Escrow Question

Discussion in 'Fugu's Business of Hockey Forum' started by nyr7andcounting, Aug 12, 2005.

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  1. nyr7andcounting

    nyr7andcounting Registered User

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    I don't know if this has been talked about yet, I've never seen it though.

    We all know that a certain % of each players salary for each season will be kept in an escrow account. So let's just assume for this year it will be 10% of each players salary and that will have to go back to the owners in order to acheive 54%. My question is, how does that money get distributed back? Does each players 10% go back to the owner that paid him for that season? Does each players 10% go to the league and than the league decides which teams need the "refund" to break even? Or, does each players 10% go into a big pot which is than divided by 30 and given equally to every team?
     
  2. kdb209

    kdb209 Registered User

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    None of the above.

    The money goes into one big pot and at the end of the year the league distributes it to the teams based on their player costs, so that the net result is an across the board even percentage pay cut for all the players. Teams with higher payrolls will get a correpondingly higher escrow rebate. If the league deems that it needs to recapture 10% of player salaries through escrow, each team will get a rebate based on 10% of its player costs.
     
  3. GSC2k2*

    GSC2k2* Guest

    Actually, i would assume there wil be taken into account the fact that players making the league minimum will not receive a pay cut. Accordingly, the result will be that teams which have an inordinate number of minimum salary players will receive less than 10% (using your example).
     
  4. Optimist*

    Optimist* Guest

    Are you sure about this? Where did you find out?
     
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