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NHL CBA Outlook Grim, But It's Not 2004

Ted Starkey thinks there will be an NHL season this winter. Here's why.

June 22, 2012; Pittsburgh, PA, USA; NHL Commissioner Gary Bettman on stage at the 2012 NHL Draft at CONSOL Energy Center.  Mandatory Credit: Charles LeClaire-US PRESSWIRE
June 22, 2012; Pittsburgh, PA, USA; NHL Commissioner Gary Bettman on stage at the 2012 NHL Draft at CONSOL Energy Center. Mandatory Credit: Charles LeClaire-US PRESSWIRE

Eighteen years ago this past Sunday, the members of the Major League Baseball Players Association walked off the field for the last time that season, eventually causing the World Series to be cancelled for the first time since 1904.

While NHL fans are no strangers to the pains of labor wars - the league got the unenviable tag of being the first league to lose an entire season to a labor dispute back in 2005 - one of the major players that was part of the 1994-95 MLB strike, Donald Fehr, is now calling the shots for the NHLPA.

In just over one month's time on Sept. 15, the current NHL collective bargaining agreement will expire. Facing that deadline, NHL commissioner Gary Bettman made it clear to reporters last week that the league's owners have no interest in negotiating while playing a new season under the old CBA.

"The owners are not prepared to operate under this collective bargaining agreement for another season," Bettman said, according to the Sports Business Daily.

Fehr and the players' union made their first counter-offer to the league on Tuesday, and with the proposal came an "alternate view," in which the players' union said they offered to take a three-year cut in revenue to help the overall health of the 30 NHL clubs.

"We do believe that the proposal the players made today, once implemented, can produce a stable industry," Fehr said at a press conference Tuesday. "That can give us a chance to move beyond the recurring labor strife that has plagued the NHL the last two decades."

Flanking Fehr was Capitals star Alex Ovechkin, who attended the meeting with new teammate Wojtek Wolski. The two were part of a 23-player delegation to present the NHLPA's plan to the owners' representatives, which included Washington owner Ted Leonsis.

Now, it's no secret that there's an element of brinksmanship in sports labor negotiations, with billions of dollars at stake for both sides and either side having little incentive to settle before the CBA actually expires. Until the current CBA actually goes by the wayside, what comes before it tends to be attempts to judge the true will and resolve of their opponent.

And, with the NHL's CBA having the unfortunate expiration date of Sept. 15 - a relic of the days where the league would put on the international Canada Cup and World Cup tournaments - it just adds pressure to get the deal done quickly.

The NHLPA was beaten badly before finally agreeing to the cap in the 2004-05 lockout, firing former union head Bob Goodenow in short order, and eventually bringing in Fehr - one of the toughest negotiators around - to lead the union this time around.

For a league that is squarely looking at its fourth work stoppage in just 20 years, hockey fans are understandably weary and unnerved by the latest round of tough talk.

The NHL had a tremendous rebound after the 2004-05 lockout, with revenues reportedly increasing by 50 percent from 2005-06 to 2011-12, reaching $3.3 billion last season. And after the NBA suffered little fallout from their lockout this past winter, there seems to be a general sense among those who -- like Leonsis -- own NBA and NHL teams that the long-term damage of missing the first portion of the season would be minimal.

But it still is a risk for a league that has had more disruptions than any other major U.S. pro sport -- including baseball--over the last two decades.

For the teams themselves, it's mostly business as usual, as the Capitals are putting regular-season tickets on sale for the 2012-13 season -- 41 home games that might all be played or not -- on Friday. The Caps did cancel their annual convention due to the uncertainty of availability of their own players -- a lockout would preclude any current players from participating - but Washington's September exhibition game in Baltimore and three others scheduled for Verizon Center are still on the docket.

Unlike 1994 and 2004, when the Capitals were pretty open about the possibility of a lockout with their season-ticket holders, offering interest on deposits paid, ticket rebates or retail credit to retain ticket holders during the labor dispute, the guidelines hasn't really come up in communications - yet. Contacted Tuesday, a Capitals spokesman wouldn't comment on the team's plans for ticket holders in case of a potential lockout, although indicated it was "business as usual" until otherwise notified.

Of course, the threat of a season-ending labor dispute seems much less likely this time around.

One of the most common questions I've gotten in the last few months is what I thought about the chances for a lockout, and I'm fairly certain there will be a lockout of some length. The NFL and NBA didn't resolve their disputes until after the CBA expired and the lockout officially began, and the pressure really won't hit either side until real dollars begin to be threatened.

In the NHL's case, the lack of dispute over a salary cap will certainly reduce the threat of another winter without the NHL.

First of all, the important thing to remember in the 1994 and 2004 lockouts was the owners, who hired Bettman from the NBA in large part to bring the league's cap model to their own league. After the owners blinked before losing the entire 1994-95 season, settling with a CBA that didn't include a cap, the owners didn't blink in 2004-05, shutting down the season.

The cap, which certainly helped the bottom line of the owners - particularly the wealthy clubs who have a cap on player expenditures. As a result, Bettman was rewarded this past year with a salary that Sports Business Journal reported as $8 million - more than double his salary during the lockout season of 2004-05 and rivaling the salaries of some of the league's top stars.

The good news is the gulf between the two sides no longer includes the cap, which despite the players' offer, isn't going away anytime soon.

The big issue - like the NBA lockout of last season - is over the percentage of revenue the players will receive. While there will also be talk of revenue sharing, the primary dispute will center around what percentage the players take of total revenue.

Another big change this time around is the presence of the Winter Classic, a huge moneymaker for the league. With this year's set for Michigan Stadium with over 100,000 fans paying from $99 to $279 per ticket, the ticket revenue from that one afternoon in Ann Arbor rivals what some of the league's franchises pull in for an entire 41-game regular season.

The game is also a ratings leader for the league, the most popular regular-season game broadcast on NBC, and paired with an HBO lead-in series, "24/7."

To lose the Winter Classic would be a big dent in the NHL's bottom line and broadcast partners, so it seems unlikely a lockout would threaten the league's signature event.

So, while it appears evident that a lockout might indeed be on tap, it also is important to remember the doom-and-gloom nature of negotiations, and that the likelihood of an entire season wiped out is much less than it was 8 years ago.