[News] UPD: NHL and NHLPA are working on deal to amend and extend CBA until 2025

[iggy_oi]

Originally Posted by sureLoss

Not sure if they will be able to get more than the 50/50 split. The more likely outcome is that the players will push for HRR to be re-defined to include more sources of revenue.

Hypothetically their starting position would probably be to ask for both and hope to end up with either. My guess is if they end up with either it would be the latter.

Originally Posted by albertGQ

What sources of revenues do you think the PA can realistically request?

No way will the owners give them a piece of the expansion fee from Seattle.

With the Seattle deal being done it would be difficult to go back and try to get that. With that being said since the league is unlikely to expand beyond 32 teams if they were going to ask for anything it would probably be to have franchise relocation fees included.

[Enoch Root]

It astounds me that the players have a problem with escrow. They need someone to sit them down and explain that it is merely a mechanism that ensures that the total of all contracts actually equals 50%.

The reason that escrow is typically negative (a clawback) is because too many teams are paying players more than the midpoint of the salary band. In other words, the players are being overpaid. Escrow simply corrects that fact. Escrow ensure that the players get 50% of HRR, regardless of how much teams are paying them.

This should not be difficult for any high school level student to understand.

[jayswin]

Originally Posted by Enoch Root

It astounds me that the players have a problem with escrow. They need someone to sit them down and explain that it is merely a mechanism that ensures that the total of all contracts actually equals 50%.

The reason that escrow is typically negative (a clawback) is because too many teams are paying players more than the midpoint of the salary band. In other words, the players are being overpaid. Escrow simply corrects that fact. Escrow ensure that the players get 50% of HRR, regardless of how much teams are paying them.

This should not be difficult for any high school level student to understand.

Aren't a lot of them less educated than this, for all intents and purposes? They're pretty focused on hockey as teenagers.

[trublmaker]

Originally Posted by jayswin

Aren't a lot of them less educated than this, for all intents and purposes? They're pretty focused on hockey as teenagers.

they have access to lawyers, accts, agents etc that could easily explain this to them

[Enoch Root]

their moms could explain it to them, if need be

[OldDutch]

Originally Posted by jayswin

Aren't a lot of them less educated than this, for all intents and purposes? They're pretty focused on hockey as teenagers.

There is some truth to this. However, I think they suffer from something we all susceptible too regardless of education, manipulation.

[iggy_oi]

Originally Posted by Enoch Root

It astounds me that the players have a problem with escrow. They need someone to sit them down and explain that it is merely a mechanism that ensures that the total of all contracts actually equals 50%.

The reason that escrow is typically negative (a clawback) is because too many teams are paying players more than the midpoint of the salary band. In other words, the players are being overpaid. Escrow simply corrects that fact. Escrow ensure that the players get 50% of HRR, regardless of how much teams are paying them.

I don’t think the issue is that the players don’t understand how escrow works. I think the players just want to be paid what their contract states. I understand that the league wants their guaranteed 50% of HRR but I can also see why the players don’t feel as though it’s fair to have a percentage of their salaries being withheld because, as you said, the teams are spending too much money. The players have no control over how much a team decides to spend on salary above the cap midpoint, yet the players are the ones who are being forced to assume the financial risks associated with those decisions even if they play for a team that spends below the midpoint.

This should not be difficult for any high school level student to understand.

It also shouldn’t be difficult for anyone to understand why the players want to be paid what their contracts state. How many people do you know who have a portion of their salary withheld to safeguard their employer from their own potentially poor decisions? My guess is probably not very many.

[Major Major]

Originally Posted by Enoch Root

It astounds me that the players have a problem with escrow. They need someone to sit them down and explain that it is merely a mechanism that ensures that the total of all contracts actually equals 50%.

The reason that escrow is typically negative (a clawback) is because too many teams are paying players more than the midpoint of the salary band. In other words, the players are being overpaid. Escrow simply corrects that fact. Escrow ensure that the players get 50% of HRR, regardless of how much teams are paying them.

This should not be difficult for any high school level student to understand.

Is it possible that they are not the backwater uneducated morons that you're making them out to be and they just want a little more biscuit? It is a negotiation, no? Maybe their starting position is: "every dime an owner chooses to spend over the midway point is ours. Up to you guys if you want to or not."

I am mostly astounded at the arrogance of this take.

[simonsays]

Originally Posted by Enoch Root

It astounds me that the players have a problem with escrow. They need someone to sit them down and explain that it is merely a mechanism that ensures that the total of all contracts actually equals 50%.

The reason that escrow is typically negative (a clawback) is because too many teams are paying players more than the midpoint of the salary band. In other words, the players are being overpaid. Escrow simply corrects that fact. Escrow ensure that the players get 50% of HRR, regardless of how much teams are paying them.

This should not be difficult for any high school level student to understand.

While this is true, it would probably be for the best to change the cap structure. Lower the cap to the midpoint for contract purposes, now instead of signing for 5 mil and having 250k clawed back they'd be signing for 4.5m and having 250k added (rough maths, don't crucify me).



There are many ways that the players can negotiate their way out of escrow, but none of them are likely to leave them with any more money in their pockets at the end of the day/year.

[You Need a Thneed]

Originally Posted by simonsays

While this is true, it would probably be for the best to change the cap structure. Lower the cap to the midpoint for contract purposes, now instead of signing for 5 mil and having 250k clawed back they'd be signing for 4.5m and having 250k added (rough maths, don't crucify me).



There are many ways that the players can negotiate their way out of escrow, but none of them are likely to leave them with any more money in their pockets at the end of the day/year.

I suspect the new CBA will have a modified mechanism to get to 50/50.

Still Escrow, but repackaged to make it more predictable for the players. It shouldn’t be that hard to do.

[jayswin]

Originally Posted by jayswin

Aren't a lot of them less educated than this, for all intents and purposes? They're pretty focused on hockey as teenagers.

Originally Posted by trublmaker

they have access to lawyers, accts, agents etc that could easily explain this to them

Originally Posted by OldDutch

There is some truth to this. However, I think they suffer from something we all susceptible too regardless of education, manipulation.

This is kind of what I was thinking. "I'm, your agent here's my best explanation of it - you're getting screwed and let us fight for your best interests" - every lawyer ever.

[Stillman16]

Except most employers aren't required to share their profits with the workers, definitely not with guaranteed percentages!

Also, the PLAYERS kept using the escalator in the CBA, which pushed the cap up beyond revenue predictions, so they could get bigger contracts! Anyone could have told them this equals more escrow (most likely).

The escalator basically screws the current contract holders, in favor of the new contracts....

To minimize escrow, the escalator needs to be removed, and the total cap set BELOW expected revenue. This should negate escrow, and see players get an extra bonus after actual revenue is determined.

The calculation used to set each team's cap could be tweaked, to keep the player costs in line too. Setting it the way its been was too optimistic, thinking teams would average around the midpoint.

It needs to be set so the max cap for each team keeps the costs closer to the projected revenue.

[getbak]

I'm sure the players would love to keep calculating the cap the way it currently is but just do away with escrow. It would likely get them close to the 57% share of revenue they had at the end of the last CBA.

There's no way the league would ever agree to that.


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Realistically, I think the best they can hope for is a deal similar to what the NBA has. In the NBA, all salaries have 10% withheld for escrow. At the end of the season, they do the calculations and determine how much, if any, of the escrow money is kept by the teams and how much is returned to the players. If the amount held in escrow is not enough to cover the overpayment, the teams have to eat the rest of the difference. The players don't have to pay back any extra.

However, if the escrow in one season is not enough to cover the overpayment, the salary cap in future seasons may be kept lower to ensure that a similar overpayment won't happen again. In fact, if the escrow amount is getting close to the limit, the league can also keep the cap lower until there's a safe comfort-zone in place. On the other hand, if the cap is too low in a season and the players are paid a bonus on top of having all escrow money returned, they can also increase the cap above the prescribed amount for the upcoming season.

This site has a good breakdown of how the NBA CBA works: http://www.cbafaq.com/salarycap.htm#Q12


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The big difference between how the NBA and NHL caps are calculated is that the NBA sets its cap using 44.74% of projected revenue for the upcoming season. I believe this is done to account for the various exceptions and exemptions that allow teams to legally exceed the cap every year.

The NHL instead sets the midpoint of the salary range using 50% of the projected revenue and then tacks another 15% on top to calculate the cap (making the cap 57.5% of projected revenue). Then, people act confused as to why the players are paid way more than their 50% share of revenue.

Until they fix the math on how the cap is calculated, it will continue to be a problem.

[getbak]

If I was put in charge of creating the system for calculating the NHL salary cap and escrow system, the first thing I would do is change how the cap is set.

I would keep the formula for calculating projected revenue pretty much the same. I'd use a rolling 5 year average annual revenue growth as the escalator rather than a flat 5%. Plus, as they do now, any expected significant increases or decreases to overall revenue would be factored into the projection.

Once the projected revenue is calculated, the players' share and projected average team payroll amounts would be calculated the same as they are today. I would get rid of the concept of the "midpoint" of the salary range and change it to the projected average team payroll. In fact, I'd do away with a salary range altogether.

I would set the cap at 5% above the projected average payroll amount and I would have no preseason floor at all. The 5% number would be subject to annual review to ensure the cap is being set to an appropriate level above the projected average.

Under this new formula, the floor would be set at 75% of the projected average payroll (maintaining the 30% difference between the cap and floor that currently exists), but teams would not need to be compliant at the start of the season or maintain compliance during the season. A team would only need to make sure they were above the floor at the very end of the season. I would also give a team one exemption to the floor every 4 seasons. If a team is under the floor more than once in a four year period, they would have to pay all players who played for them in a season a bonus to bring the team total above the floor for that season.

One of the problems that currently exists is that teams need to be floor-compliant on day one of the season. Every team's payroll slowly creeps up as injuries and other roster moves happen throughout the season. As a result, a team that is barely above the floor on day one will be well above it after game 82. This is another thing that drives the overall total salaries higher, which ultimately just drives escrow higher.



Under this new formula, the amount withheld for escrow should be relatively small, possibly smaller than the NBA's 10%. The opportunities for gross overpayment just wouldn't be there. The numbers would also be subject to annual review by both the league and PA to ensure that things aren't getting out of hand.


In my perfect world, I'd also do away with using AAV for the cap hit on a contract and just make each season's cap hit the same as the player's salary + signing bonus.


Implementing this new formula would need a transition period where the cap would be frozen for a year or two until the cap calculated the new way caught up to the old cap value. If the change was implemented at the same time as the new US tv deal, it could potentially be done in conjunction with a significant cap increase (if the new deal is as lucrative -- relatively speaking -- as the other major leagues' new tv deals have been).

[Locke]

Originally Posted by sureLoss

Not sure if they will be able to get more than the 50/50 split. The more likely outcome is that the players will push for HRR to be re-defined to include more sources of revenue.

Great. Another lockout is coming then.

Originally Posted by Enoch Root

It astounds me that the players have a problem with escrow. They need someone to sit them down and explain that it is merely a mechanism that ensures that the total of all contracts actually equals 50%.

The reason that escrow is typically negative (a clawback) is because too many teams are paying players more than the midpoint of the salary band. In other words, the players are being overpaid. Escrow simply corrects that fact. Escrow ensure that the players get 50% of HRR, regardless of how much teams are paying them.

This should not be difficult for any high school level student to understand.

Well said, the problem is that there is no agreed upon pay scale which most Unions have, so some make more than others and escrow effects some more than others, so the squeaky wheel is getting the grease here.

[Weitz]

Originally Posted by iggy_oi

I don’t think the issue is that the players don’t understand how escrow works. I think the players just want to be paid what their contract states. I understand that the league wants their guaranteed 50% of HRR but I can also see why the players don’t feel as though it’s fair to have a percentage of their salaries being withheld because, as you said, the teams are spending too much money. The players have no control over how much a team decides to spend on salary above the cap midpoint, yet the players are the ones who are being forced to assume the financial risks associated with those decisions even if they play for a team that spends below the midpoint.



It also shouldn’t be difficult for anyone to understand why the players want to be paid what their contracts state. How many people do you know who have a portion of their salary withheld to safeguard their employer from their own potentially poor decisions? My guess is probably not very many.

They are paid exactly what their contracts state - the value relative to a 50/50 share of HRR.

[iggy_oi]

Originally Posted by Locke

Well said, the problem is that there is no agreed upon pay scale which most Unions have, so some make more than others and escrow effects some more than others, so the squeaky wheel is getting the grease here.

I don’t think the problem is the lack of a pay scale. Even with a pay scale in place salaries fluctuate between employees and from year to year. The biggest difference I can see in this CBA compared to most CBAs is that most CBAs protect the employees from the owners and the NHL’s CBA seems more geared towards protecting the owners from themselves. All players have the same percentage of their salaries withheld in escrow so I could easily see a player making the league minimum being as frustrated or more frustrated about having their salary held back because more GMs decided to overspend than to not. I can’t see the majority of players risking a lockout to appease the small “squeaky wheel” minority of the highest earning players in the league.

The escrow likely won’t be eliminated altogether without major changes to the way the cap is calculated so it’s also unlikely to be removed without a prolonged work stoppage, which both the players and the league obviously don’t want to go through. Personally I think the PA would probably settle for a fixed escrow amount like the NBA has. It doesn’t eliminate escrow but it would give them more certainty of outcome than they currently have and shift some of the financial risk to the owners.

[Resolute 14]

As has been mentioned, the escrow problem can be fixed in five minutes: Set the point where you expect 50/50 to be as the salary cap rather than the midpoint of the payroll range. Players not only get what, as iggy_oi oversimplified to "what their contract says", but will virtually always get a bonus. They'd be happier, even though they would collectively end up with the exact same amount of money.

[Textcritic]

Originally Posted by iggy_oi

I don’t think the problem is the lack of a pay scale. Even with a pay scale in place salaries fluctuate between employees and from year to year. The biggest difference I can see in this CBA compared to most CBAs is that most CBAs protect the employees from the owners and the NHL’s CBA seems more geared towards protecting the owners from themselves. All players have the same percentage of their salaries withheld in escrow so I could easily see a player making the league minimum being as frustrated or more frustrated about having their salary held back because more GMs decided to overspend than to not. I can’t see the majority of players risking a lockout to appease the small “squeaky wheel” minority of the highest earning players in the league...

It is more than a little naive to shift the entire blame for escalating top-end salaries on GMs who have "decided to overspend," while simultaneously ignoring the rather crucial role that players and player agents have played in the process. Salaries continue to escalate because players have wrested a tonne more leverage in their negotiating positions, and are singularly focused on maximizing their individual earning potential to the detriment of canibalising their lower-earning NHLPA counterparts. In other words, GMs pay exorbitant asks because the alternative is the greater of two bad options. GMs contributed to the problem, but also did so with a proverbial gun cocked and pointed at their heads.

[sureLoss]

The Hockey News is reporting that the Players' deadline might be extended to Jan 1 and that both sides are working on a deal to amend and extend the current CBA to 2025

https://thehockeynews.com/news/artic...-be-on-horizon

To assume this will lead to a new agreement would be putting the cart miles ahead of the horse, but there is legitimate reason for optimism that this will indeed lead to the league and the players to extending the current agreement and ensuring labor peace until the end of the 2024-25 season.

Here’s why: because the NHL and the NHL Players’ Association are reportedly already elbow-deep in negotiations. The league’s decision not to opt out clearly puts the ball in the players’ court, since they now have until Sept. 15 to make their decision on the matter. But a good number of signs point to the two sides agreeing to extend the players’ deadline by a couple of months, perhaps to Jan. 1. In the meantime, the two sides would continue to negotiate an extension to the current deal, one that would likely run three more years beyond the current 2022 expiry date.

Article also says the proposed plans on how to mitigate escrow will be released Tuesday.