Is that a light I see at the end of this tunnel?

by Alec Brownscombe on October 17, 2012 in Morning Mashup - 633 Comments

He's tipping Burke off about long term contracts. Clearly. (Photo: Reuters)

Did we witness a breakthrough in CBA negotiations yesterday? At the least we finally saw some meaningful movement in the league’s proposal of a 50/50 revenue split and no rollbacks on signed contracts (phrased more correctly, players will receive the full value of their contract over its duration through deferred salary). The counter proposal won’t be tabled by the NHLPA until tomorrow (Thursday), and the details are still being pored over by the PA, but it had Donald Fehr calling it a seemingly excellent start (to paraphrase) towards getting hockey back in time to save the season. Don’t go screaming hockey’s back just yet, but there’s finally some movement in the right direction.

It’s maddening it took this long to take this step, but maybe the deadline the owners have been working with all along has been mid November, the approximate date by which the league can still save a full 82 game season and all of its revenue. Or so one can hope.

Obviously, there are still a number of sticking points and unaddressed issues within the proposal. Among them is entry level contract length, maximum contract length and salary arbitration eligibility, set at two, five and five years respectively. The UFA age and experience qualifiers also move from seven seasons experience or age 27 to eight seasons experience or age 28. Evident in all of this is that NHL is trying to reduce the big 2nd-contract payday by distancing the players from salary arbitration and unrestricted free agency coming out of their entry level contracts. The players will feel they are losing big on contract terms with these conditions.

Left out altogether are buy out details or possible amnesty clauses.

The league’s latest should, however, set the table for some negotiations of substance in the coming days. The big movement came in the core economic issues we had to date seen little progress on. While the players will still be far from content with a drop in revenue share from 57 (current) to 50 percent, a proposal in which no value is lost on existing contracts eliminates a major sticking point.

An interesting and particularly Leaf-relevant detail in the proposal leaked out late last night. Bob McKenzie reports the league’s proposal includes a too-radical-to-be-true solution towards those overlong-term, back-diving contracts Burke finds so objectionable:

Any existing deal in excess of 5 yrs would carry cap hit in every year of contract, even if player were to retire with year(s) left.

— Bob McKenzie (@TSNBobMcKenzie) October 17, 2012

This immediately struck me as a harsh retroactive punishment for not only teams that signed BDCs but those who have inked long term contracts in general. Not that I wouldn’t be laughing my ass off at Holmgren, Lamoriello and Gillis’ expense and celebrating Burke’s genius if it came to fruition, but the fact of the matter is that none of these contracts explicitly violated any CBA language. It was a loophole that needed to be closed, but the BDCs were allowed to stand under the prior CBA.

Sorry I lied. Important note on back-diving contracts (BDC). If player traded, then later in deal retires, original club on hook for cap hit

— Bob McKenzie (@TSNBobMcKenzie) October 17, 2012

The one GM who will be dumping his drawers at this component of the league’s proposal is Mike Gillis; in Roberto Luongo he has a player on a back-diving contract who already wants out. After Luongo retires, the Canucks will be on the hook for a $5.33 million cap hit for each season until 2022.

None of this is a sure thing, of course, and we’ll have to wait and see for the precise details. But we do know is this, and we’ve known it for a while now: whenever the deal gets hashed out, the cap will be dropping in a pretty significant way after 2012-13. The current offer puts the cap at $59.9 million for 2013-14 after one more season at its scheduled $70.2M.

Too revisionist to say Burke saw this coming and had reasons for his abhorrence towards back-diving deals and his hesitation in handing out long term contracts in general? I think not.

The Leafs have limited few dollars committed on their cap past 2012-13, with only Dion Phaneuf, Mike Komisarek, Phil Kessel, James van Riemsdyk, James Reimer, Nikolai Kulemin, John Michael Liles, Jay McClement and Mike Brown signed beyond the upcoming season. That’s a total of $39 million dollars committed for 2013-14, at which point the cap will dip to around $59 million. The next season? Only JvR, Liles and Grabovski are signed for a total of $14 million tied up in 2014-15.

Cap flexibility: The Leafs have plenty and will be primed to leverage it to their advantage as Burke takes this rebuild forward.

This is not to suggest Gary Bettman has been whispering scoops into Burke’s ear; we’ll leave that imputation to low-integrity journos. Burke’s been around the league a long time. He’s been a scout, served in the league office, and employed as a team President and/or GM in four different markets, all spanning 25 seasons. Maybe, in addition to all that experience, we’ll soon appreciate that he’s a patient man when he needs to be.

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Wednesday Morning Links:

A few other details about the league’s proposal:

• Salaries beyond a certain threshold cannot be dumped into the AHL without counting towards the cap. This also eliminates re-entry waivers.
• Trading of cap space and retaining salary is possible but limited to $3 million per contract year or 50% of average annual value.
• Every NHL team is eligible for revenue sharing but top 10 earning clubs will be responsible for 50% of the $200 million pool.

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