Since the COVID-19 pandemic took hold, more than 260,000 people have died in North America. On Thursday, a mind-boggling 1,962 people died in the United States alone. That’s 1,962 families that lost a loved one. The job losses have been staggering. Businesses are closing and people are facing a fearful and uncertain future. Twelve million Americans – 12 million! – face the possibility of losing their pandemic unemployment benefits the day after Christmas. According to modeling charts prepared by the Public Health Agency, Canada could face a worst-case scenario of 60,000 new cases a day by the end of December. Things are getting worse in the second wave and there is no immediate end in sight.
So of course the NHL would pick now to try to squeeze more money out of the players in exchange for giving them the privilege of playing hockey this season, right? It boggles the mind how tone-deaf the league can be sometimes. After doing such an outstanding job pulling off the playoffs and building up all sorts of good will, the league now looks petty. And what’s worse is it is dragging the players down into the mud and engaging them in a public relations war they are destined to lose. Because for whatever reason, a good portion of the paying public tends to paint the millionaire players as whiny and entitled, while giving the billionaire owners a free pass.
Right about now, you might be tempted to say, “A pox on both your houses.” And you’d be reasonable in saying that. Four months ago, the players collectively bargained a four-year extension in good faith with the owners and they did so girding themselves for what they thought would be the worst-case scenario. As it turns out, both the league and the players were probably kidding themselves in those projections and had an unrealistic view of the devastation the pandemic was going to cause to the business.
Now the NHL will argue that it has every right to ask for more concessions. Without going down a rabbit hole, everything has to do with Section 17 of the Standard Player’s Contract. In the memorandum of understanding between the two sides, the league essentially protected its rights to suspend operations this season without having to pay the players. So the players are very angry. And they should be. But is it Gary Bettman and the NHL they should be vilifying or their own union’s leadership?
But the point is it’s a bad look no matter which side is right. The players agreed to a 20 percent escrow on this year’s salaries, plus a 10 percent deferral. The owners came back with a request to have the players increase their deferral to 26 percent and escrow to 25 percent. That amounts to a 45 percent decline in take-home pay before taxes. (It’s not 51 because the deferral is on the salary amount after escrow has already been deducted.) Is it a request? Is it a demand? Or is it all a part of the negotiation process?
The NHLPA is counting on it being the third option. And that’s why you probably won’t hear a lot about this issue for the next little while. The NHLPA is basically sitting back and waiting to see what the NHL’s ‘real’ offer is. And while there might be some wiggle room on increasing the deferred payments, the players want absolutely no part of taking on more escrow. So if the NHL is intent on trying to get more from the players, this is going to take time, time that the league doesn’t have if it hopes to start the season by Jan. 1. If you want players in camp for Dec. 15, while giving players who didn’t play in the bubble last season a head start of a week to 10 days, you don’t have much time to get a deal done. And the further the two sides are apart, the longer it’s going to take to come to some kind of agreement.
The losses the league will incur are very, very real. Let’s say the league plays a 60-game schedule. With arenas full of fans, that would mean the league would be getting $3.65 billion in revenues in a perfect world (based on overall revenues of $5 billion pre-pandemic). It’s believed about 70 percent of the revenues in hockey come from the arenas, so that total gets knocked down to just over $1 billion for the season. The players will be making about $2 billion in salaries and associated costs are about $1.5 billion. That’s a shortfall of $2.5 billion, half of which the players will owe the owners. That’s going to take a long time to pay off. And do you know who will be paying it? Kids such as Shayne Wright and other young superstars who aren’t even in the league yet.
Yikes.
Now, let’s look at the players, specifically Kevin Rooney and Phil DeGiuseppe, who will make $700,000 this season playing for the New York Rangers. With a 25 percent escrow and a 26 percent, that goes down to $388,500. Take of 52 percent in taxes and that goes down to just over $186,000. That may still seem like a lot of money, but once you factor in the cost of living, it doesn’t sound near as appealing.
So yes, this is a very real discussion about money. But guess what? Everybody is having a difficult time right now. So if the NHL and players are looking for sympathy as they have this very public dispute, they’re not bound to find many among people trying to get through one of the most monumental challenges this generation has faced.
