301 days later… the lockout ends

It was a long, long drought for hockey fans… the longest labour stoppage in the history of sports. Yet after getting a preview of the new 600 page collective bargining agreement, I think this agreement was worth waiting for. It’s a new six year agreement that I think will in the long run be very good for both the NHL and its players. Even though it looks like one side made out of this agreement like a bandit, I actually believe that both sides won with this deal. There are good things for both sides to celebrate, and for that reason I forsee no problems and we’ll see hockey again in October.

Here are the guts of the agreement, and the most interesting details:

– the owners got a hard team-by-team salary cap. A payroll of range of $21 million to $39 million (in the first year), which excludes all player costs (benefits, insurance etc). The salary cap is a welcomed change from the spend and win mentality of the past 10 years. I’m hoping this hard cap will make the NHL competitive for all teams involced and we won’t see Yankee like spending from teams like Detriot and Colorado like we have for the past decade.

– the league’s total expenditure on player costs (salaries, bonuses, benefits and insurance) is not permitted to exceed 54 per cent. This is the linkage to revenue that the Owners had asked for as well.

– even though it was a tactic to prevent a salary cap, the union still agreed to a 24 per-cent salary rollback for any NHL player who has time remaining on an existing contract. So not only did they lose 100% of their salary for the lost year, they also lose a quarter of they make for the upcoming year.

– liberalized free agency: age eligibility for unrestricted free agency at age 31 in 2005, 29 in 2006, 28 in 2007. In 2008, it will be 27 or seven years of NHL tenure. This means Sidney Crosby could be a unrestricted free agent by 25.

– a more restrictive entry level system, totally revamped salary arbitration, improved pension benefits and a revenue-sharing plan. This part I like a lot. Not only does pension improve for current players, but this also includes those who are already retired.

– A percentage of salaries put into escrow until the new salary cap can be calculated at the end of each season.

– No player can earn more than 20 per cent of the team cap, which for 2005-06 means no player can earn more than $7.8 million. This one is huge. That means we’ll never see a single player make more than 10 million in the NHL, let alone 20 million like we’re seeing in other leagues.

– Revenue-sharing where the top 10 money-making clubs donate to a fund shared by the bottom 10 teams. This one should prevent the lowering earning teams from folding the first few years back from the lockout.

– The entry-level draft system will limit those players to $850,000 a year in salary (which it was 10 years ago) with bonuses not as easily reachable as the previous deal.

– Two-way salary arbitration. Both players and owners can select to go to arbitration, whereas only players had those rights in the previous deal. This will allow owners to downgrade underperforming players.

– The ability for teams to buy players out of their contracts at two thirds of their value. This is meant to help teams fit under the cap but the clubs won’t be able to re-sign those players.

– Participation in the February 2006 Olympics in Turin, Italy.

This new agreement (pending ratification) will kick off the most bizarre and busiest off-season in NHL history. They’ve booked the draft to take place on the 30th in Ottawa, and the draft lottery will take place on the 21st which is a week away from today. The new draft lottery is what I think is the best and fairest system in sports right now. Regardless if you are the worst team in the league or the Stanley Cup Champions, everyone will have a remote chance to win the first pick.

This was a demand that was made by the good teams in the NHL, basically saying that if they have to take a hard cap… then everyone should have a shot at getting the best players in the draft regardless of standings. That means this year’s best player coming into the draft has a 1 in 48 chance of going to any team in the NHL. That means we could see Sidney Crosby (who produced 168 points in the Quebec juniors last year) dress up for any team this year, not just the teams that did badly in 2003-2004. He has as much a chance of suiting up for teams like Toronto and Detroit than he does to play for teams like Pittsburgh and Columbus. I look forward to see the draft lottery, which I am sure will produce a lot of happy people and lot of pissed off people.

In all, this deal was worth losing a whole year over. Both sides managed to make progress with this deal. While the Owners made the most progress and got the hard cap they wanted and needed, this will in the long run make the NHL better and easier to run. The problem now is getting the fans and the TV networks to come back to the fold. It will take the collective efforts of both the players and the owners to accomplish that feat and it will be interesting to see how many if any teams manage to fold to the pressure. Only time will tell if this will be the salvation of the NHL and the sport in general… but for now at least the game is back and ready to go.

And for those who are still bitter about the lockout, I have a simple piece of advice for you: build a bridge and get over it.

So in conclusion…

GO LEAFS!

Peter