Escrow??

Discussion in 'The Business of Hockey' started by trahans99, Sep 1, 2005.

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  1. trahans99

    trahans99 Registered User

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    This may be a dumb question but if the players salaries exceed the 54% threshold, does every player give back the same %?

    Example:

    If league revenues are 1.6Billion
    league salaries are 1.0billion = 62.5% does every player have to return 8.5% of their salary to the league or their teams?
     
  2. Captain Ron

    Captain Ron Registered User

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    From what I have heard a player has to make a certain salary (higher than league minimum) before escrow is withheld from their salary. That being said it would mean the big money players would stand to lose quite a bit depending on the escrow %.
     
  3. NotJT

    NotJT Registered User

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    Check out the latest Kevin Allen article, it suggests that though the cap is calculated on the previous years revenue the escrow / 54% number is based on the current years number.

    http://www.usatoday.com/sports/hockey/nhl/2005-09-01-cap-update_x.htm

    Read "Escrow Accounts to fill up" section
     
  4. braincramp

    braincramp Registered User

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    My understanding is that the escrow exists only as a hedge against the possibility that 54% of total league revenues will not be high enough to cover the already-contracted player salaries for that year. If league revenues are sufficient, the escrow will be paid out on a pro-rated basis to all players subject to the escrow. Any escrow monies not paid out are returned to teams, but not equally; there are revenue-sharing provisions.
     
  5. Captain Ron

    Captain Ron Registered User

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    That is the way I understand it to be as well.
     
  6. Tra La La

    Tra La La Registered User

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    So the Revenue sharing comes off the Top, of the escrow dollars?
     
  7. Captain Ron

    Captain Ron Registered User

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    A portion of the revenue sharing comes from the escrow money, yes. I think this is an attempt by the league to prevent the large market teams from collectively spending to the cap limit. Only to receive a good portion of it back in escrow refunds. The have-nots (small market teams) will have first dibs on the escrow money.
     
  8. kdb209

    kdb209 Global Moderator

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    There are two rounds of revenue sharing. The first comes from playoff revenues, TV money, and escrow funds and is designed to enable low revenue teams to spend to within $4M of the league wide 54% salary midpoint ($28.6M). The second comes from just escrow dollars and is designed to enable low revenue teams to spend up to the midpoint, however teams with a payroll over the midpoint are not eligible for this second round of revenue sharing. After revenue sharing, any excess escrow dollars are split 30 ways and an equal share is returned to all teams regardless of actual payroll.
     
  9. GSC2k2*

    GSC2k2* Guest

    The artilce is slightly off. It fails to take into account the fact that the 54% includes the $66 million in player benefits costs.
     
  10. garry1221

    garry1221 Registered User

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    the way i remember hearing about it, players are only GUARANTEED 85% of their salary. the other 15% goes into escrow. should the league's revenues surpass last year's ammount then the money is given to the players... should league revenues fall, the money is given to the owners. might be off on a couple things or my wording might not quite be right, but i believe that's the basics
     
  11. Captain Ron

    Captain Ron Registered User

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    That was actually speculation before the actual CBA came out. The escrow percentage has no limits. The league is suppose to update the actual percentage of escrow at 4 points during the season based on how much revenue is being collected.
     
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