Potential Impact Of The New CBA

As one of the newest writers here at Blades of Teal I initially was going to write about my history with the Sharks and hockey, but that’s going to have to wait until another day. I am a numbers guy, and at the end of the day numbers are pretty tough to argue with. But the numbers I’m most focused on right now are not how many wins the Sharks had in the playoffs, or how many goals Marleau scored. It’s the numbers of the new collective bargaining agreement, or CBA.

As many know the current CBA is ending, with changes sure to be made with the announcement yesterday that the NHL has filed to end the current CBA on September 15th. Some changes that could be made are based purely off speculation, such as the current trend of massive long term contracts. While others like the percentage of total revenue dedicated to player payroll, retirement, and medical benefits, is almost certain to change. Some scary food for thought, they haven’t even begun talking about a new CBA yet.

Currently player payroll makes up roughly 57% of the total team expenses, which most of the general public feel is fine since the athletes are the ones who actually bring in all those fans who spend their hard earned money. But the owners have a problem with that percentage which was demonstrated when the current CBA was established as the owners wanted percentages closer to 50% for player payroll. The owners eased off their stance in the spirit of competition and set the salary cap to have an escalating percentage if league revenue increased, which it has and far beyond what the owners likely expected.

Much like the situation the NHL now faces, the NBA faced only a few months ago. And I suspect the owners will use those CBA negotiations between the NBA Players Association and the owners as somewhat of a guideline. The owners in the NBA essentially wanted to reduce the overall percentage of revenue dedicated to player payroll, which was around 57% prior to the lockout, because the owners kept saying they were losing money year after year (sound familiar?). Players lost big time and their hard-nosed stance of wanting a larger piece of the pie ultimately failed. Ultimately the owners won with both sides agreeing to a 50/50 split of revenue for player payroll after losing 2 full months of the season.

I am quite fearful that the NHL will follow a similar path the NBA did with its negotiations on a new CBA. I am very reluctant to believe there will be a strike as neither the players nor the owners wants to again alienate fans after having some of their highest ever in the past 12-18 months. But I do believe there will be a fight, and it will get pretty ugly, between the NHLPA and owners about player payroll. Ultimately I think the two sides will come to an agreement somewhere between 53 and 55% of revenue for the players, but at what point in the negotiations is that figure reached.

That alone will have a significant impact on teams next season for many obvious reasons. The not so obvious impacts are on those changes that are in speculation, like long term player contracts. If changes are made to the way player contracts can be negotiated in terms length and dollars, will partial contract amnesty be part of it? Nobody knows at this point. But what happens this summer and beyond to the Sharks and the rest of the league will not be determined solely by player movement.

-BleedingTeal

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