Union: Proposal would produce $275.5M profit

Updated: December 16, 2004, 7:35 PM ET
Associated Press

NEW YORK -- The NHL Players' Association disputed claims by the league that the union's latest collective bargaining agreement proposal would generate severe losses.

Using a 3-year projection based on league numbers, the NHLPA said on Thursday that its offer -- which featured an across-the-board 24 percent salary rollback -- would produce a $275.5 million profit for teams as opposed to a $568.5 million loss, as stated by the NHL.

"That constructs a wholly misleading, illusory and unsupported picture of the NHLPA's proposal," union head Bob Goodenow said in a conference call.

The sides broke off talks Tuesday after a 3½-hour negotiating session in which each side rejected a proposal aimed on reaching a new deal and putting an end to the lockout that reached its 92nd day on Thursday.

Already, 430 regular-season games plus the 2005 All-Star Game have been canceled. With no new negotiating sessions scheduled, the NHL is coming close to becoming the first North American sports league to lose an entire season to a labor dispute.

Although no drop-dead date has been set, there figures to be only about a month of negotiating time left to save the season. The lockout during the 1994-95 season ended on Jan. 11 and allowed for a 48-game season to be played.

The NHL used a chart in its counterproposal on Tuesday that projected league revenues would go up 3 percent annually over the next three seasons while player costs would rise by an average of 12.1 percent.

By its calculations, the league figured to lose $71.7 million in the 2004-05 season, $183.9 million the following season and $312.9 in the third year.

"We stand behind the 3 percent average annual growth projection we used for our modeling, particularly for a business that will be coming out of an extended shutdown," Bill Daly, the NHL's chief legal officer, said in a statement Thursday. "We do not believe the union's public negotiation with the media warrants any further comment."

Goodenow said on Tuesday and reiterated during the conference call that the percentages used by the NHL were irrelevant.

He said that the league took its own forecast of 2004-05 revenue and increased that amount by only 3 percent, a figure 6.4 percent lower than the NHL's self-reported number of 9.4 percent. That is the amount of growth NHL said it had on an average basis the past 10 years.

In plugging those numbers in, the NHLPA claimed that its latest proposal would generate a profit of $58 million in the 2004-05 season and $91.5 million and $126 million in subsequent years.

"We are not saying that revenues will grow by 9.4 percent or player costs by 12.1 percent in the next few years," Goodenow said. "In fact, we believe the numbers from the last five-year, post-expansion era have far greater relevance. According to the league's own numbers, over the last five years on a per-team basis revenues have on average increased 7.8 percent while player costs have increased an average of 7.3 percent."

In using those figures, Goodenow said a $411.9 million profit would be produced instead of a $568.5 million loss -- a difference of $980.4 million from the league's projections.

"All we're saying is you have to compare apples with apples," NHLPA senior director Ted Saskin said. "Don't take a plug number of 12.1 percent in player costs, which were experienced during a time of rapid revenue growth in the '90s, and then ignore the revenue number from that same time period."


Copyright 2004 by The Associated Press

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