Revisiting the CBA Negotiations

Published on January 4, 2014 4:34 PM by dbo.

With time comes wisdom. In the months since I examined the CBA negotiations from both sides, little has been said publicly, but actions on both sides provide some indication as to what each side expects.

Update: Reloaded thoughts based on new information April 2014

The players have been clear they want their share increased, potentially returning to a percentage of revenue model. Currently player salaries consist of about 25% of a team’s expenses. Attaching themselves to revenue ensures that they receive proportionate increases as revenue increases, but creates an inflationary expense for teams as their revenues increase, so do their labour costs. The players, while avoiding any direct threat of action, have made it clear that they would consider a strike to achieve their position.

With the conclusion of the season, only a few contract renewals occurred before the expansion draft. This was expected as many teams left as many players as possible as potential free agents for the expansion draft. Since the draft, however, the number of contract extensions has been numerous. I expected, besides new signings, that existing players would not sign new contracts, whether they had years left on their contract or were set to become free agents Feb. 15, until more information about the owner’s position was known. Not signing extensions or new contracts until negotiations had progressed to a satisfactory point was one action that was available to the players before training camp opened to show their solidarity.

This makes me suspect the players have been told by their executive what to expect. In my guess at the player’s opening offer, I included a clause where existing contracts would get a 4% increase on remaining years. I included this to look after the membership who were under contract, I thought there was a small chance it would be in the initial offer and slim chance it would survive. Now I don’t believe it will be a consideration from the association.

Rather than broad increases as I predicted, the CFLPA, with its knowledge of the CFL operations, will focus on increases in the areas outside of the regular season salary — pension, pre and post-season pay, other benefits. An increased minimum salary and mandating that to practice roster players may be in their proposal. Of course, they will present their expectation for salary cap increases, perhaps as large as I initially guessed, perhaps not, in their opening position.

At the same time, the teams seem content on extending and signing players without knowing what the salary cap will be in 2014 (knowing it will be at minimum the same $4.4 million as 2013). This leads me to expect the league will be pushing for increased rosters and increased minimum salary. In a five year deal, they may propose a $200,000 increase in the first year, but $100,000/year in subsequent years. More money may be thrown at the players in the post-season and pre-season as well, but my sense is that a $200,000 increase in the first year and $100,000 in subsequent years, 4x and 2x the annual increases from the last CBA, will be the league’s generous opening offer. I think the players are committed to seeing the minimum salary be raised and with other increases in the pre and post season as well as other benefits, they can accept this.

Does this invalidate what I guessed previously? Yes, if the game allows, I’m changing my guess based on new information. I got pretty carried away with the money on the table and ended up with both sides not too far apart. Now the $10 million over 5 years from the league’s perspective looks ridiculous. $5.4 million in league-wide salary cap increases plus change (< $1 million) for other benefits seems more likely, and perhaps as the final deal, not the opening, for the league.

While my expectation is for increases to be immediate and in effect for 2014, it is possible that 2014 will offer the same annual increases as the last CBA, with 2015 targeted as the year for any large initial jump to be fair to teams and players if negotiations go long, possible based on prior history.

I expect that though the sides may have not met face to face, they have exchanged opening position outlines of their key points of discussion, if not detailed proposals. I would expect the two sides would be meeting face-to-face in January to present their positions and begin talks. If so we may hear some reports on proposal leaks or at least meeting schedules. Hopefully it doesn’t take until training camp to have an agreement worked out and go to a vote. It would be nice to have both sides satisfied and it complete before then so teams, players and fans know where things stand.

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Revisiting the CBA Negotiations was published on January 4, 2014 4:34 PM by dbo.

807 words.

This article is categorized under Finances and tagged with cba, compensation, finances and roster.