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NEGOTIATING THE THIN ICE

NHLPA

Preparation:

a) Information
1. We couldnt afford for another year of lockout as the image and brand value is
losing.

2. We decided to go in there and negotiate on multiple issues like:
- Salary cap
-Linking salaries to revenue

3. We agreed that the player salary was very high percentage of revenue compared
to other sports.

4. As we knew that a lot of players wanted to play irrespective of the cap , We
agreed to agree to a salary cap but not one as low as they proposed


b) Analysis - ZOPA for NHLPA
1. Team Salary Cap: $49million.
2. Salary Cap as percentage of revenues of NHL: 75%
3. Open to discussing term period and top team profit sharing.


During

a) Opening: We started off stating that we were looking for an cordial agreement since one
more cancelled season will affect all the parties

b) Information Confirmation:
We knew our starting points since we had the previous final offer and so information was
shared openly.

c) Value Creation:
Both sides tried to ensure that we will share the value so that all sides could be happy and
the hockey league will be continued

d) Anchoring
NHL anchored at 52% NHL revenue sharing, $40million team salary cap, and were open
as well to the period and share of revenue to be given to the lower teams.




NEGOTIATING THE THIN ICE

e) Concessions:
We were willing to drop the share of NHL revenue if they are willing to increase the
salary cap if their revenues will increase and if they will keep a separate independent
body to check their account books .


f) Result Vs Relations:
It was clear that both parties want to be maintaining a long term relationship. So we are
ready to share the value

After -

1) There will be an Independent body to check the accounts

2) Adjusting the salary cap so the player salary would be at least 58% of the league
revenues.

3) Every year if the revenues increase the player salary cap would increase by 2.5% each
year for the period of the contract.


4) Period of the contract is for 3yrs.

5) Team salary cap is agreed at $46million.

6) For revenue distribution the top 10 teams would contribute 5% of their revenues and from
this fixed pool a fixed sharing is done and the money is distributed equally to the bottom
15 teams