The following letter was sent to the NHL from the NHLPA:
Yesterday afternoon, Bill Daly presented us with an offer from the League that, for the first time, was not linked to League-wide revenues. We appreciated your willingness to adjust your position and we worked to respond in kind. By evening, we had fashioned and reached out to you with an offer from the PA that included, for the first time, a team maximum cap. This offer built upon the 24% rollback and other changes in favour of clubs, which were presented by the Players on December 9, 2004.
As you know, and as Ted told Bill, our offer of a team cap represented a radical step for the PA. We took this step because we too believe that our sport will be damaged greatly by the cancellation of this season and the continuation of the lockout through next season.
We wish that the NHL had offered a “no linkage” proposal before yesterday so that negotiations in that arena could have commenced sooner. However, we recognize that they did not and we agree that time is short.
In that spirit, and in a final attempt to reach an agreement, we are adjusting our offer of yesterday in two respects. First, we are reducing the maximum individual team cap to $49 million in salary, which does not include the $2.2 million per team in benefits due.
Second, we will adjust our exception provision so that it is available to teams only twice during the six year term and for up to only 10% over the limit of $49 million (to $53.9 million), at the tax rate of 150%. The exception provision is important so that a successful team does not have to arbitrarily dismantle its roster after it has achieved particular success or is in a unique phase of its player roster cycle.
I have attached a short summary of the main deal points discussed by Bill and Ted yesterday, as modified above.
I can be reached at the usual phone numbers.
NATIONAL HOCKEY LEAGUE
Robert W. Goodenow
Executive Director & General Counsel
NEW CBA DEAL POINTS:
Term – 6 full seasons (through 9-15-11).
CBA System – Incorporation of NHLPA December 9, 2004 proposal into the recently expired CBA, with indexing of financial provisions (per diems, etc.) at 2% per year, with the following additional changes requested by the NHL yesterday:
Increased salary arbitration rights for Clubs — to be agreed upon. Salary arbitration available after Player leaves Entry Level System.
Cap on Exhibit 5 Individual B Performance Bonuses — to be agreed upon.
Replace NHLPA Revenue Sharing Plan with NHL Revenue Sharing Plan to share at least $88M in each year of the Agreement. Clubs may credit any payroll taxes paid against their revenue sharing contribution.
Team Payroll Limit – $49M in salary and bonuses
Minimum Team Payroll – $25M (each team can fall no more than 10% below only twice during term).
Minimum Player Salary – $300K (as per NHL Proposal)
Payroll Taxes – $40M – $43M (25%), $43M – $46M (50%), $46M – $49M (75%), $49M – $53.9M (150%) – only twice per team during 6 year term
Indexing of Tax Rates and Payroll Minimums & Maximums – All dollar amounts would be in place for 2004-05 (pro-rated) and 2005-06. Dollar levels for tax rates, payroll minimums & maximums for subsequent years either constant or increased by % change in greater of either hockey related revenues or only the gate receipts and broadcasting segments of hockey related revenues from the 2005-06 base year.
2005 Playoffs – 55% of playoff revenues to be paid to Players for the 2005 playoffs.