On Friday, all the insiders have lined up to repeat the same story. The NHL and NHLPA had a discussion that went well into the evening Thursday and continued on Friday about a potential schedule for a 2021 season. The hard-to-believe January 1 date had now slid to January 15.
This report has the details:
According to TSN Senior Hockey Reporter @frank_seravalli, the NHL shared draft schedules with the NHLPA on Thursday, including a 56-game season outline: https://t.co/0ciw7M41ME#TSNHockey pic.twitter.com/Cz4i4J4efg— TSN Hockey (@TSNHockey) December 4, 2020
The gist is this: A 56-game schedule that begins in mid-January works well with the proposed divisional realignment, and produces enough games to keep the TV people happy with 68% of a normal season and an end the playoffs in time for the Olympics to begin in Japan.
In a scheduling sense, this is doable. Training camp would start around January 1, barely even causing a problem in Edmonton where their arena and practice facility are in use until January 5 for the WJC. The promise made to the seven teams that did not make the playoffs in the summer for an extra week of training camp can just barely be squeaked in during December and allow for quarantine on arrival for players from Europe.
The divisions would likely be the previously speculated groups of the seven Canadian teams in one, and three US divisions of eight teams each, geographically organized to limit travel time and make a compressed schedule more plausible.
All that’s really left here is fine tuning the exact dates of training camp and the start of the season as well as roster rules and what to do if the AHL lags behind. This is, of course, the easy part of the problem.
Money or Hard Part, Part I
The NHL and the NHLPA are said to be miles apart on the issue of how exactly they are going to deal with divvying up the pain of financial losses. The players insist the deal they signed in July should stand, and the owners are equally insistent that they simply can’t do business in this new reality they didn’t foresee without some changes. Arguments over who should have foreseen what, and if the players should now dig in or give in miss the point.
There isn’t any money. Or rather, there isn’t enough.
By insisting the CBA should not be renegotiated now, that the Memo of Understanding (MOU) is sacrosanct, the NHLPA have made the NHL’s argument for them: The owners are entitled to half of all revenue actually earned, and they aren’t going to give up any of their cut.
The seeds of this dispute were planted in March, when last season was paused. Players were owed one more paycheque, and they very wisely agreed to just dump it wholesale into the escrow account. After they’d done that, and using the best possible estimates of the 2019-2020 final revenue figures, the players had already been overpaid their 50% share for that year.
Escrow is a tool used to allow for the NHL to split their revenues in-season based on estimates, and then reconcile it all later. The escrow pool, made up of a % deducted from all player salary, is split up long after the season is over in a way that preserves the 50-50 revenue sharing formula. It has never been too small to cover the owner’s share until now.
The MOU ordered the entire escrow pool for 2019-2020 paid out to the owners immediately. It also detached the salary cap from the reality of revenue projections. If you thought it was a made-up number before (it wasn’t), it very much is now.
The repayment plan (future escrow amounts designed to clear the existing debt and not accumulate too much more) was very optimistic by anyone’s reckoning, and would only work if revenues bounced back quickly. They might, yet, but the plan seemed to assume this season would be played in front of fans. It won’t start out that way, so even more debt will be added to the players’ ledger, and as anyone who’s ever had a credit card knows, adding more debt when you can’t pay off what you already owe doesn’t end well.
It’s not the members of the NHLPA executive that will pay that debt off, not entirely. It’s the players of the future, many of whom haven’t even played their first NHL game yet. By leaving the MOU escrow schedule as is, someone like Nick Robertson could be looking at a future where his first real contract will see big slices taken out every year so John Tavares gets more of his $11 million now.
If that was all this fight was about, the NHL might just say, fine go screw over your youngest teammates, we don’t care. But the warning Gary Bettman made in his recent remarks that should be troubling to everyone is that, if the escrow debt is allowed to grow, the NHL might keep the salary cap flat for a lot longer than everyone is hoping. There is a mechanism in the MOU to actually lower the cap if revenues crash. Revenues in 2021 may well crash if the whole season is played in empty arenas. That is a scenario much worse that rejigging the escrow numbers now.
The players are being asked to pick a package of increased salary deferrals and escrow, and how they settle this will impact both sides’ future finances.
Salary deferral is not the same as escrow, even if, to a player, it’s all just money he doesn’t get paid. To an owner, the escrow has to be paid now, and held until they get it back after the season is over, but deferrals are an expense that doesn’t have to be paid out until months or years down the road. While the players know they’ll never get the escrow back, and the owners know they’ll get it all in time, the deferral has to be paid back to the player. Deferrals are meant to ease the strain now while owners have no money coming in while their expenses are going up and the paycheques have to keep getting written.
The NHL has access to cheap debt financing, and they can keep all 31 teams going until they have ticket sales, but this is the same credit card story again. If a team does not make a profit most years, and many don’t, then adding to their debt load just eats into the value of the franchise because it is never getting paid back. The NHL is not looking to create more Arizona Coyotes out of their least wealthy teams.
For the NHL, just because they can live with the MOU as written, doesn’t mean they should. And for the players, just because they can kick the can down the road to the future players doesn’t mean they should, and that brings us right to the actual hard part of this decision.
COVID-19 or Hard Part, Part II
Just because you can schedule an NHL season, doesn’t mean you should. If you ever want to derail a conversation about life and death, start an argument about money. It’s working for the NHL like a charm.
The current plans leave open the possibility of starting the season in a set of bubbles, or hybrid bubbles where teams rotate in and out. But the endgame is regular home games, possibly with ticket sales in every arena by the playoffs. That requires an optimistic belief in the effect of the coming vaccines on the lifestyles of Canadians and Americans in the next six months. Perhaps a lesson should be taken by everyone about optimism from the whole MOU and escrow thing.
The simple truth is that the divisional realignment only recognizes the least of the problems — the inability of the NHL to get the Canadian government to agree to approve travel while the virus rages out of control in America.
The more significant problem is that the virus is raging very nearly out of control in Alberta, and Manitoba is struggling hard to contain an even worse situation. The Ontario government expressly exempted the NHL from their “lockdown” rules, but Manitoba hasn’t yet said if they will do that as well. Alberta has no plans to derail the WJC bubble while they build field hospitals in tents.
The Canadian division might require a bubble to begin, but if we as a people find the Canadian situation too dangerous for show biz to go on as normal, how then can we countenance a return of NHL hockey in parts of America where things are much worse?
The NHL proved something with their Return to Play. They have good health experts they will listen to that are capable of devising plans that work smoothly and produce optimal results. They showed they’ll go above the minimum legal requirements when it’s necessary, and that just because they can do something, they won’t unless they think they should.
That’s not a description of the NHL I ever expected to say and mean. But that’s where they set the bar. If they really intend to start training camp within the next four weeks, they have decided that bar they set in July was too high to reach again.
This dispute over how soon the owners get paid back for the shortfall in salary for a season that hasn’t happened yet has driven the should they do this at all conversation right off the radar.
My question at the top was is this January 15 date serious? And my answer is, yes, I think it is, although a start to training camp by that date and a season beginning in February is also plausible. But unless someone somewhere forces the NHL to delay, I don’t think they will.
I want new hockey games so bad, I liked the outdoor game scheme the second I heard it, but I’m not sure that I should get what I want.