JelloPuddingPop wrote: ↑Mon Jun 08, 2020 9:34 am
SKYO wrote: ↑Sat Jun 06, 2020 12:16 pm
nhl bidness -
“The league wants long-term stability.
The players want a cap on escrow, and word is that it is being considered. If the season does not resume, their hit would be 35 per cent. Even if there are games, they are looking at 27 or 28 per cent. I heard rumblings of a 20 per cent escrow cap over the next few seasons — others said they heard slightly less. A flat salary cap of $81.5 million for a few seasons is possible, too.”
Ok, this time of year has too much sun where I am - and it is likely bleaching my brain... but I don't understand how they can have a cap on Escrow - when it is tied to revenue? Isn't it in stone that it is a 50/50 split players/owners? So if for example they had a cap on escrow during this CBA, and Covid tanked revenue, the players would be capped at some percentage - say 20% as Elliotte stated - doesn't that make it such that the owners are taking a bigger hit to their revenue % then?? What am I missing?
It is a very bizarre system - escrow is to ensure the owners get the correct cut of revenue. Every year, owners are pushing the PA to raise the cap, because they want to sign more UFA contracts. This is with no regard to escrow/HRR's actual growth.
So, if the owners had their way, we'd probably be at a $90 million cap, with big contracts signed every July 1, and every player paying more and more into escrow because Cap Growth > HRR Growth. Then if you signed a deal 5 years ago, and escrow keeps going up, you're receiving less and less money on your contract because the owners want to sign The Next Contract.
But then, the PA has had the power to reject cap increases to reduce escrow, but they don't.
Its a true vicious cycle - owners have a cap to protect themselves but always push to increase it, players can reject cap increases to reduce escrow but always cave in to the owners.
What will capping escrow accomplish? Well, in this short-term COVID crisis I guess it'll mean the cap stays flat, rather than seeing it drop by 25% and putting every team out of compliance. But as Doc says, the players have to give something to get that - maybe they average HRR over 3 years to smooth out the curve, maybe they owners a bigger cut of HRR to re-pay the COVID years, maybe they give owners a couple World Cups with 75% of that revenue or something.
But I agree with you, capping escrow seems unnecessary as the players have the power to prevent escrow jumping up in normal times, they've just chosen not to exercise that power consistently.