NEGOTIATING THE THIN ICE
NEGOTIATING THE THIN ICE
NHLPA
Preparation:
1. Information1. We couldnt afford for another year of lockout
as the image and brand value is losing.
2. We decided to go in there and negotiate on multiple issues
like:- Salary cap -Linking salaries to revenue
3. We agreed that the player salary was very high percentage of
revenue compared to other sports.
4. As we knew that a lot of players wanted to play irrespective
of the cap , We agreed to agree to a salary cap but not one as low
as they proposed
1. Analysis - ZOPA for NHLPA1. Team Salary Cap: $49million.1.
Salary Cap as percentage of revenues of NHL: 75%1. Open to
discussing term period and top team profit sharing.
During
1. Opening: We started off stating that we were looking for an
cordial agreement since one more cancelled season will affect all
the parties
1. Information Confirmation:We knew our starting points since we
had the previous final offer and so information was shared
openly.
1. Value Creation:Both sides tried to ensure that we will share
the value so that all sides could be happy and the hockey league
will be continued
1. AnchoringNHL anchored at 52% NHL revenue sharing, $40million
team salary cap, and were open as well to the period and share of
revenue to be given to the lower teams.
1. Concessions:We were willing to drop the share of NHL revenue
if they are willing to increase the salary cap if their revenues
will increase and if they will keep a separate independent body to
check their account books .
1. Result Vs Relations:It was clear that both parties want to be
maintaining a long term relationship. So we are ready to share the
value
After -
1. There will be an Independent body to check the accounts
1. Adjusting the salary cap so the player salary would be at
least 58% of the league revenues.
1. Every year if the revenues increase the player salary cap
would increase by 2.5% each year for the period of the
contract.
1. Period of the contract is for 3yrs.
1. Team salary cap is agreed at $46million.
1. For revenue distribution the top 10 teams would contribute 5%
of their revenues and from this fixed pool a fixed sharing is done
and the money is distributed equally to the bottom 15 teams
