[News] NHLPA rejects NHL's extension of CBA for Olympic participation offer

[spuzzum]

Originally Posted by shadowlord

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.

The pain, the pain. I do not know how I'll get by.

[shadowlord]

Originally Posted by spuzzum

The pain, the pain. I do not know how I'll get by.

I agree (and the article says as much), for the millionaires, it's not a big deal. That's probably why those at the higher salary-end vote for the escalator clause every year.

I think the issue is for the lower paid players, but even then, when you're losing $70k out of $500k league minimum salary; they still make much more than the average person.

[zukes]

Trying to get rid of escrow is the dumbest thing I've heard. As others have said, this is how to balance the money to make sure that they get to the even 50/50 split.

Losing a percentage of your pay cheque each week is much better than having to scramble to find money if the players end up overpaid at the end of the season. My understanding is that if they get the escrow money back, they are getting paid interest on it as well. It's money that I am sure they are not taxed on until and if they receive it. Plus if revenue exceeds expectations they all get bonuses. Tough life these guys have.

I am usually pro player, but if that is what this next lock-out or strike (you know it's happening) is about, screw them.

[GirlySports]

Originally Posted by Steveyoto

It's an honour I doubt you nor I will ever be in the situation to make that decision. Representing your country in the Olympics is an amazing opportunity that not very many NHLers would pass up. I doubt you would either if ever presented with such decision.

It's an honour yes and the players are always going for free.

They should not have to give up something for that honour. That would be like (i don't know)..the PGA Tour asking a golfer to give up some sort of exemption to play in the Ryder Cup.

Being a Calgary Flame and a professional is still priority #1.

[CaptainCrunch]

The question that they should be asking is when is Bettman going to retire, because we'll extend the CBA until then. Except for the first strike/lockout where the big teams said screw the small market and went behind Bettman's back to get a deal, he's pretty much bent the NHLPA over every time.

Because he has a one man veto and complete control over the owners he's calling the shots on what the league wants, its a one shot one kill plan.

I'm willing to bet that the memo just went out to the owners to start putting money aside for a war chest to get through a lengthy lockout.

We're heading to another lost season.

[photon]

Originally Posted by GirlySports

It's an honour yes and the players are always going for free.

They should not have to give up something for that honour.

They're not playing for the NHL for free, they're playing for themselves and their country for free. They're asking the NHL to disrupt their schedule so the players can take some time off to do something else. Not to mention the potentially significant financial risk; a serious injury to a player can impact a team's playoff chances or chance to win a cup. EDIT: There's also a fringe benefit of exposure for the NHL, so that should all enter into the negotiation.

Originally Posted by GirlySports

Being a Calgary Flame and a professional is still priority #1.

I wouldn't make assumptions about a player's motivations. Most players will play for multiple teams during their careers, but most players don't switch nationalities, and the opportunity to play for a gold medal may be just as meaningful or even moreso for some players.

[868904]

The way some of these guys manage their money, the escrow is probably better for them, but, brats will be brats, and the only bigger brats in the world then pro athletes are royalty.

[Parallex]

Originally Posted by zukes

Trying to get rid of escrow is the dumbest thing I've heard.

I don't think they want to get rid of escrow... they want to cap it. At what level I don't know but I would assume it's not zero.

Really the majority of escrow is caused by ownership spending more then the midpoint so it's not much of an ask. When you think about it all they want is for the owners to follow their own rules and accept the consequences when they don't.

[nfotiu]

Originally Posted by MacFlame

There has been labour "peace" in MLB because Fehr effectively castrated MLB during labour disputes.

MLB has a terrible system.

There was a time when baseball's system could be categorized as terrible. I think it's pretty decent now though. Most teams are financially healthy and making money. Lots of teams have a shot with good development from within their systems. Teams can keep their star players under team control into their prime. They have a good system of revenue sharing, luxury tax, and player control rules.

The NHL's current system leaves a lot to be desired, and it came with a lot of missed games. It's not a good system if it leads to lockouts with every re-negotiation either. And it is definitely not a fan friendly system by any means.

[FlamesAddiction]

Originally Posted by Parallex

I don't think they want to get rid of escrow... they want to cap it. At what level I don't know but I would assume it's not zero.

Really the majority of escrow is caused by ownership spending more then the midpoint so it's not much of an ask. When you think about it all they want is for the owners to follow their own rules and accept the consequences when they don't.

Yeah, there haven't really been any exact details yet. No point in jumping to conclusions.

Just for argument's sake regarding the 50/50 split. Why is 50/50 a fair deal for the players?

[TheoFleury]

Originally Posted by Parallex

I don't think they want to get rid of escrow... they want to cap it. At what level I don't know but I would assume it's not zero.

Really the majority of escrow is caused by ownership spending more then the midpoint so it's not much of an ask. When you think about it all they want is for the owners to follow their own rules and accept the consequences when they don't.

Then the owners/GMs will be restricted come July 1st, causing less big contracts to get handed out... which is supposedly most of the reason they use that escalator in the first place. They can't have it both ways, they either lose money after or before revenues are determined. Sounds like a classic case of wanting to have your cake and eat it too.

If they want escrow capped, the owners will likely come back and with a proposal that includes that along with a reduced portion of HRR going to the players to compensate. The NHLPA is being so transparent here, they clearly want to chip away at the foundations of the salary cap. Sounds like a battle they either give up or they accept another work stoppage as Bettman isn't letting anything compromise the salary cap/linkage.

[Oil Stain]

Originally Posted by FlamesAddiction

Yeah, there haven't really been any exact details yet. No point in jumping to conclusions.

Just for argument's sake regarding the 50/50 split. Why is 50/50 a fair deal for the players?

Why isn't it fair for the players?

[FlamesAddiction]

Originally Posted by Oil Stain

Why isn't it fair for the players?

I asked first.

[sureLoss]

The NBA escrow model was pointed out by LeBrun as something the NHL players want.

In the NBA escrow is capped at 10%. If it is determined that the players need to give up more than 10% because Basketball Related Income (BRI) is not meeting expectations, then the NBA takes up to 1% of BRI from the players benefit pool. Anything beyond that the owners are out of luck.

If that is what NHL players want, then it is obvious what the owners will push back with. Lower estimates of HRR so that they will never be on the hook for losing out if HRR fails to meet expectations.

[Oil Stain]

Originally Posted by FlamesAddiction

I asked first.

Well 50/50 is just a logical split if you are partners.

That's a pretty good split considering one side of the partnership assumes zero risk, while the other could potentially lose money.

[puckedoff]

Originally Posted by Parallex

I don't think they want to get rid of escrow... they want to cap it.

Well that's somewhat the same thing. I think maybe they want to get rid of escrow because they don't understand it.
That's the only thing that makes sense unless they actually think they would 'win' the next lockout, which would be wierd as they are 0-3.

[photon]

Originally Posted by FlamesAddiction

I asked first.

It's fair by definition cause that's what they were able to get in negotiation.

[TheoFleury]

Originally Posted by FlamesAddiction

I asked first.

Every time the players go down this path they get squashed, you'd think they'd get that by now. The only way they get more than 50% is if they give something else up, like last time when they relented on restricting the length of contracts. I'm sure they'd like 60% or 70% of the revenue but why should the owners agree? So they don't lose another year of hockey? They've already proven they are willing to do just that, and it affects the players far more with their careers being so short. The owners hold all the cards here and have ever since it was proven that shutting things down for a year had no negative impact on their business (other than the lost year of revenue).

[Parallex]

Originally Posted by TheoFleury

If they want escrow capped, the owners will likely come back and with a proposal that includes that along with a reduced portion of HRR going to the players to compensate.

Compensate? For what? They all agreed to the revenue split all the players are asking for is for the owners to get their own house in order so that less of their half of the split is withheld. Think of it this way... right now 100% of the onus to comply is on the players. They want ownership to share in that onus.

Escrow is by and large taken out because the owners spend more then they agreed to spend... the correct solution is for them to pay what they should be paying. IMO the appropriate response would be to counter by narrowing the distance between the floor, midpoint, and ceiling.

[TheoFleury]

Originally Posted by Parallex

Compensate? For what? They all agreed to the revenue split all the players are asking for is for the owners to get their own house in order so that less of their half of the split is withheld. Think of it this way... right now 100% of the onus to comply is on the players. They want ownership to share in that onus.

Escrow is by and large taken out because the owners spend more then they agreed to spend... the correct solution is for them to pay what they should be paying. IMO the appropriate response would be to counter by narrowing the distance between the floor, midpoint, and ceiling.

You will have me convinced if you can show me when escrow has ever caused the owners to get more than their share of HRR after it's all said and done. It sounds like the players want a system where they get their 50% no matter what but possibly more, while the owners get a maximum of 50% and possibly less. Doesn't seem equitable to me.