I traded texts with a player on Thursday about the NHL's offer to extend the 2013 collective bargaining agreement by three years in exchange for Olympic participation, and he said what I think many players are thinking: Sure, he’d be interested in the offer if the league was also interested in capping escrow in some form.
The NHL, however, has zero interest in tweaking escrow -- a provision in the CBA meant to ensure that hockey-related revenue is split between the players and the franchise owners -- at this point, and perhaps never. It sees escrow as essential to making the 50-50 split work. But there’s no question that the NHL Players' Association is looking at its cousins in the NBA, where escrow is capped at 10 percent, and saying, "Why can’t we get that in the next CBA?"
What's the difference between the NHL and the NBA? There's a hard cap in the NHL and a soft cap in the NBA. Capping escrow in the NBA means that the players, in some seasons, can go over their revenue share. The NHL wants to keep a hard-cap system; 50-50 means 50-50, and not a dime less. That’s why the league has no interest in capping escrow. Folks, this is your battleground for the next hockey labor war: escrow.
World Cup deadline
The league’s offer to extend the CBA to 2025 is part of a larger international hockey game plan: It would cover two Olympics, two World Cups and two or three Ryder Cup-style events, plus potential regular-season games in Europe. The fact that it would cover the 2020 World Cup is of particular note. Both the league and the NHLPA currently have the right to opt out of the CBA in September 2020, when the next World Cup is tentatively scheduled to take place. I don’t think either side wants a repeat of September 2004, when a World Cup was held and then the lights went out on the NHL season as a labor war ensued.
Regardless of what transpires with the Olympics, my sense is that both sides want the 2020 World Cup to go off without a hitch since they’re equal partners in the tournament. According to the CBA, both sides must declare in September 2019 -- one year out from the World Cup -- if they want to opt out of the CBA in 2020. That’s way too late to leave things unsettled and wouldn't leave enough time for planning for a World Cup. The smart thing here would be for both sides to agree that by the end of 2018 they will have a sense, either way, about 2020.
Uh oh, Canada
One of the things that has really hurt players is the lower Canadian dollar the past few years. Because Canadian NHL teams have such a huge impact on overall hockey-related revenue, the lower Canadian dollar means lower revenues for those teams and thus limits the rise of the salary cap. In turn, the flat cap the past few years has butted heads with rising salaries and, hence, higher escrow payments. Players earned only 87.05 percent of their salary in 2014-15, forking over just under 13 percent to balance off the 50-50 split of revenues. The figures aren’t in yet for last season, but I can’t imagine they’ll be much better.
"What frustrates players is that they don’t really know what they’re actually earning from year to year from their salaries," said one industry source. Combine that with the fact that if you live in high-income-tax areas, such as anywhere in Canada or in states such asNew York or California, that’s more money out the door.
Which is one reason playing in Tampa or Miami is so appealing: There's no state income tax. And guess where else there’s no state income tax? Nevada. That’s going to be a big draw with some players for the expansion team in Las Vegas.