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December 9, 2004 - NHL players union offers salary cuts to end lockout

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NHL players union offers salary cuts to end lockout

Knight Ridder Newspapers

(KRT) - In a stunning concession, attempting to end the 85-day lockout, the NHL Players Association proposed Thursday to slash existing contracts by a whopping 24 percent.

The offer, executive director Bob Goodenow said, would save the league $528 million over a three-year period while the entire comprehensive wage package would save the league $1.2 billion.

"This proposal is significant and substantial," Goodenow said. "It is not ephemeral. It doesn't disappear. It is very real. We touched on every one of their points. It's the basis for an agreement. If league decides it is not sufficient, then it won't be because we didn't try."

NHL commissioner Gary Bettman, who would not talk specifics, called the 235-page proposal "serious" but said he needed time to absorb it. The league will make a counterproposal Tuesday, he said, most likely in Toronto.

Thursday's union presentation at the league's Canadian headquarters lasted 90 minutes. The league then studied the proposal another 90 minutes.

"One aspect (the 24 percent salary rollback) of the proposal is very significant," Bettman said. "That element is a recognition by the union of our economic condition, but it is a one-time element. ... (It) is an essential ingredient in implementing any new system and getting our economics back to a level we can afford."

Bettman emphasized that the "systemic issues" had not changed and that no one should read "one way or another" that the offer will satisfy the owners' intention of implementing cost certainty (a salary cap).

"The pluses of today (are) that the union recognizes that the economics are out of sync and a willingness to give a rollback to bring them back into sync," Bettman said.

Under the six-year proposal, John LeClair's salary this year would go from $9 million to $6.84 million; Jeremy Roenick's would go from $7.5 million to $5.7 million and team captain Keith Primeau's from $4.5 million to $3.42 million. According to union figures, the Flyers' payroll would drop from $65,851,000 to $50,047,000 immediately.

"Everyone thinks we're being greedy," Primeau said. "If I have to give back X percent to make this deal work, then I'm OK with it." To guard against "misunderstandings," Goodenow presented a slide show to reporters Thursday night at a hotel, although Bettman objected to giving out any details.

Among the issues the proposal addresses:

A savings of $400 million in entry-level contracts over six years while reducing the money paid out to Group II free agents by $258 million over three years.

A payroll (luxury) tax offering a tiered system beginning at 20 cents on the dollar from the threshold point of $45 million to $50 million; 50 cents on payrolls between $50 million and $60 million; and 60 cents on anything above $60 million. The tax would increase if clubs exceed the payroll thresholds in successive years.

Union figures show the Flyers would owe $1.023 million in a luxury tax this season if the deal were implemented.

While the union's new offer guarantees hundreds of millions in real savings on existing contracts, Bettman said the luxury tax remains a problem.

"I still do not believe in a luxury tax," he said. The owners are still seeking a $31 million salary cap.

The proposal also addresses other contract issues:

Entry-level contracts would be capped at $850,000, down from $1.29 million from last June's draft.

Qualifying offers to restricted free agents would be scaled back so that players earning more than $1 million would not receive a raise. Those earning less would receive increases from 5 percent to 10 percent. Goodenow said the owners would save $95 million next summer on qualifying offers alone.

Salary arbitration for clubs. Teams could select one player each season and adjust his salary downward once during his career. The process could be repeated twice in any three-year period to other players.

Revenue redistribution (sharing) ranging from $65 million to $190 million. The union offered a formula taking money from revenue producers such as the Flyers, the Toronto Maple Leafs and the New York Rangers, and distributing it to poorer clubs. In Goodenow's example, Phoenix would be entitled to $8.9 million in revenue sharing this season.

"For negotiations (on new deals) and arbitrations, the new world now becomes 24 percent less," Goodenow emphasized. Free agency would remain the same - age 31.

Thursday's meeting came three months to the day when the league and union last negotiated.

The glimmer of hope is that for the first time in more than a year of talks, the league did not dismiss the union's proposal because it did not contain a salary cap, nor did it accuse the union of talking in a "different" language, as Bettman says.

The league's committee consisted nearly entirely of "hard-line" cap supporters - Calgary owner Harley Hotchkiss, Boston's Jeremy Jacobs, Carolina's Peter Karmanos and Nashville's Craig Leipold, the hawk of the group. The only non-cap proponent was New Jersey general manager Lou Lamoriello.

The union also asked the league to make a commitment to participate in the 2006 Turin Olympics, as well as the 2010 Vancouver Winter Games.