Board of Govenors Ratifies CBA
NEW YORK (JULY 22, 2005) -- The National Hockey League's Board of Governors today ratified the terms of the Collective Bargaining Agreement negotiated with the NHL Players' Association, ending a 310-day work stoppage, signaling a new era of cooperation and partnership, and ensuring the League will resume play for the 2005-06 season.
The six-year agreement, scheduled to run through September 15, 2011, may be reopened by the Players' Association following Year Four (2008-09).
The Players' Association also has the option to extend the agreement for one year at the end of the scheduled term.
The Collective Bargaining Agreement includes a completely revamped economic system under which, during the first year, total player costs of the 30 NHL Clubs will not exceed 54% of League-wide revenue. The calibration of the percentage in future years of the Agreement will be linked to a percentage of League-wide revenue, and could rise to 57% if League-wide revenue exceeds $2.7 billion.
No Club payroll for the 2005-06 season will be less than $21.5 million and no payroll will exceed $39 million -- including all salaries, signing bonuses and performance bonuses. Each individual player contract currently in existence will include a 24% reduction of NHL salary for every year of its term, and no individual player salary can exceed 20% of a Club's Upper Limit on payroll.
The economic system also includes provisions for enhanced revenue sharing.
Accounting of League-wide revenue will be monitored jointly by the NHL and NHLPA. In addition, the League and Players' Association have agreed to create several joint committees that will work together toward the advancement of the game in a variety of areas, including competition, broadcasting and marketing.
The new Agreement also creates, for the first time, a joint program dealing with the use of Performance-Enhancing Substances. Per the agreement, every NHL player will be subject to up to two "no notice" tests per year. The first positive test for performance-enhancing substances will result in a mandatory 20-game suspension without pay to the player. A second positive test would result in a 60-game suspension, and a third would result in permanent suspension; however, such a player would be eligible to apply for reinstatement after two years.
Other elements of the agreement:
COMPLIANCE BUYOUTS -- Clubs may buy out player contracts at no charge toward the Club's Upper Limit from July 23, 2005 to July 29, 2005 at 5 p.m., ET. A player who is bought out may not rejoin his old club during the 2005-06 season.
CONTRACTS FOR 2004-05 -- Contracts for the 2004-05 season have been eliminated.
ENHANCED REVENUE SHARING -- Enhanced revenue sharing will see clubs eligible for subsidies if they rank in the bottom half of League revenues and operate in markets of 2.5 million TV households or fewer.
ENTRY DRAFT -- The Entry Draft has been reduced to seven rounds from nine, beginning with 2005.
ENTRY-LEVEL SALARY -- The entry-level salary limit is $850,000 for 2005 and
2006 draftees and reaches a high of $925,000 for 2011 draftees. Entry-level performance bonus categories and thresholds have been revised.
MINIMUM SALARY -- The minimum salary has been increased from $185,000 under the previous agreement to $450,000 in 2005-06. It will rise to $500,000 in the final two years of the agreement.
OLYMPICS -- NHL players will participate in the Olympic Winter Games in 2006 (Turin, Italy) and 2010 (Vancouver); no All-Star Game will be played in Olympic years.
RENEGOTIATION -- Player contracts will not be re-negotiated, upward or downward, during their term.
SIGNING DEADLINE -- Restricted free agents who do not sign contracts by December 1 of a given year will be ineligible to play in the League for the balance of that season.
TRADE DEADLINE -- The trade deadline will be moved from the 26th day to the 40th day prior to the conclusion of the regular season. Presuming an April 18 conclusion to the 2005-06 regular season, the trading deadline would occur March 10.
TWO-WAY ARBITRATION -- Eligibility rules for Player Salary Arbitration have been modified and Clubs will now have the ability to elect Salary Arbitration for eligible Players.
UNRESTRICTED FREE AGENCY -- The age of unrestricted free agency remains 31 (with four accrued seasons of 40 or more games on an NHL Club's roster) for 2005-06. It will drop to 29 (with four accrued seasons) or eight accrued seasons --regardless of age-- in 2006-07. The following season, the age drops to 28 (with four accrued seasons) or seven accrued seasons, and falls to 27 (with four accrued seasons) or seven accrued seasons in 2008-09.
WAIVER DRAFT -- The Waiver Draft has been eliminated.