NHL Seattle received a huge break on Monday when the league’s players announced they’ve decided not to reopen their collective bargaining agreement with team owners two years ahead of schedule.
Instead, the two sides are said to be nearing a CBA extension that could take the deal beyond the 2024-25 season. The decision to decline their option to end the CBA early means the deal will now run at least through the 2021-22 campaign and heads off the possibility of a work stoppage next year that might have hampered NHL Seattle’s run up to an October 2021 launch date.
“The perception of this hanging over our head one year out could have been negative,” NHL Seattle president and CEO Tod Leiweke said after Monday’s announcement, adding: “I think the players feel good about the direction of the league.”
Leiweke said Monday’s decision by players won’t otherwise impact his team’s daily operations as it prepares to add some professional scouts in coming days. The team could also announce the additions of some analytical staffers shortly.
Owners declined their option to reopen the CBA two weeks ago, with NHL commissioner Gary Bettman citing the league’s positive economic outlook. The NHL Players Associaton (NHLPA) held a conference call with its members on Sunday, then pushed off a deadline for notifying the league of its decision by another 24 hours until Monday as allowed under a contract provision.
A statement released late Monday morning by NHLPA executive chairman Donald Fehr read: “While players have concerns with the current CBA, we agree with the league that working together to address those concerns is the preferred course of action instead of terminating the agreement following this season.
“We have been havng discussions with the league about the extension of the CBA and we expect those talks will continue.”
Players and owners have been at odds for years over “escrow” provisions within the current CBA, negotiated in 2013. Players have roughly 10% to 15% of their salaries set aside in an escrow pool each year to ensure that provisions for a 50-50 revenue split with owners are met.
Because player salaries tend to exceed their mandated 50% share of revenues, a portion of that withheld salary is given back to owners to cover the difference. Once that happens, any leftover money in the pool reverts back to players.
Players have likened the system to them signing a contract for one amount, but actually earning lesser money.
Adding to their complaints is that the amount of withheld money can change four times annually — depending on the inflow of league revenues — which they say makes financial planning difficult. Owners technically have to reimburse players with bonuses if salaries run less than the 50% revenue share, but that’s yet to happen since teams generally spend closer to the upper limits of the league’s salary cap.
Players can also vote to implement an escalator clause to increase salaries by up to 5% each year — which provides bigger contracts for some but also increases the amount of escrow money withheld. The system has at times pitted players against one another, with those up for contract renewals wanting the escalator clause used while others locked into multiyear deals were against seeing more of their money withheld.
Any extension of the CBA would provide additional cost certainty for NHL Seattle as it begins plannng its future payroll and drafting decisions. The NHL expansion draft will now also take place in June 2021 as planned, something that might not have been the case had a 2020 lockout dragged on.