NHLPA Defers Decision Regarding Response to Escrow Losses

An article by Larry Brooks in Saturday’s New York Post is reporting that the NHLPA held a membership-wide conference call on Friday in which the players essentially decided to defer a decision on how to handle upcoming crushing escrow losses until a verdict on this season is rendered, per a source who participated in the give-and-take.

As per the collective bargaining agreement, the NHLPA and NHL divide all hockey-related revenue evenly, 50-50. Sometimes, the combined salaries of all players exceeds their 50 percent share of revenue that season.

As a result the NHL and NHLPA withhold a percentage of player salaries, or escrow, during the season as a mechanism to ensure teams and players achieve a 50-50 split of hockey related revenue, per the rules set in the CBA.

The money taken from salaries throughout the year is pooled together in its own bank account. If the league’s share of revenue is below 50 percent at the end of the year, they take from the escrow pool to make up the difference, and anything leftover is returned to the players.

The New York Post reported on Thursday that the league has informed the union that cancelation of the season could mean a revenue loss of up to $1 billion. That would translate to approximate escrow losses of up to 35 percent per player.

If there is nothing the union can do about that, and it seems to be locked in by the collective bargaining agreement 50-50 partnership on hockey-related revenue, the players are sure going to want to hold next year’s number down as much as possible, which is why it is impossible to predict what that cap might be, and what the personnel fallout might be across the league.

It also was reported by Canada’s TSN that owners will hold another conference call Monday on league financial issues.

About Jon Sorensen

Jon has been a Caps fan since day one, attending his first game at the Capital Centre in 1974. His interest in the Caps has grown over the decades and included time as a season ticket holder. He has been a journalist covering the team for 10+ years, primarily focusing on analysis, analytics and prospect development.
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