NHL Owners Impose Lockout as Malkin, Gonchar Head to Russia

The National Hockey League has locked out its players for the second time in seven seasons and All-Stars Evgeni Malkin and Sergei Gonchar already signed contracts to play in Russia during the work stoppage.

The players were locked out after the league and the NHL Players’ Association were unable to come to an agreement on a new labor deal before the midnight Sept. 15 deadline. NHL Commissioner Gary Bettman and NHLPA executive director Don Fehr had exchanged contract proposals during meetings in New York over the previous four days.

It’s the NHL’s third lockout in 18 years. The 1994-95 campaign was shortened to 48 games, while the 2004-05 season was canceled and the Stanley Cup not awarded for the first time since 1919. The 2012-13 season is scheduled to begin Oct. 11.

“This is a time of year for all attention to be focused on the ice, not on a meeting room,” the NHL said in a letter to fans yesterday. “The league, the clubs and the players all have a stake in resolving our bargaining issues appropriately and getting the puck dropped as soon as possible. We owe it to each other, to the game and, most of all, to the fans.”

Malkin, who won last season’s Hart Trophy as the NHL’s Most Valuable Player with the Pittsburgh Penguins, signed a deal to play with Russia’s Metallurg Magnitogorsk, according to the Kontinental Hockey League club’s website. Malkin, 26, had 50 goals and 59 assists last season.

Gonchar, a 38-year-old defenseman with the Ottawa Senators, also signed with Mettalurg. Both players can terminate the KHL deals and return to the NHL if the lockout ends. The KHL has limited its 26 teams to signing a maximum of three players each from locked-out NHL teams.

Compensation, Revenue

NHL deputy commissioner Bill Daly said in a Sept. 15 statement that neither the league nor the players was willing to move off of its last proposal. The sides are arguing over player compensation and revenue sharing.

“I’m sure we will keep in touch in the coming days and schedule meetings to the extent they might be useful or appropriate,” Daly said. “We are sorry for where we are. Not what we hoped or expected.”

The players’ union was prepared to meet two days ago prior to the deadline, said Steve Fehr, special counsel to the NHLPA.

“The NHL said that it saw no purpose in having a formal meeting,” he said in an e-mailed statement. “There have been and continue to be private, informal discussions between representatives of both sides.”

Owners’ Offer

On Sept. 12, owners offered players 47 percent of hockey- related revenue, with a loss of about $256 million in player salaries next year. The offer was one percentage point more than in their previous proposal, Don Fehr said. Under the latest deal, players received 57 percent.

The union’s Sept. 12 offer, according to Don Fehr, tied the players’ share to revenue growth, with the proportion decreasing as hockey-related revenue increased. Under the plan, should league revenue grow at the same rate as the past 10 years, the players’ share would decrease to 54.3 percent in the first year, then 52.5 percent, 52.0 percent and rise to 52.3 percent in the fourth year, he said.

Other contentious issues include salary arbitration and the length of unrestricted free agency.

The league’s total revenue, buoyed by a 10-year, $2 billion television contract with Comcast Corp. (CMCSA)’s NBC, swelled to an estimated record $3.2 billion last season from $2.2 billion in 2006, according to the NHL. The league hasn’t said how much of this year’s revenue is profit.

Before the start of the 2011-12 season, the average NHL player salary was $2.4 million, up from about $1.5 million when the agreement began at the start of the 2005-06 season.

In comparison, the average National Basketball Association player salary was $5.15 million, the highest among the U.S.’s four major sports leagues, for 2011-12. The average salary for a National Football League player was $1.9 million, the lowest of the four leagues, with Major League Baseball’s $3.3 million average salary ranking second behind the NBA.

The current collective bargaining agreement was reached after the 2004-05 season was wiped out.

To contact the reporter on this story: Erik Matuszewski in New York at matuszewski@bloomberg.net

To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.