NEW YORK -- The NHL will reportedly reject the latest proposal from the players' association that was meant to end the lockout and salvage the season.
Canadian sports network TSN reported Monday that NHL executive vice president Bill Daly told the 30 team owners the league will turn down the union's offer made last week that included a 24 percent rollback in salaries. TSN cited a memo from Daly to the owners.
The sides return to the bargaining table Tuesday in Toronto for the second time in six days after three months of silence. The NHL is expected to provide a counteroffer to the 236-page proposal made by the players.
"We believe the union's Dec. 9 CBA proposal, while offering necessary and significant short-term financial relief, falls well short of providing the fundamental systemic changes that are required to ensure that overall league economics remain in sync on a going-forward basis," Daly said in the letter dated Sunday, TSN reported Monday. "While the immediate 'rollback' of 24 percent offered by the union would materially improve league economics for the 2004-05 season, there is virtually nothing in the union's proposal that would prevent the dollars 'saved' from being redirected right back into the player compensation system, such that the league's overall financial losses would approach current levels in only a matter of a couple of years."
Daly also poked holes in the union's specific proposals, while alluding to the NHL's position, writing:
The 24 percent rollback amount was adequate but should be structured among players "in a more equitable manner";
The proposed entry-level system "can still easily be circumvented";
The changes to the qualifying offer system "certainly would not result in the savings of the magnitude projected by the union";
The salary arbitration alterations "would have very limited impact (if any) on a club's or league-wide economics ... We intend to reiterate our proposal to eliminate salary arbitration in our next offer to the union";
The luxury tax system demonstrates the union's "continuing objective to avoid at all costs placing meaningful restraints on a club's ability to spend excessively on player salaries";
The memo also questioned the motives behind the union's offer.
"We believe the union's offer was more about trying to unify the players and ensure player solidarity with what they would perceive as a very substantial proposal than it was about making a good faith effort to reach agreement with us ..." Daly wrote. " ... The union needed the 'rallying point' that it felt this offer would provide with the players to effectuate this strategy. Under this scenario, the union will likely (and quickly) break off negotiations."
Daly declined comment on the memo and wouldn't confirm its existence.
Lou Lamoriello, the New Jersey Devils general manager who is on the NHL's negotiating committee, had no comment other than to say "I'd rather just let things be and then wait until tomorrow."
Players and owners stayed apart from early September until last Thursday.
When the owners present their latest solution to end the 90-day old lockout, it could determine whether the NHL will become the first North American league to lose an entire season because of a labor dispute.
Ted Saskin, the NHLPA senior director, wouldn't respond to the TSN report.
"It would not assist the collective bargaining process to comment on excerpts from a leaked league document," Saskin said. "We will comment on the NHL's response to our proposal when it is finally delivered to us."
The NHL hasn't given the union an offer since July 21, when it presented six possible concepts to provide a framework for the league's first new collective bargaining agreement in a decade.
All six were formally rejected by the players on Aug. 17, and negotiations that followed over the next month failed to move the sides any closer to resolving philosophical differences.
Talks broke off Sept. 9 when owners turned down an offer, and the lockout was imposed a week later by commissioner Gary Bettman.
The league wants cost certainty, a system that will provide a direct link between revenues and player costs. The union says that is tantamount to a salary cap and unacceptable.
The union held that position in its offer made a week after it invited owners back to the table. The NHLPA's newest six-year proposal was built on six points, but none provided a connection between income and player salaries.
Even an immediate rollback of salaries for each year of every existing player contract might not entice Bettman and some hard-line owners to cut a deal without cost certainty.
"If they want to make general managers powerless to set a budget and decide what they want to do, and just have a budget set in New York that is supposed to apply to Toronto, Nashville etc., that's not going to fly with the players," Saskin said. "I know
that's not a recipe for a solution."
The proposal also contained a luxury tax; a revenue sharing plan; a lower cap on entry-level contracts and bonuses; and an offer to allow teams to take players to arbitration.
If Tuesday's offer by owners features a salary cap, the season could be beyond salvaging.
Ottawa Senators owner Eugene Melnyk reportedly told Bettman that the salary rollback offered by players isn't enough to end the lockout.
"It's not a solution," Melnyk, who pulled the Senators out of bankruptcy, told The Ottawa Sun. "It's a one-shot deal that doesn't work."
Information from The Associated Press was used in this report.