Escrow, Refunds, and Salary lost

[GGG]

The escalator only can ever account for 5% of the difference assuming HRR doesn't go down.

The biggest cause of this is the way the floor/midpoint/and cap are set up. If the average team spends above the midpoint Escrow is not returned. So when they get 12% withheld assuming flat HRR it would mean that teams on average spent 8% over the cap.

This could be easily solved by placing the cap at the midpoint and creating dividends instead of Escrow, rolling back existing contracts by the % drop in cap and everyone would be happier and every player would be getting the exact same amount of money.

[Enoch Root]

Originally Posted by iggy_oi

Does the percentage of how much salary is held back in escrow increase if they use the escalator?

Yes.

Players get 50% of HRR. Period.

But HRR isn't known until after the season. So it is estimated. And then the NHLPA has the choice of whether to apply the escalator (which they always do). And the greater the escalator, the more that needs to be withheld.

Escrow is the mechanism that ensures that players don't get overpaid - because history shows us that if you overpay people, they tend to not be very keen about giving it back. So escrow says: we will withhold a percentage of your salary until we know exactly what your salary should be. Then, if your actual salary is less than what was projected, we deduct the difference and give you your portion. If it is more, you'll get all of it plus a top up to get you to where you need to be.

But in the players' eyes, they see it as: I was supposed to get that money, but then I only got some of it. Because they don't understand how it works.

If I was a player, I would vote against the escalator every year. I want the cap to be lower so that teams don't overpay. I want to find out at the end of the year that my $3M is actually $3.1M, not $2.9M

But few seem to be able to grasp how it functions.

[photon]

Agree, calling it "lost" shows either a basic misunderstanding of math, or a deliberate attempt to give the wrong idea.

[cam_wmh]

This comes across as Donald Fehr's second salvo, leading to the PA opting out of the the CBA next fall. the first of course, being the Olympics

There won't be hockey for the 19/20 season.

[pseudoreality]

Originally Posted by GGG

The escalator only can ever account for 5% of the difference assuming HRR doesn't go down.

The biggest cause of this is the way the floor/midpoint/and cap are set up. If the average team spends above the midpoint Escrow is not returned. So when they get 12% withheld assuming flat HRR it would mean that teams on average spent 8% over the cap.

This could be easily solved by placing the cap at the midpoint and creating dividends instead of Escrow, rolling back existing contracts by the % drop in cap and everyone would be happier and every player would be getting the exact same amount of money.

Yes, the problem is teams spending to the cap and not the midpoint. I say the mid point should be the cap and teams can spend 10 to 15% above, but have to pay a luxury tax which is pooled 50/50 with players and owners like a reverse escrow. That way the rich teams can still over pay a little, but it will cost them.

[Parallex]

Originally Posted by pseudoreality

Yes, the problem is teams spending to the cap and not the midpoint. I say the mid point should be the cap and teams can spend 10 to 15% above, but have to pay a luxury tax which is pooled 50/50 with players and owners like a reverse escrow. That way the rich teams can still over pay a little, but it will cost them.

Yeah the escrow is mostly the owners fault. I say narrow the band (raise the floor and lower the ceiling) and institute a luxury tax on the amount over the midpoint. Then cap escrow at a reasonable number.

[#-3]

100% player caused so they have nothing to complain about, I've never understood why they would ever vote for the inflator when only about 1/4 of players are UFAs who benefit from the increase cap that off season. I think its bad advice from agents who have conflicting interests of showing they can get that big number every year.

[Aarongavey]

Originally Posted by Enoch Root

Yes.

Players get 50% of HRR. Period.

But HRR isn't known until after the season. So it is estimated. And then the NHLPA has the choice of whether to apply the escalator (which they always do). And the greater the escalator, the more that needs to be withheld.

Escrow is the mechanism that ensures that players don't get overpaid - because history shows us that if you overpay people, they tend to not be very keen about giving it back. So escrow says: we will withhold a percentage of your salary until we know exactly what your salary should be. Then, if your actual salary is less than what was projected, we deduct the difference and give you your portion. If it is more, you'll get all of it plus a top up to get you to where you need to be.

But in the players' eyes, they see it as: I was supposed to get that money, but then I only got some of it. Because they don't understand how it works.

If I was a player, I would vote against the escalator every year. I want the cap to be lower so that teams don't overpay. I want to find out at the end of the year that my $3M is actually $3.1M, not $2.9M

But few seem to be able to grasp how it functions.

The only players on the current Flames who should vote against max escalator if they are thinking of their own best interests are

Gaudreau
Monahan
Giordano
Frolik
Brouwer
Hamilton
Brodie
Hamonic
Stone

Pretty hard to win a vote against using the escalator if the vote on every team is 14-9 in favour of using the escalator

[Oil Stain]

Originally Posted by #-3

100% player caused so they have nothing to complain about, I've never understood why they would ever vote for the inflator when only about 1/4 of players are UFAs who benefit from the increase cap that off season. I think its bad advice from agents who have conflicting interests of showing they can get that big number every year.

If you look at NHL rosters it really looks like 50-75% of guys have contracts expiring in 1-2 years. I think its like this every year.

Lots of those guys will only have 3-5 years in the league. They should take every penny.

Escrow hurts the guys with 5+ year contracts the most. They are also the guys who can afford to lose the most so I don't feel bad for them.

[Weitz]

Originally Posted by cam_wmh

This comes across as Donald Fehr's second salvo, leading to the PA opting out of the the CBA next fall. the first of course, being the Olympics

There won't be hockey for the 19/20 season.

Yup. And if there is I imagine it will be a shortened season.

[Textcritic]

Originally Posted by Parallex

Yeah the escrow is mostly the owners fault. I say narrow the band (raise the floor and lower the ceiling) and institute a luxury tax on the amount over the midpoint. Then cap escrow at a reasonable number.

You are suggesting that escrow is in itself the problem. Since the CBA guarantees a fixed percentage of revenue to the players, then I don't see how the replacement of escrow with another mechanism does anything but change perceptions. In the end, neither the cap itself, nor luxury taxes or escrow percentages will have any effect on how much of the total the players receive.

This is what is so pointless and futile about the NHLPA's complaint—they negotiated for 50% of the total of HRR, and that is exactly what they receive each year.

[Parallex]

Originally Posted by Textcritic

they negotiated for 50% of the total of HRR, and that is exactly what they receive each year.

They also negotiated their individual contracts and they are NOT getting that. The players want to get what they signed for in their SPC and I don't blame them. More onus needs to be put on the owners to not spend above the projected revenue limiting the range they can exceed or undercut the midpoint and putting the finacial burden partially on the owners if they don't seems like a reasonable solution.

[Weitz]

Originally Posted by Parallex

They also negotiated their individual contracts and they are NOT getting that. The players want to get what they signed for in their SPC and I don't blame them. More onus needs to be put on the owners to not spend above the projected revenue limiting the range they can exceed or undercut the midpoint and putting the finacial burden partially on the owners if they don't seems like a reasonable solution.

Yes, fully knowing they only get 50% HRR...

[Parallex]

Originally Posted by Weitz

Yes, fully knowing they only get 50% HRR...

Yes... So? Owners are overspending and as a result players aren't getting what the signed for. So fix the overspending and everyone's happy.

Well...except GM's they lose margin for error in their job and will have a harder job but whatevs they ought to get better too.

[theinfinitejar]

Originally Posted by Parallex

Yes... So? Owners are overspending and as a result players aren't getting what the signed for. So fix the overspending and everyone's happy.

Well...except GM's they lose margin for error in their job and will have a harder job but whatevs they ought to get better too.

By definition they can't overspend. 50% of HRR no matter what.

[Jay Random]

Originally Posted by Parallex

Yes... So? Owners are overspending and as a result players aren't getting what the signed for.

Owners are spending what the CBA allows them to spend, as agreed to by the players. The players' contracts are subject to the CBA, as agreed to by… the players. They're getting exactly what they signed for – if you bear in mind that they signed two contracts, not one.

[Hockey Fan #751]

Originally Posted by cam_wmh

This comes across as Donald Fehr's second salvo, leading to the PA opting out of the the CBA next fall. the first of course, being the Olympics

There won't be hockey for the 19/20 season.

Isn't it the 2020-21 season? With the opt out having to come in September 2019.

[Weitz]

Originally Posted by Hockey Fan #751

Isn't it the 2020-21 season? With the opt out having to come in September 2019.

If they opt out there is no CBA so they won’t play 2019-2020 is my understanding. You can be assured one of them will opt out. The question will be how much talking and negotiating they do before then.

[sureLoss]

Originally Posted by Weitz

If they opt out there is no CBA so they won’t play 2019-2020 is my understanding. You can be assured one of them will opt out. The question will be how much talking and negotiating they do before then.

The current CBA will end in September 15, 2020 if the league opts out by September 1, 2019 or if the PA opts out by September 19, 2019, otherwise it will end in September 15, 2022.

The 2019 deadlines will trigger the CBA ending in 2020, so there will definitely be a 2019/20 season.

[Enoch Root]

Originally Posted by Aarongavey

The only players on the current Flames who should vote against max escalator if they are thinking of their own best interests are

Gaudreau
Monahan
Giordano
Frolik
Brouwer
Hamilton
Brodie
Hamonic
Stone

Pretty hard to win a vote against using the escalator if the vote on every team is 14-9 in favour of using the escalator

Based on what? Are you arguing that only players with a greater than average salary should vote no? Because you'd be wrong - anyone already under contract should vote no.