Quote:
Originally Posted by Sylvanfan
I take it that the year 9 payment will count against overall NHL expenses that year vs overall revenue. If that's the case and every team had say 6 million in these non cap charge payments a year, it might have a minor effect on escrow. 5 years from now everyone is likely doing this and someone will become the NHL's one day getting deferred payments for a lot of years after they dtop playing.
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I imagine the present value of that bonus would be divided by the contract duration and that amount would be added to each year's salary for that year.
If it works like the MLB, the team would put the present value of each year in escrow within a year or two of the service year.
There is very little difference to the team and player in paying the player 7.4m/year outright than paying a player 6 million a year and putting 1.4m/year away in an account for later.
It's hard to see a big advantage to the teams in structuring it this way. It lets the player say he is making more than he is in real money. I think that was a factor in the Ohtani deal. If the player moves to a lower taxed jurisdiction after their playing career, the deferred money will be taxed at that rate. That was likely the primary factor in Ohtani's deal as it can get him out of some high California taxes.