With September 15th fast approaching, it will be interesting to see if the players decide to opt out of the current Collective Bargaining Agreement. If the players choose to opt out before this deadline, it would effectively terminate the CBA at the conclusion of the 2019-2020 season, forcing the league and the players into negotiations for a new CBA one year earlier than anticipated and opening up the possibility of another work stoppage. One reason why the players might elect to go this route is to address the issue of escrow.
Each year, players have a percentage of their earnings diverted into an account, where it sits until the league figures out the balance owed to the owners to reach a 50/50 split of revenues. Escrow has not always been a problem in the NHL because at one point, players actually received these percentages back, with additional compensation.
Over the past four seasons, with the ever-rising salary cap, owners have been able to shell out larger contracts, which has complicated matters because revenues have not been able to keep up, which means the escrow has been distributed to the owners to achieve a 50/50 split, rather than being kicked back to the players, as has previously occurred. As you can imagine, this has caused a stir amongst the players. One such player is Chicago Blackhawks Captain, Jonathan Toews.
"I'm no financial expert." Toews told John Dietz, of the Daily Herald. "All I see is that I've signed a contract and to me, it is not exactly being honored. So I don't care what business you're in -- to me, that's kind of ridiculous. They've done a good job at making the players seem like the greedy ones in the past several lockouts, and I wouldn't be surprised if they tried to do it again. To me, it's pretty black and white."
Toews simply wants to be paid what his contract says he should be paid. I'm sure he's not the only one. Players lost 13.83% of their salary to escrow in 2015-2016. That number slightly decreased to 12.7% in 2016-2017. The final numbers for '17-'18 and '18'19 are not yet in.
Toronto Maple Leafs forward, Jason Spezza, had an interesting take on the matter. "You have to look at it in a way where it's just a mechanism to create that 50/50 partnership," said the 36 year-old, who has experienced two lockouts already in his career. "Would it be a better system if there was no escrow and the cap didn't go up? I think it'd be a cleaner system for guys to understand. Now would guys be making less? Who knows? I'm not an economist."
The NHL could have opted out of the current CBA by September 1st, but Commissioner Gary Bettman issued a statement on August 30th, alerting players that the league did not intend to do so. "In any CBA, the parties can always identify issues they are unhappy with and would like to see changed," he said. "However, our analysis makes clear that the benefits of continuing to operate under the terms of the current CBA -- while working with the Players' Association to address our respective concerns -- far outweigh the disruptive consequences of terminating it following the upcoming season."
It goes without saying that everyone is eager to see how the NHPLA responds.
Source: Daily Herald
