The NHL and NHLPA announced a signed memorandum of understanding on Monday on an all-encompassing string of bargained items, including a four-year extension to the Collective Bargaining Agreement and Phases 3 and 4 of the Return-to-Play plan.
The MOU must be ratified by both the NHL’s board of governors and NHLPA’s full membership to become official, possibly by close of business this week.
Both votes are expected to pass handily. A two-thirds affirmative vote is required from the BOG, while a simple majority is required from the NHLPA. The entire membership will vote on the package, including players from the seven teams that are not participating in the league’s restart.
TSN reported on the details of how the NHL plans to pull off a 24-team tournament in two strict ‘bubbles’ in Toronto and Edmonton.
Here is the framework of the new CBA, much of which was already reported on Saturday:
Critical Dates: Training camps are scheduled to open on July 13, with teams slated to arrive in the hub cities of Toronto and Edmonton by July 26, with games scheduled for Aug. 1. Absent of a COVID-19 outbreak that shuts down play, the Stanley Cup would be on track to be awarded in the first week of October.
The Alexis Lafreniere Draft Lottery sweepstakes is slated to be held on Aug. 10, with the NHL Draft to follow in mid-October. Free agency would take place in the fall for the first time in league history on Nov. 1.
Term: The new CBA will have a term of six years, ensuring labour peace through at least 2025-26. That makes it a four-year extension on top of the two that were already remaining. It can also be extended one extra year if the escrow debt from 2019-20 owing to owners exceeds $125 million at the end of the deal.
Salary cap: The salary cap’s upper limit will be frozen for 2020-21 at $81.5 million and remain there until hockey-related revenue returns to $4.8 billion – the amount projected for this 2019-20 season before the pandemic hit.
Once HRR rebounds to $4.8 billion, the upper limit will be calculated using a new formula that relies on the actual HRR from two seasons ago, plus the projected HRR from the immediately prior season.
Rookie pay bump: For the first time since 2005, rookies will be able to earn slightly more on their entry-level contracts. Individual performance “A” bonus maximums will increase from $850,000 to $1 million per year.
The new maximum any player can earn in any single year of his entry-level contract will be $3.925 million if all attainable bonuses are triggered.
No ‘ringers’ in playoffs: Draft picks such as Montreal’s Alexander Romanov, Minnesota’s Kirill Kaprizov and the Islanders’ Ilya Sorokin – all of whom played in the KHL this season – will be allowed to sign contracts that burn off the 2019-20 season on their deal, but they will not be permitted to play in the 24-team tournament.
This was a compromise made by the two sides, allowing players to financially benefit, while maintaining the integrity of the game as deputy commissioner Bill Daly said in May that it wasn’t in the league’s best interest to have ‘ringers’ to join teams for the most important games of the season.
Olympic participation: As reported, NHL players will participate in the 2022 Beijing Olympics and the 2026 Milan Olympics, pending negotiation with the IIHF and IOC.
No signing bonus limits: There will be no changes to the signing bonus system in the new CBA. During negotiations, the NHL was believed to have sought to limit signing bonuses to a maximum of 50 per cent of the total contract compensation.
Cap recapture limit: For all players subject to a cap recapture penalty, the maximum salary cap charge moving forward will be the players’ normal salary cap hit.
Example: If retired prior to the 2025-26 season, the Nashville Predators (the team that signed him to the deal and enjoyed the benefit of his cap hit being well below the actual dollars paid to him those years) were scheduled to be on the hook for a $24.6 million salary cap penalty.
Now, under the new terms of the CBA, that amount would be limited to Weber’s normal cap hit of $7.86 million in any one season – but it would continue to be charged for three full seasons until the cap ‘benefit’ is paid back.
This only affects a small number of contracts still active: (Chicago), (Washington), and (Minnesota), (Pittsburgh), (Los Angeles), and (Los Angeles).
Playoff share increase: The playoff bonus pool is doubling this season from $16 million to $32 million. A player on a team that loses in the best-of-five qualifying round will receive $20,000. Players in each round will see bonuses increase from there, with a share from the Stanley Cup winning team worth $240,000 per player.
After this season, the playoff pool is expected to return to $20 million for 2020-21.
Final paycheque: The players’ final paycheque from the 2019-20 regular season campaign, which had been deferred until this point, will go to repaying their debt to owners. That totalled roughly $140 million USD.
Escrow cap: While they work to repay their debt to owners, players cannot pay a higher escrow percentage than:
2020-21: 20 per cent
2021-22: 14-18 per cent (TBD)
2022-23: 10 per cent
2023-24: 6 per cent
2024-25: 6 per cent
2025-26: 6 per cent
Salary deferral: Players will defer 10 per cent of both salary and signing bonus for the 2020-21 season, which will be paid back to players in three equal instalments in 2023-24, 2024-25 and 2025-26.
No-trade/no-move clauses: All no-trade and no-move clauses will travel with the player in a trade, even if the player is traded before the clause kicks in.
Example: The Montreal Canadiens traded defenceman days before his no-move clause kicked in. The Nashville Predators, the team that acquired Subban, subsequently voided Subban’s no-move clause, then making him susceptible later to a trade to New Jersey.
Frontloaded variability limit: All new ‘frontloaded’ deals – any contract defined as which the player receives more compensation in the first half of the deal than the second half – will be limited to less than 50 per cent variability between the highest compensation and lowest compensation years.
Minimum salary: The NHL minimum salary is increasing from $700,000 this season to $750,000 next season. The new league minimum salary is:
Post-career health care subsidy: Players also received a $3,500 to $5,000 retirement health care subsidy.
Rehab choice: Players will now be able to rehab long-term injuries in a place or city of their choice unless their team can prove that rehab will not be possible there.
No European Waivers: Call this the Ryan O’Reilly Rule. Players who play in Europe will no longer require waivers to come back to the NHL, provided they sign their NHL contract by Dec. 15. Previously, if a player played in Europe after the start of the regular season, waivers were required. The Flames signed O’Reilly to an offer sheet in 2013 during the lockout while he was holding out from Colorado in the KHL; if the Avalanche had not matched, he would have been subjected to waivers and the Flames likely would have lost him.
Additional Points: 1) Players whose contract expires after 2020-21 are eligible to sign a contract extension that begins in the 2021-22 season three days after the new CBA is ratified.
2) Players on teams that are not participating in 24-team format, plus players who opt-out of participating, will be eligible to sign contacts outside of North America – but will not be able to return to the NHL for the 2020-21 season. Only players that wouldn’t be permitted to return for 2020-21 season are players who opt-out. Players on the seven teams not in the tournament, then sign outside of North America, would still be eligible to return next season if offered a deal.
3) Players that sign new contracts for 2019-20 to burn year may not be paid a signing bonus for 2019-20 and cannot be paid 2020-21 signing bonus until November.