When Gary Bettman and the NHL walked away from the NHLPA's most recent Collective Bargaining Agreement offer after only 10-15 minutes of talks, many people concluded that the season was in jeopardy unless the players very quickly changed course and agreed to the previous offer from the NHL. I found this to be a strange conclusion to reach for a number of reasons. For one, when the NHL presented its final offer before the lockout began they also said that it was the best offer they were capable of making, and yet just last week they came back with a new offer that was much better for the players, dialling back their demands on both the Hockey Related Revenue split and individual player contracts. Another reason I found the conclusion that the season was in jeopardy to be strange was that the NHL had walked out on the PA after the last PA offer as well, and yet here we are with the NHL prepared to give up a lot more than it was at that time as well.
So what's going on here? This is how Gary Bettman negotiates. A lot of hockey fans seem to be under the impression that "negotiating" means sitting down at a table and exchanging concessions back and forth until the two parties have met in the middle. But that's not what negotiation is; this entire process, including offers, public statements, private remarks, and time spent between talks, is all part of the negotiation. Bettman leaving in a huff was a piece of carefully staged drama intended to put pressure on the players to make concessions. He wants the players to think the season is in jeopardy so that they'll make concessions more quickly. And why does he want the players to make concessions quickly? Because the owners want to make a deal.
While thinking about how Bettman has behaved recently, my mind went back to this fascinating article from Macleans several months ago. It's an excerpt from the memoirs of Richard Stursberg, who was the Executive Vice President of CBC during the last Hockey Night In Canada negotiations with the NHL, the man who took the lead on those negotiations from CBC's side. And I couldn't help noticing the similarities between that negotiation and the current CBA negotiations. Does this sound familiar to you?:
The challenge going into the discussions with Bettman, then, was to preserve as much as possible both the conditions and the price of the old contract.
How about this?:
This time Bettman tabled his revenue model, which had been prepared by an outside group of consultants. The numbers looked absurd to us. They were another world from what we were actually achieving. Bettman, however, seemed quite happy with them.
Or maybe this:
I sketched out a proposal that was a little richer than our previous one, but which was raked, so that CBC’s payments would increase in later years. We felt this was manageable because inﬂation would assist us, and although we would never admit it to Gary, our advertising rates were underpriced. He wrote down the numbers I proposed for each of the years of the new contract. He used a very expensive pen.
“It sounds good,” he said. “I think we are in the right ballpark."
And then there's this:
We were now into the hardest part, since there was no agreement about time frames or the overall business case. We were down to saying no to each other until one side folded. It would be more poker than business. I liked Bettman’s hand better than ours.
Change just a couple of small details and any of those quotes could very easily describe the last couple of months between the NHL and the NHLPA.
Bettman's negotiating style is quite apparent from the article. He always acts like he's going to get more than he's got, he's always pressing for concessions even when the principles of the deal are in place, he's always trying to find some little place to sneak in an extra bit for his side. Most importantly, he continues to do this even when he knows he's prepared to sign the deal as it currently exists because he knows the other side is concerned and might be tricked into giving something up under pressure.
In the current CBA negotiations the financial terms are largely agreed upon. Yes, there are still differences that sound big on paper, but the gap between the two sides has shrunk considerably. The PA has agreed that 50/50 is the end game, the NHL has agreed to maintain the current definition of HRR, and the NHL has shown some willingness to deal with the desire of players to have their current contracts honoured. The finances aren't quite settled, but they're getting very close.
In Bettman's negotiations with the CBC, once he had agreed to the financials he began needling Stursberg to give up some smaller concessions at the margins: a playoff game for the TSN deal here, a Leafs game for TSN there. He also tried to fight back the CBC's desire for digitial (read: Internet) rights. This has a lot of parallels to the current CBA negotiations, where the financials are coming into place and Bettman is pushing to gain points on the margins in terms of things like contract term limits and changes to the salary arbitration system. CBC was able to successfully fight off the NHL on virtually all of their margin issues; my guess is that the NHLPA will be reasonably successful in that regard as well. But if Bettman can get some concessions out the PA, even knowing he's not going to get all of them, he's going to push as hard as he can to make it seem like it's all or nothing.
Things really shifted in the HNIC negotiations once the CBC realised that major network CTV wasn't in the picture and only CTV's basic cable subsidiary TSN was. Bettman continued acting as though CTV was sitting around somewhere, waiting to be pulled out if negotiations went south, but once CBC realised that wasn't the case they were able to push back. I think something similar is happenning with the NHLPA right now, where it's becoming apparent that the NHL's threats to cancel the whole season are probably empty, that the owners want a deal, and that sponsors are pressuring the NHL to get hockey back on the air.
If you haven't yet read the Macleans piece I linked to, you might be wondering how those negotiations ended. I'll let Stursberg explain:
January came and went. February dawned, with no movement. The NHL still wanted us to give up more playoff games and Leafs games. As well, they were stubborn on the digital rights for the Internet and wireless. February passed.
Did CBC misjudge? Was the NHL really willing to forego the deal? Nope:
Finally, on March 6, we had another long conversation with Daly and Bettman. We said no again on the playoffs, no again on the Leafs, no again on price increases, and we wanted all the digital rights. After three hours, they said yes. They dropped the remaining demands and we were done. A handshake deal was in place.
This is how Bettman negotiates: he always acts like he's prepared to walk away right until the final possible moment. Even if he knows he's prepared to make concessions he fights to gain more anyway because it's always worth the shot that the other side will cave. But in the HNIC negotiations with the CBC, Bettman came down on the asking price of the deal and gave in on most of the tertiary considerations. And that's a lot like what the NHL's CBA negotiations are looking like right now too. I think there will be a deal in place before November is done. We'll likely have NHL hockey by December.