NHL Season on Brink

A day that began with a conciliatory tone between the NHL and the players’ association ended with a rapid-fire exchange of angry letters and a gulf that seems narrow but could be deep enough to wipe out the NHL season.

After talks late Monday and an exchange of faxes on Tuesday, the league and the NHLPA remained only $6.5 million apart on their proposed salary-cap limits. However, each side indicated it would go no further, leaving the 2004-05 season hours away from cancellation.

NHL Commissioner Gary Bettman had set a deadline of 8 a.m. PST today to reach an agreement, and a news conference the league had called two days ago remains scheduled for 10 a.m. PST today in New York. Barring a dramatic breakthrough, the NHL will become the first major professional sports league in North America to cancel a season because of a labor dispute.

After the league late Monday agreed to remove the link between payrolls and revenues -- a move the union called “a significant move in the players’ direction” -- the union capitulated and agreed to a salary cap, contrary to its previous declarations and much to the surprise and concern of many of its members. Having cleared that hurdle, the two sides inched toward a resolution before halting early this morning. NHL executives worked at their midtown Manhattan offices until 1:30 a.m. EST.

“To be this close, they have to make a deal. It would be disgraceful to cancel the season,” said Mighty Duck forward Mike Leclerc. “If that happened, it would let down the fans, the players, everyone involved.”

Said New Jersey Devil forward Jeff Friesen: “We have to get the game going again, at this point. If we cancel the season, who knows if we will ever be able to recover.”

The NHL’s “final” offer set the salary cap at $42.5 million, plus $2.2 million in benefits.

“This offer is not an invitation to begin negotiations -- it’s too late for that,” Bettman wrote in a letter to union chief Bob Goodenow. “This is our last effort to make a deal that’s fair to the players and one that the clubs (hopefully) can afford. We have no more flexibility and there is no time for further negotiation.”

Goodenow responded by dropping his initial proposal of a $52-million salary cap to $49 million, with a luxury-tax scale that began at 25 cents on the dollar for payrolls between $40 million and $43 million and peaked at $1.50 per $1 for payrolls above $49 million. “We went further than the union has ever gone,” free-agent forward Travis Green said, “maybe further than I wanted to go.”

Eight teams last season had payrolls of $53 million or more. Factoring in the agreed-upon 24% across-the-board salary rollback, four clubs probably would still exceed that level.

A report commissioned by the league and issued a year ago found that clubs spent 75% of their revenues on payrolls. Bettman has promised owners he will achieve “cost certainty” to help stem a tide of losses they claim reached $497 million the last two seasons. The NHL’s revenues for 2002-03 were $2.1 billion.

“We cannot afford your proposal,” Bettman said in a letter addressed to Goodenow and sent late Tuesday night. “Our offer of earlier [Tuesday] was a $75 million increase over the offer we made [Monday]. I hope you will accept it, and that we can move forward and negotiate the myriad of other issues that need to be addressed.”

Bettman said if every club spent $49 million, compensation would exceed what the league spent in the 2003-04 season and exceed 75% of revenues. Goodenow derided Bettman’s claim as a “hypothetical fear” and signed off by saying, “You will receive nothing further from us.”

A source familiar with the negotiations grew more pessimistic as the day progressed. “If Gary stays on $42.5 million, the season will be canceled,” the source said.

A cancellation could set off a chain of unpredictable events. Bettman and his chief legal officer, Bill Daly, have acknowledged that declaring an impasse, unilaterally implementing labor conditions and recruiting replacement players is an option for next season, but that is sure to set off legal challenges and keep lawyers busy in the U.S. and several Canadian provinces.

In addition, clubs that accepted season-ticket deposits from fans would have to refund that money and persuade sponsors to remain on board until the NHL resumes -- whenever that may be.

“There’s too much to lose at this stage,” a source said. “They’re too close.

“Does it seem like it’s falling apart? Yes. But it would be ridiculous not to bridge a gap of $49 [million] to $42 [million].”

Should a settlement be reached this morning, a source said, the season probably would not start before March 1 because many side issues would have to be hammered out and put on paper. Those matters include arbitration, revenue sharing, entry-draft procedures, drug testing, and free agency.

The 28-game schedule Bettman mentioned last week would have to be redone, because it was predicated on a deal being put on paper last weekend. In addition, a settlement would create a frenzy of free-agent signings, with about 200 players not under contract. The Washington Capitals, for example, have only 10 players under contract, according to the NHLPA’s website. The Boston Bruins have 12, the New York Rangers have 13, Chicago Blackhawks have 15 and the Kings have 19 -- but the Ducks have 23.

Many players who have NHL contracts but signed with European teams would need time to return to North America.

Such problems are minor, though, in comparison with the damage a lost season might inflict. “A deal has to get done,” veteran winger Teemu Selanne said after working out at Disney Ice in Anaheim on Tuesday.

“We have agreed to a cap. They agreed to take out the linkage. We’re talking the same thing now. All it is now is agreeing on the right numbers.”

Foster reported from Los Angeles.

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(BEGIN TEXT OF INFOBOX)

Matter of time

NHL Commissioner Gary Bettman and the NHLPA’s Bob Goodenow traded offers Tuesday. The latest:

NHL OFFER: The league made a take-it-or-leave-it pitch of a $42.5-million salary cap. The league had bumped its salary-cap offer up from $40 million and gave the union until 8 a.m. PST today to accept.

* NHLPA OFFER: After agreeing to a salary cap, the union lowered its cap proposal from $52 million to $49 million. That was turned down by the league. In the counteroffer, teams would still be allowed to spend up to 10% above the threshold, but they would only be able to do it twice during a six-year term.

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Back and Forth

Excerpts from a letter sent Tuesday by NHL Commissioner Gary Bettman to NHL Players’ Assn. executive director Bob Goodenow:

... I know, as do you, that the “deal” we can make will only get worse for the players if we cancel the season -- whatever damage we have suffered to date will pale in comparison to the damage from a canceled season and we will certainly not be able to afford what is presently on the table. Accordingly, I am making one final effort to reach out to make a deal that will let us play this season.

We are increasing our offer of yesterday by increasing the maximum individual team cap to $44.7 million ($42.5 million in salary and $2.2 million in benefits). This offer is not an invitation to begin negotiations -- it’s too late for that.

This is our last effort to make a deal that’s fair to the players and one that the clubs (hopefully) can afford. We have no more flexibility and there is no time for further negotiation....

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From Goodenow’s response:

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.

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From Bettman’s subsequent response:

It was disappointing to receive the fax of your “final” offer....

If every team spent to the $49 million level you have proposed, total player compensation would exceed what we spent last season and, assuming for discussion purposes, there was no damage to the game, our player compensation costs would exceed 75% of revenues. We cannot afford your proposal.

Our offer of earlier today was a $75 million increase over the offer we made yesterday. I hope you will accept it.

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From Goodenow’s answer to Bettman’s response:

.... Based on your own calculations ... over 21 clubs are spending significantly less than your team payroll limit number of $42.5 million. I am at a loss to understand how you suggest your offer earlier today represents a $75-million increase when it only impacts the spending of nine teams!

You will receive nothing further from us.