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Report: “Make Whole” to be discussed today

Nov 7, 2012, 10:56 AM EDT

Fehr and players

CBA negotiations between the NHL and NHLPA are expected to resume sometime later this afternoon in New York, with the focus of the discussions reportedly on the so-called “make whole” provision.

The “make whole” provision was first introduced in mid-October when the league made its 50-50 offer to the union. It was intended to satisfy the players’ demands that all current contracts be paid out in full under a new CBA.

The NHL explained it this way:

The League proposes to make Players “whole” for the absolute reduction in Players’ Share dollars (when compared to 2011/12) that is attributable to the economic terms of the new CBA (the “Share Reduction”). Using an assumed year-over-year growth rate of 5% for League-wide revenues, the new CBA could result in shortfalls from the current level of Players’ Share dollars ($1.883 Billion in 2011/12) of up to $149 million in Year 1 and up to $62 million in Year 2, for which Players will be “made whole.” (By Year 3 of the new CBA, Players’ Share dollars should exceed the current level ($1.883 Billion for 2011/12) and no “make whole” will be required.) Any such “shortfalls” in Years 1 and 2 of the new CBA will be computed as a percentage reduction off of the Player’s stated contractual compensation, and will be repaid to the Player as a Deferred Compensation benefit spread over the remaining future years of the Player’s SPC (or if he has no remaining years, in the year following the expiration of his SPC). Player reimbursement for the Share Reduction will be accrued and paid for by the League, and will be chargeable against Players’ Share amounts in future years as Preliminary Benefits. The objective would be to honor all existing SPCs by restoring their “value” on the basis of the now existing level of Players’ Share dollars.

The problem the players had with the proposal is that future reimbursement was to be chargeable against the players’ share of revenue, meaning players would essentially be paying players to make it work.

Last week, however, it was reported that the league was willing to absorb some or all of the reimbursement. Which brings us to today, when the NHL will presumably explain its plan to the NHLPA.

The Globe and Mail’s James Mirtle has a good breakdown of the “make whole” provision, if you’re a big fan of math.

  1. islesjb - Nov 7, 2012 at 11:07 AM

    I was told no math would be involved

  2. blomfeld - Nov 7, 2012 at 11:47 AM

    Complete Nonsense !

    The owners will simply inflate their P&L’s with “phony or exaggerated” costs in-order to recoup anything that they’re supposedly offering to the players … or they’ll conversely “hide or understate” revenues … either way it doesn’t matter, as that’s in essence the “genius” of this revenue-sharing concept … at least from the owner’s point of view …

    Just sign the damn paper Fehr and let’s get on with the show here !

  3. id4joey - Nov 7, 2012 at 12:00 PM

    Homme! Down to nitty gritty now. We are getting close to a deal friends.

  4. fortwaynekomets - Nov 7, 2012 at 1:59 PM

    I’m not optimistic about anything until I read “players throw in the towel, NHL season starts Dec 5th”

  5. id4joey - Nov 7, 2012 at 2:51 PM

    What choice do the players have? Try to lose as little as possible, and lick your wounds.

  6. kilejo - Nov 7, 2012 at 3:34 PM

    Make Whole union go away. Babies. Greedy bastards.

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