[Rumour] NHL offers Olympic participation in exchange for the NHLPA agreeing to extend CBA

[iggy_oi]

Originally Posted by Enoch Root

No they don't. Escrow is like a withholding tax - it ensures the players aren't overpaid.

League HRR is estimated, and the cap is set based on the estimate.

Then, once actual revenues are known, the difference, plus any overspending vs the midpoint of the cap, are calculated and adjust actual salaries. If there is a deduction, that amount of escrow remains withheld. The rest of the escrow - and if there is no deduction, then all of it - is returned to the players.

The players receive 50% of HRR, no matter what.

If you look at it in the sense that a player signs a contract in terms of dollars not a percentage of the cap they lose twice in my opinion. If they were scheduled to make $5M for the last season on a max contract(hypothetically) and paid 20% in escrow because the league didn't generate enough revenue, they would lose $1M in pay. Then when they sign their next contract, the cap would be lower so their earning potential would also be decreased. Meanwhile if revenues bounced back or exceeded expectations the following season the league would not be required to pay them over and above what their annual salary is in their current contract.

[Enoch Root]

Originally Posted by iggy_oi

If you look at it in the sense that a player signs a contract in terms of dollars not a percentage of the cap they lose twice in my opinion. If they were scheduled to make $5M for the last season on a max contract(hypothetically) and paid 20% in escrow because the league didn't generate enough revenue, they would lose $1M in pay. Then when they sign their next contract, the cap would be lower so their earning potential would also be decreased. Meanwhile if revenues bounced back or exceeded expectations the following season the league would not be required to pay them over and above what their annual salary is in their current contract.

If HRR were higher than expected, it is in fact possible for players to receive more than their contract. It works both ways.

Also, if most of the teams budgeted below the midpoint of the salary cap range, player actual salaries would end up being higher than their contracts.

It's quite simple: players get 50% of HRR. If total salaries (contracts) add up to more than that, then they are prorated down to adjust.

If the total of all contracts is less than HRR, they would be prorated up.

There is no negative, except a perceived one.

[iggy_oi]

Originally Posted by Enoch Root

If HRR were higher than expected, it is in fact possible for players to receive more than their contract. It works both ways.

Also, if most of the teams budgeted below the midpoint of the salary cap range, player actual salaries would end up being higher than their contracts.

It's quite simple: players get 50% of HRR. If total salaries (contracts) add up to more than that, then they are prorated down to adjust.

If the total of all contracts is less than HRR, they would be prorated up.

There is no negative, except a perceived one.

I don't think what you are saying is accurate, I may be wrong though. Someone can correct me if I'm wrong, but isn't it that the salary cap is based on 50% of HHR divided by the number of teams in the league? I've never heard that the players receive a "bonus" top up if teams didn't spend the full 50%

[Enoch Root]

Originally Posted by iggy_oi

I don't think what you are saying is accurate, I may be wrong though. Someone can correct me if I'm wrong, but isn't it that the salary cap is based on 50% of HHR divided by the number of teams in the league? I've never heard that the players receive a "bonus" top up if teams didn't spend the full 50%

Yes, if total salaries are less than the HRR, everyone would get bonused up on a prorated basis.

Total player salaries must equal 50% of HRR. That is the backbone of the CBA.

[Green Machine]

Originally Posted by iggy_oi

I don't think what you are saying is accurate, I may be wrong though. Someone can correct me if I'm wrong, but isn't it that the salary cap is based on 50% of HHR divided by the number of teams in the league? I've never heard that the players receive a "bonus" top up if teams didn't spend the full 50%

Nope, He is right. Escrow is merely money held in reserve to balance the books at the end of the year. They can't know what the actual HRR is until after completion of the season and need to withold money so that the league doesn't have to phone up 800 players asking for a cheque to fix the overpayment. If HRR exceeded expectations, the players would recieve all escrow back and any additional funds required to restore the 50-50 balance.

[iggy_oi]

How are the additional funds divided?

[getbak]

Originally Posted by iggy_oi

How are the additional funds divided?

They determine how much the players were underpaid as a percentage and every player gets a bonus cheque equal to that percentage of his NHL salary paid over the course of the season. Plus, they'd get all of their escrow money back with interest (although, once it was determined that the players were in line for a bonus, there likely wouldn't have been much money withheld for escrow).

[thefoss1957]

I think that the NHLPA would be fools to take the extension that includes the high escrow just so a small fraction of its members could participate in the Olympics (BTW...I despise all things about the Olympics...the politics, the corruption, the doping, the flag waving BS.)

[Resolute 14]

Originally Posted by iggy_oi

If you look at it in the sense that a player signs a contract in terms of dollars not a percentage of the cap they lose twice in my opinion.

Except you can't. The players know before they put pen to paper that the dollar value of their contract will be adjusted up or down as necessary to maintain the 50% HRR. Choosing to use selective ignorance does not mean the players have "lost" anything they were not entitled to in the first place.

If they were scheduled to make $5M for the last season on a max contract(hypothetically) and paid 20% in escrow because the league didn't generate enough revenue, they would lose $1M in pay. Then when they sign their next contract, the cap would be lower so their earning potential would also be decreased.

This is a little too simplistic. The reason why escrow tends to be as high during the season as it is is two-fold: First, the union keeps using the escalator clause that is designed to allow the parties to account for an expected rise in HRR as a salary cap inflator instead. Hard to feel sorry for the players when they shoot themselves in the foot like that. But more importantly, the cap system was designed with the idea that as many teams would be spending above the midpoint as below, and as such, 50% of HRR should be that midpoint. Since the reality is that most teams spend above, the dollar value of the contracts consistently exceeds the players' expected share. If revenues do not come in higher than predicted, that means they give back.

[iggy_oi]

Originally Posted by Resolute 14

Except you can't. The players know before they put pen to paper that the dollar value of their contract will be adjusted up or down as necessary to maintain the 50% HRR. Choosing to use selective ignorance does not mean the players have "lost" anything they were not entitled to in the first place.



This is a little too simplistic. The reason why escrow tends to be as high during the season as it is is two-fold: First, the union keeps using the escalator clause that is designed to allow the parties to account for an expected rise in HRR as a salary cap inflator instead. Hard to feel sorry for the players when they shoot themselves in the foot like that. But more importantly, the cap system was designed with the idea that as many teams would be spending above the midpoint as below, and as such, 50% of HRR should be that midpoint. Since the reality is that most teams spend above, the dollar value of the contracts consistently exceeds the players' expected share. If revenues do not come in higher than predicted, that means they give back.

They can still disagree with it and desire to negotiate it out of the CBA

Also given the fact that the salary cap has risen year over year I don't believe it is a reasonable argument to say using the escalator has been drastically exceeding the expected share of revenue

[Resolute 14]

Originally Posted by iggy_oi

They can still disagree with it and desire to negotiate it out of the CBA

Absolutely. They just can't claim they are losing something and expect to be taken seriously.

I don't see the players successfully negotiating linkage out of the cap without a major concession in return though.

Also given the fact that the salary cap has risen year over year I don't believe it is a reasonable argument to say using the escalator has been drastically exceeding the expected share of revenue

Getbak could likely explain better, but I believe the system is designed to account for many expected increases in revenues. The escalator is meant for additional gains that are expected but not accounted for in the formulas. The union does not use the clause for that purpose though. They use it to artificially inflate the cap and then hope revenues come in higher than predicted.

[iggy_oi]

Originally Posted by Resolute 14

Absolutely. They just can't claim they are losing something and expect to be taken seriously.

I don't see the players successfully negotiating linkage out of the cap without a major concession in return though.

When you think about the fact that the players lose whatever they could gain by investing that money and the owners gain interest, which likely is not counted in HRR, there is a loss to the players in it.

[Locke]

Originally Posted by iggy_oi

When you think about the fact that the players lose whatever they could gain by investing that money and the owners gain interest, which likely is not counted in HRR, there is a loss to the players in it.

Yes, but that revenue is not hockey related.

[calgaryblood]

This has probably already been mentioned but this is going to suck for all the players who got "lockout protected" contracts with bonuses for the potential lockout year.

[Locke]

Originally Posted by calgaryblood

This has probably already been mentioned but this is going to suck for all the players who got "lockout protected" contracts with bonuses for the potential lockout year.

Why? They're still getting their bonuses. They negotiated for a certain dollar amount and they'd get every dollar they would have otherwise gotten, just in a different manner.

What those players did was prudent. They're still getting the same money over the term of the contract.

[GirlySports]

Originally Posted by thefoss1957

I think that the NHLPA would be fools to take the extension that includes the high escrow just so a small fraction of its members could participate in the Olympics (BTW...I despise all things about the Olympics...the politics, the corruption, the doping, the flag waving BS.)

i love the olympics and absolutely agree with you

[Parallex]

Originally Posted by iggy_oi

When you think about the fact that the players lose whatever they could gain by investing that money and the owners gain interest, which likely is not counted in HRR, there is a loss to the players in it.

That's pretty much the only argument in their favor though. That's all they actually lose.

Although, I would actually only put partial blame on the players for having escrow so high. The inflator doesn't help but the owners (via management) constantly exceeding the mid-point is far more to blame. During the next negotiation, if they really want to reduce escrow, the players should propose either a cap on escrow or a more narrow difference between floor and ceiling.

[calgaryblood]

Originally Posted by Locke

Why? They're still getting their bonuses. They negotiated for a certain dollar amount and they'd get every dollar they would have otherwise gotten, just in a different manner.

What those players did was prudent. They're still getting the same money over the term of the contract.

If there's a lockout in any other year after their bonus, how would they still make the same amount?

A bonus just means they get the money up front before the lockout would take place so no they wouldn't get every penny they would have otherwise if there's a lockout.

Unless I'm mistaken the bonus still counts towards the salary. For someone like Gaudreau where the salary is pretty much the same throughout his contract it would make a difference.

[Parallex]

Originally Posted by calgaryblood

This has probably already been mentioned but this is going to suck for all the players who got "lockout protected" contracts with bonuses for the potential lockout year.

No it won't, if it's agreed to (and it won't) they'll still get everything they agreed to. It's just that all the new UFA's will get "lockout protected" contracts with bonuses for the new potential lockout year.

[calgaryblood]

Originally Posted by Parallex

No it won't, if it's agreed to (and it won't) they'll still get everything they agreed to. It's just that all the new UFA's will get "lockout protected" contracts with bonuses for the new potential lockout year.

Ok well I was thinking the contract would state the year they get that bonus and it can't be changed.