NHL, Players’ Union Prepare for Season After Reaching Settlement

The National Hockey League is back in business after a four-month labor dispute.

The NHL and its players’ union yesterday agreed on the framework of a new collective bargaining agreement that ends the lockout that began Sept. 16 and forced the cancellation of 625 games. No details of the agreement were disclosed.

The NHL, which had $3.3 billion in revenue last season, gave up about $1 billion to get the new 10-year deal that reduced the players’ share of the earnings from 57 percent to 50 percent, the New York Times reported without saying where it got the information.

“You’re just excited to get to play hockey again and to get to do what you really enjoy and have a passion for,” Shane Doan of the Phoenix Coyotes told reporters. “The sense was this was the best deal for us that was available.”

NHL Commissioner Gary Bettman appeared with union Executive Director Donald Fehr yesterday morning in New York to make the announcement after the deal was struck at 4:40 a.m. following a 16-hour bargaining session.

Bettman had said previously that an agreement had to be reached by Jan. 11, so the NHL could hold a one-week training camp and start a 48-game season Jan. 19. A schedule for the season has yet to be released.

“Hopefully in a few days fans will get to watching people skating, not the two of us,” Fehr said.

Latest Lockout

It was the second time in the past seven seasons that owners shut down the league following the expiration of a collective bargaining agreement. The previous lockout resulted in the loss of the entire 2004-05 season. It was the first year since 1919 that the Stanley Cup wasn’t awarded. In the 1994-95 season, an NHL lockout ended Jan. 11 and a 48-game schedule began on Jan. 20. Teams normally play 82 regular-season games.

The latest disagreement centered on how players and owners would split revenue that grew to a league-record $3.3 billion last season, up 50 percent from $2.2 billion in 2003-04. Under the previous agreement, players received 57 percent, or $1.9 billion, of league revenue.

“There wasn’t one player that wanted anything remotely like this to happen,” Doan said. “But at the same time you realize that it’s a business and as much as you don’t want it to be, it is and you have to deal with it.”

Scot Beckenbaugh, deputy director of the Federal Mediation and Conciliation Service, conducted the negotiations and had been working with the league and union since Jan. 2. Yesterday’s agreement was reached after the league offered a 300-page proposal two weeks ago and the union made a counteroffer a week later.

‘Good News’

“The good news extends beyond the parties directly involved,” George H. Cohen, director of the federal mediation agency said in a statement. “Fans throughout North America will have the opportunity to return to a favorite pastime and thousands of working men and women and small businesses will no longer be deprived of their livelihoods.”

Under the league’s offer, the limit of individual free- agent contracts was raised to six years from five years or seven years if a team re-signs its own player, the Associated Press reported, citing a person familiar with the document that it didn’t identify. It also offered to raise the salary variance from one year to another to 10 percent from 5 percent.

The proposal would run through the 2021-22 season, with both sides having the right to opt out after eight years, AP said.

Playing Overseas

During the lockout, many of the league’s top players, including Alex Ovechkin of the Washington Capitals, Pavel Datsyuk of the Detroit Red Wings and Ilya Kovalchuk of the New Jersey Devils spent time playing in Russia’s Kontinental Hockey League.

Before the start of the 2011-12 season, the average NHL player salary was $2.4 million, up from about $1.5 million at the start of the 2005-06 season.

In comparison, the average National Basketball Association player salary was $5.15 million, the highest among North America’s four major sports leagues, for 2011-12. The average salary for a National Football League player was $1.9 million, the lowest of the four leagues, with Major League Baseball’s $3.3 million average salary ranking second behind the NBA.

The lockout contributed to a 14 percent slump in Canada’s sport, performing art and heritage institution category in October to the lowest level since the last NHL disruption in 2005. The sector’s output of C$4.91 billion ($4.97 billion) was the lowest since May 2005 and down from C$5.72 billion a year earlier. Seven of the NHL’s 30 teams are in Canada.

Peter Swinburn, the chief executive officer of Molson Coors Brewing Co. (TAP), the NHL’s official beer sponsor, told the Canadian Press in November that it may seek compensation from the league for games lost. The brewer said Nov. 15 its sales in Canada dropped by as much as 9 percent in the first four weeks of the fourth quarter compared with the same period a year earlier.

To contact the reporter on this story: Nancy Kercheval in Washington at nkercheval@bloomberg.net

To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.net

NHL Commissioner Gary Bettman. Photographer: Bruce Bennett/Getty Images