Will there be another game played this season??

[Ted Hoffman]

The time now is added to the time home with families. They’ve been advised to return to their primary residence. It’s not a normal vacation, but guys at least aren’t on the road and away from their families. It factors into the equation.

We’ll see what happens, but if the pause is approaching a couple months in duration, you could argue they don’t need as long a summer break. I bet the bottom line for most players is trying to recoup at risk salary. That’s what I’d expect the NHLPA to prioritize. There was a suggestion of an improved relationship between players and owners. This is going to put that to the test.

The break now helps for prepping for any 2020 playoffs and the longer this break is, the more it helps for that. I don't know that it helps with possibly playing 11 months of hockey in a 12-month period, though. You're swapping the playoffs for the offseason and basically doing playoffs-regular season-playoffs. Knowing all the stories of guys who play through the playoffs with various injuries, that's a lot of banged-up bodies having to turn around for the regular season on short rest. More likely, you'll see more guys missing '20-21 regular season time rehabbing playoff injuries and then guys who have bumps and bruises basically get 4-5 weeks off before cranking it up again. I would expect you'll see further injuries in that scenario and we'll learn a lot about just how deep some teams' prospect pools really are.

I totally agree though that the #1, #2, #3, #4, #... focus for the NHLPA will be "recoup all the salary we can." They'll do it to their ultimate detriment as long as they can say in some fashion, "we got paid for all the games this season" even if they have to later fork 20% of the year's salary back to get to their share of HRR. Does that impact the relationship between the NHL and NHLPA? Only if (and yes, I expect this) the NHLPA asks the NHL to waive the 50/50 requirement in some fashion, especially if it also throws in "... and let us go to Beijing in 2022."

 

[Brian39]

For clarity, have you heard of any provision in the current CBA that would allow the owners to "claw back" any salary paid this season? I keep reading references to "making it up with escrow" but I am not aware of anything in the CBA that would allow the owners to ask players to return money they have already been paid this season in salary. It seems likely at the moment that all of the funds from players contracts that were escrowed (i.e. - held and not paid) would be forfeited by the players and that the owners would still come up short for their 50% of HRR. To my knowledge, the only way they can make that up is by reducing the cap for next season and/or holding a higher percentage of next season's players contracts in escrow until they've made up the difference. I'm not aware of a season in the salary cap era where the players didn't get a least some of their escrowed salary back after the HRR figure was certified, but we are breaking new ground here with the likelihood that this year's escrow amount will be insufficient to arrange a 50/50 split of HRR. Do you have any insight on this?

CBA Article 50.4(b) states that the total player share..."shall equal (i.e., shall never exceed nor be less than) the Applicable Percentage of HRR..." (bolded added by me). The word "shall" is about as unambiguous as you can get in contractual language. The use of the word "shall" without caveats indicates a clear desire by both parties that revenue be split exactly 50/50 no matter what.

CBA Article 50.4(c) goes even further than relying on the word "shall" by stating, "(i) Notwithstanding any agreement, circumstance, contract, argument of fact or law, or ruling in any arbitration, litigation, or other proceeding, and notwithstanding anything in this Agreement that may indicate to the contrary with the exception of the Transition Payments described in Exhibit 16-A, League-wide Player Compensation for a League Year shall equal (i.e., shall never exceed nor be less than) the Players' Share for that League Year. Any ambiguities in the language of, and any dispute concerning the operation or interpretation of, this Agreement, including specifically this Article 50, shall be resolved in a manner to ensure that League-wide Player Compensation for a League Year shall equal (i.e., shall never exceed nor be less than) the Players' Share for that League Year. (ii) No agreement, circumstance, contract, argument of fact or law, or ruling in any arbitration, litigation, or other proceeding may be permitted to have the effect of increasing or decreasing League-wide Player Compensation for a particular League Year to an amount that does not equal (i.e., that either exceeds or is less than) the Players' Share for that League Year.)" It is fully unambiguous that there is no circumstance that can cause the player's share to exceed 50%.

CBA Article 50.4(d)(iv)(B) and (C) discusses "catch-up payments" that may be necessary if escrow withholdings aren't sufficient to get the sides at 50/50.

The CBA is crystal clear that the players can't get paid more than 50% of HRR. Escrow is established as a way to accomplish this mandate, but there is nothing in the agreement to suggest that the NHL is just out of luck if the escrow withholdings aren't sufficient. The specific reference to "catch-up payments" further drives home that the NHL can require players to give money back if salaries still exceed 50% after escrow. The term "escrow" has become shorthand to describe the money players lose in order to accomplish the 50/50 split, but the reality is that it is just a mechanism to facilitate the contractual mandate that revenues be 50/50. There is no support for the idea that the league/teams wouldn't be entitled to 50% of HRR just because the amount held in escrow isn't sufficient to get there. Realistically, I think how that money gets back to the NHL will be negotiated along with next year's cap. I think most players would prefer for that money to "return" to the league via increased escrow withholdings next season rather than them having to directly cut checks back to the team.

If it does get to arbitration, the league will win. All of the language supports the notion that catch-up payments are authorized and that HRR must be split 50/50.

 

[Stupendous Yappi]

CBA Article 50.4(b) states that the total player share..."shall equal (i.e., shall never exceed nor be less than) the Applicable Percentage of HRR..." (bolded added by me). The word "shall" is about as unambiguous as you can get in contractual language. The use of the word "shall" without caveats indicates a clear desire by both parties that revenue be split exactly 50/50 no matter what.

CBA Article 50.4(c) goes even further than relying on the word "shall" by stating, "(i) Notwithstanding any agreement, circumstance, contract, argument of fact or law, or ruling in any arbitration, litigation, or other proceeding, and notwithstanding anything in this Agreement that may indicate to the contrary with the exception of the Transition Payments described in Exhibit 16-A, League-wide Player Compensation for a League Year shall equal (i.e., shall never exceed nor be less than) the Players' Share for that League Year. Any ambiguities in the language of, and any dispute concerning the operation or interpretation of, this Agreement, including specifically this Article 50, shall be resolved in a manner to ensure that League-wide Player Compensation for a League Year shall equal (i.e., shall never exceed nor be less than) the Players' Share for that League Year. (ii) No agreement, circumstance, contract, argument of fact or law, or ruling in any arbitration, litigation, or other proceeding may be permitted to have the effect of increasing or decreasing League-wide Player Compensation for a particular League Year to an amount that does not equal (i.e., that either exceeds or is less than) the Players' Share for that League Year.)" It is fully unambiguous that there is no circumstance that can cause the player's share to exceed 50%.

CBA Article 50.4(d)(iv)(B) and (C) discusses "catch-up payments" that may be necessary if escrow withholdings aren't sufficient to get the sides at 50/50.

The CBA is crystal clear that the players can't get paid more than 50% of HRR. Escrow is established as a way to accomplish this mandate, but there is nothing in the agreement to suggest that the NHL is just out of luck if the escrow withholdings aren't sufficient. The specific reference to "catch-up payments" further drives home that the NHL can require players to give money back if salaries still exceed 50% after escrow. The term "escrow" has become shorthand to describe the money players lose in order to accomplish the 50/50 split, but the reality is that it is just a mechanism to facilitate the contractual mandate that revenues be 50/50. There is no support for the idea that the league/teams wouldn't be entitled to 50% of HRR just because the amount held in escrow isn't sufficient to get there. Realistically, I think how that money gets back to the NHL will be negotiated along with next year's cap. I think most players would prefer for that money to "return" to the league via increased escrow withholdings next season rather than them having to directly cut checks back to the team.

If it does get to arbitration, the league will win. All of the language supports the notion that catch-up payments are authorized and that HRR must be split 50/50.

In the CBA language, the players are being treated as a single entity from year to year, but the specific members of that group change over time. Is there any requirement that ‘make-up’ payments would come from this year’s salaries? If a player retired after this season, a scheme to magnify the escrow next season as a catch-up mechanism for owners could punish young players who would have otherwise had bigger annual salary, and benefit the guys ending their careers.

I would think it makes little difference to the owners. Does the NHLPA object to this? The escrow mechanism seems to be an effort to take the money from the current year. What you suggested would shift the debt a year into the future. Most players would probably support that, but a few would be getting penalized that way.

 

[Brockon]

So, here's something that I hope someone better read into the CBA than me can clarify.

Do salary bonus payments like the ones paid to the Leafs big 3 have a portion deducted and placed in escrow?

Because if I'm the little guy making league min or on an ELC, and the players have to pay back the required money to restore the 50/50 HRR split and 3 guys getting cut 15 million dollar cheques on July 1st are making a similar contribution to mine because their salaries are only 700k (league minimum) when they all cashed 15 million on July 1st 2019 and will do the same on July 1st 2020... Words don't suffice to describe how angry I'd be.

 

[Brian39]

In the CBA language, the players are being treated as a single entity from year to year, but the specific members of that group change over time. Is there any requirement that ‘make-up’ payments would come from this year’s salaries? If a player retired after this season, a scheme to magnify the escrow next season as a catch-up mechanism for owners could punish young players who would have otherwise had bigger annual salary, and benefit the guys ending their careers.

I would think it makes little difference to the owners. Does the NHLPA object to this? The escrow mechanism seems to be an effort to take the money from the current year. What you suggested would shift the debt a year into the future. Most players would probably support that, but a few would be getting penalized that way.

To my knowledge , the CBA is not specific about any of the issues you raise. I think following the letter of the CBA, if this went to arbitration the arbitrator would rule that each individual player from this season is required to give back X% of his contract to the league within Y amount of time.

However, we are heading towards a major negotiation. Playing games beyond the expiration of the normal league year requires agreement from the NHL and the PA. Potentially shifting free agency dates requires an agreement between the NHL and PA. Coming up with a cap number outside the formula in the CBA requires an agreement between in the NHL and PA. The mechanism to get this years HRR split to 50/50 will almost certainly be a part of that negotiation, so it is very much up in the air how the NHL gets this money back from the players.

To try and answer your question about what the NHLPA thinks about it, I would guess that as a whole they would prefer deferring it to the future rather than cutting checks back to the league. Players on the cusp of retirement get a vote right now. They will absolutely vote for this money to come from increased escrow percentages in the next year+. Players not in the league now don't get a vote, so their opinion doesn't matter. Over the last couple CBA negotiations, the existing NHLPA membership has prioritized the interests of current members over the interest of future members. I don't expect that to change.

 

[Brian39]

So, here's something that I hope someone better read into the CBA than me can clarify.

Do salary bonus payments like the ones paid to the Leafs big 3 have a portion deducted and placed in escrow?

Because if I'm the little guy making league min or on an ELC, and the players have to pay back the required money to restore the 50/50 HRR split and 3 guys getting cut 15 million dollar cheques on July 1st are making a similar contribution to mine because their salaries are only 700k (league minimum) when they all cashed 15 million on July 1st 2019 and will do the same on July 1st 2020... Words don't suffice to describe how angry I'd be.

For the most part yes, bonuses are subject to the same escrow withholding requirements as salary.

The only caveat to this is that the percentage of paychecks that are held in escrow changes slightly every quarter. So all bonus checks are subject to Q1 escrow withholding rate. All paychecks for salary are subject to the escrow withholding rate of whatever quarter the league is in at the time the paycheck is issued. So bonus checks may be subject to a slightly different rate of escrow withholding than salary checks, but they are absolutely subject to escrow.

 

[Ted Hoffman]

So, here's something that I hope someone better read into the CBA than me can clarify.

Do salary bonus payments like the ones paid to the Leafs big 3 have a portion deducted and placed in escrow?

Yes, because all salary and bonuses are counted in the Players Share and thus are subject to escrow withholding. It may not be at the appropriate rate (I would guess it's whatever rate was last used in the prior season, or that there's some placeholder rate applied until the actual escrow rates are determined), but there is a process to ensure that the same percentage of escrow is withheld from all players.

 

[Ted Hoffman]

In the CBA language, the players are being treated as a single entity from year to year, but the specific members of that group change over time. Is there any requirement that ‘make-up’ payments would come from this year’s salaries? If a player retired after this season, a scheme to magnify the escrow next season as a catch-up mechanism for owners could punish young players who would have otherwise had bigger annual salary, and benefit the guys ending their careers.

I would think it makes little difference to the owners. Does the NHLPA object to this? The escrow mechanism seems to be an effort to take the money from the current year. What you suggested would shift the debt a year into the future. Most players would probably support that, but a few would be getting penalized that way.

Yes, ideally escrow for this year would be applied to players receiving checks for this year; it wouldn't be carried forward to future years. Will that happen? Ask the NHLPA if it's thought about how deferring withholding for this year will impact players in future years who didn't play this year. My guess: it's never crossed Fehr's mind (he's still worried about making the players whole for their contracts; he's really not wanting them to have to start writing checks out of their personal accounts to make up for a shortfall in escrow withholding and will probably fight to get any necessary extra withholding waived out of kindness of the hearts of the owners in exchange for ... well, nothing), and most players in this year's group won't care about how newer players have to pay for it. Something about being selfish applies here.