Let’s Make a Deal: NHL & NHLPA Make Tentative Agreement

Good evening hockey world! As I mentioned in my article this morning, the NHL & NHLPA had to complete a brand new collective bargaining agreement (CBA) before the return of play to complete the 2019-2020 season. Well, tonight the NHL & NHLPA agreed upon terms of a memorandum of understanding of a CBA extension that will last until the 2025-2026 season. This new agreement adds an additional four years onto the current CBA which has two years left on it. Technically, this becomes a six year deal. The NHL players & NHLPA had the option to out of the most recent CBA on September 1st, 2019 but chose not to opt out of the agreement. It was a good sign of things to come as labor peace has been maintained here. Obviously, this is very good for hockey and sports considering Major League Baseball is having a rough and contentious time with their collective bargaining discussions between their two sides. I’m going to highlight what was addressed and agreed upon in this new agreement.

 

Critical Dates to Return to Play

One of the first things to come from this agreement are the tentative dates for the NHL’s restart. With this agreement, NHL training camps will begin on Monday July 13th. After a two week training camp, teams will then travel to their hub cities on July 26th. Finally, on August 1st will be the start of the qualifying round. These dates are highly important to the 2019-2020 season and when the NHL season will resume. Training camp will be very important to keep an eye on leading up to when the teams travel to their hub cities. If things don’t go well before traveling to such said hub cities, it can throw a big wrench into the return to play plans. The league and players association will have to think about delaying the restart of the season or canceling it all together. Keep your fingers crossed here that all involved stay safe, healthy, and are able to finish up the season and hand out the Stanley Cup.

 

Opt Out

As mentioned in my article this morning, the players have the ability to opt out of the NHL’s return to play format. If individual players don’t feel comfortable with resuming the NHL season, they can opt out of playing without facing any penalties or discipline. Like I said, it’s the right thing to do as not everyone is comfortable with playing or is medically able to play. Good call here on both sides.

 

Playoff Share of Money

The normal playoff bonus pool is normally sixteen million dollars. However, it’s been doubled to thirty-two million dollars. Any player on a team that loses in the qualifying round (best of five games) will receive a $20,000 bonus. Players will see increases in their bonuses the longer their team is in the playoffs. The team that wins the Stanley Cup will see a share of $240,00 per player. I like that this pool of money is doubled as many are putting their healthy and safety on the line. Again, good call here on both sides agreeing to this.

 

Salary Cap

The NHL’s upper salary cap limit will be kept at $81.5 million for the 2020-2021 season and will remain that way until Hockey Related Revenue (HRR) returns to 4.8 billion dollars. The $4.8 billion was the number projected for the 2019-2020 season until the coronavirus pandemic hit. After HRR rebounds to what it once was, the upper limit will then be recalculated using a brand new formula that relies on HRR from two seasons ago as well as the projected HRR from the prior season. I agree with how the cap is being handled. If the cap was lowered, it would certainly put most of the teams in salary cup trouble. Both sides worked together on this to help keeping things a float during this pandemic.

 

Olympic Participation

The players and most fans have been wanting NHL players to go back to the Winter Olympics since the NHL stopped allowing them to go back in 2018. It looks as if the players are getting their wishes and dreams fulfilled of competing for a Gold Medal at the Olympics. NHL players will return to Olympic action in 2022 as they head to Beijing and 2026 in Milan. There is still negotiations to be had between the NHL, International Olympic Committee, and International Ice Hockey Federation. Just to recall, the NHL stopped allowing the players to attend after the IOC stopped funding expenses, insurance, concerns of shutting the league down for a few weeks, player injuries, and the NHL not receiving any revenue for allowing their players to participate. Last winter, the IOC offered concessions to start funding player costs as well as looking at a new media partnership in media rights and branding with the NHL Once that is agreed upon, Olympic participation will be officially green lighted which I expect will happen at this point.

 

No Signing Bonus Limits

After discussions between both sides, it was decided together to leave the signing bonus system as it is. Apparently during negotiations, the NHL was looking to limit signing bonus to fifty percent. Obviously, both sides decided to leave things alone they way it was. Sometimes it’s just better to not fix things that aren’t broken.

 

Final Paycheck/Escrow

The players’ final paycheck from the 2019-20 regular season, which was deferred up until now, will now go towards repaying their debt to owners. The debt totaled to approximately $140 million dollars.

While players work to repay their debt to owners, players can’t pay more then twenty percent in escrow for the 2020-2021 season. Here is how the escrow percentage has been broken down over this new agreement:

2020-21: 20 per cent
2021-22: 14-18 per cent (To Be Determined)
2022-23: 10 per cent
2023-24: 6 per cent
2024-25: 6 per cent
2025-26: 6 per cent

Escrow has been one of the major concerns and frustrations from the players. They wanted this issue addressed and resolved. It sure looks like the owners were listening and addressed the players concerns. Artemi Panarin of the New York Rangers in particular was very critical of the NHL and it’s owners publicly on social media about this issue. I really liked how both sides worked together, actually listened to each other, and both sides made compromises to get what they both wanted from this process. Looks like Major League Baseball could learn a lesson here!

 

Salary Deferral

Players will defer ten percent of both their salary and signing bonuses for the 2020-21 season. It will then be paid back to the players in three installments from the 2023 season until the end of the CBA agreement which ends after the 2025-2026 season.

 

No-Trade/No-Move Clauses

There has been a modification to how no trade and no-movement clauses will work in the future. All NT & NM clauses will remain with the player that is traded. Also, even if a player is traded before the clause kicks in it will still remain and cannot be voided by any team involved.

For Example: Let’s talk about when the Montreal Canadiens traded defensman P.K. Subban right before his no-move clause started. The Nashville Predators, the team that traded for Subban, then voided Subban’s no-move clause. By doing this, it then made him eligible to be traded to the New Jersey Devils later on without his consent. In the new CBA, this won’t be allowed to happen anymore. This will make trading bad contracts that teams no longer want much harder to trade away. I actually like this as it forces teams to live with their mistakes and learn from them.

 

Minimum Salary

The NHL minimum salary will be increasing from the current $700,000 this season to $750,000 next season. The new league minimum salary is as follows:

2020-21: $750,000
2021-22: $750,000
2022-23: $750,000
2023-24: $750,000
2024-25: $775,000
2025-26: $800,000

Obviously, this is especially good for younger players starting out or veteran players at the end of their careers to make more money. More money is always a good thing!

 

No European Waivers 

Players that play in Europe won’t require waivers anymore to come back to the NHL. However, players must sign their NHL contract by Dec. 15th. If you remember, if a player played in Europe after the beginning of the regular season, waivers were definitely required. That will no longer be the case. For example, if you remember this scenario in particular that happened. The Calgary Flames attempted to sign Ryan O’Reilly (who was a restricted free agent and playing in the KHL at the time) to an offer sheet back in 2013 during the NHL lockout while he was holding out from the Colorado Avalanche. Had the Avalanche not matched, he would have been placed to waivers and the Avalanche most likely would have lost him to a waiver claim.

 

Miscellaneous

Rehab Choice/Post-Career Health Care Subsidy: Players under this new agreement are now allowed to rehab long-term injuries at a place or a city of their choice unless their club can provide proof that rehab will not be possible there.

 Players will also receive a $3,500 to $5,000 retirement health care subsidy.

 

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