Union Wants Lower Cap?

Discussion in 'The Business of Hockey' started by mooseOAK*, Dec 28, 2005.

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  1. mooseOAK*

    mooseOAK* Guest

    Hockey News Story

    The jist of it being that the players would sooner be paid less up front rather than paying money into an escrow account that could be used buy the owners during the season.
     
  2. Brain Hemorrhage

    Brain Hemorrhage Registered User

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    Why/how is escrow account money used in part to fund the NHL's revenue sharing program? I am not quite sure how that makes any sense at all...

    An escrow account by definition is managed by a third party, meaning the league should have no control over it.
     
  3. Captain Ron

    Captain Ron Registered User

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    You are correct. The Escrow money would not be used to fund revenue sharing until the conclussion of the season. When it is determined what percentage belongs to the players and what percentage belongs to the league. Only then is the revenue sharing money distributed.
     
  4. Brain Hemorrhage

    Brain Hemorrhage Registered User

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    So is thehockeynews.com columnist completely wrong in saying that it hurts light-spending teams?
     
  5. kdb209

    kdb209 Global Moderator

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    Correct. There is more details on revenue sharing and escrow in the Sticky Thread at the top of the BoH page ("Shedding Light on NHL Revenue Sharing"):

    http://www.hfboards.com/showthread.php?t=162356

    That thread quotes a Sports Business Journal article with details about revenue sharing:

    A lower cap will actually hurt the small market teams that receive revenue sharing. The second batch of revenue sharing is funded from any excess escrow funds at the end of the season. If the cap is lowered by $3M like the PA wants, the total league payroll will be reduced, and excess escrow dollars will then also be reduced - resulting in a smaller pot for revenue sharing.
     
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