Quote:
Originally Posted by Locke
Yeah, I've been thinking the same thing. Something is missing.
What is the players' actual complaint in regards to escrow?
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I think this article explains it, although I'll have to read it again in more detail later:
http://nhlnumbers.com/2016/8/12/how-...ern-in-the-nhl
In the example given, a player who signed a contract for, say, $5 million/year, only gets $4.31 million with 13.8% escrow. If the escalator clause is activated by the NHL or NHLPA, then it goes down to $4.20 million.
That escrow account ensures that both the owners and players get their 50% of hockey-related revenue (HRR). At the end of the season, whichever group (players vs owners) didn't get 50% will receive the contents of the escrow. My guess is that, in reality, for most seasons, the amount in the escrow account ended up going to the owners (i.e. the players were getting more than their 50%, and thus were overpaid based on HRR-estimate which determines how much % was put into escrow).
The article then goes on to say that when the players activate the escalator, it increases the salary cap (duh), so teams can spend more on salary, but it doesn't increase HRR. Therefore, at the end of the season, even more of the escrow account is given to the owners to balance out the 50/50 split.
As a result, the escalator "takes" money out of the escrow account paid in by players on existing contracts to pay/allow for the increased salaries (as a result of the escalator) for free-agent players on newly signed contracts.
I hope I got that right. Feel free to tear this apart if it's incorrect.