need to take care of themselves and their own and the money needs to last for a lifetime.
Under the current CBA, that happens. A player signs an entry-level contract, the NHL club gets him for 3 years at a bargain if he is a good to great player and discards him if he is a bad one. The talented player then receives the benefit of his hard work and innate talent by getting the big contract. If the NHL Club offers too little, the player can exercise his options and sign elsewhere, subject to artificial restricted free agency limitations. If the NHL Club doesn’t offer a long enough term, same option.
What is the biggest hurdle the player has to getting a big pay-day for a long time? If you guessed the “salary cap”, you nailed it. Every club is governed by it and, therefore, it acts as a ceiling to what a player can realistically get. “Want to play for a winner?” Well then he may have to take a little bit less each year because those teams may be up against the Cap…but the team will give the player term (years). “I just want to get paid a ridiculous amount of money now!” Then the New York Islanders await…
It’s a give and take.
It’s a free market system with limitations (read: rules) that restrict anarchy.
The owners want to change that.
They want a 5 year maximum contract term within a salary cap structure. That means no matter how good or great the player, he won’t get paid for longer than 5 years and won’t get the huge pay-day because of the salary cap. From 2004 through the present, the owners created these long-term 10+ year contracts to get around the salary cap issue. Now, they want to close the loophole they created with their competitive spirit and fat wallets to keep themselves from doing it to themselves again.
The owners want to keep the salary cap system that acts as a ceiling on what individual players want to get paid and artificially limit the amount of years the player can get paid.
It’s perfect for the owners. It gives them complete cost control while having every player by their collective and individual nuts. It takes all the options away.
“Oh, you don’t like the 5 year contract I offered? Okay, have your agent pick up the phone so he can get another 5 year contract offer just like it.”
“$4 million is too low? No problem. Find a Cup contending team that can pay you more within the salary cap.”
Sounds great, right? I agree. If I am an owner, I am salivating over this. If I am a player, then my counter offer is a middle finger.