Each NHL Team to get $5M From NHLPA Escrow

[Mackcanuck]

1 hour ago

@TSNBobMcKenzie: NHL and NHLPA yesterday officially signed off on final accounting of 2012-13 season, when clubs overspent cap by about $265M. So Each NHL club will soon get more than $5M from the NHLPA escrow fund. They've known for awhile they getting it, but it's now official.

NHLPA can't be happy about that

[Down by the River]

1 hour ago

@TSNBobMcKenzie: NHL and NHLPA yesterday officially signed off on final accounting of 2012-13 season, when clubs overspent cap by about $265M. So Each NHL club will soon get more than $5M from the NHLPA escrow fund. They've known for awhile they getting it, but it's now official.

NHLPA can't be happy about that

So NHL clubs overspend and the NHLPA pays for (part of) it?

[Dogbyte]

So NHL clubs overspend and the NHLPA pays for (part of) it?

Yeah I has having trouble with that too. I guess because the league overspent on salary the players got more than should have but ....

[touchable]

The CBA sets the percentage of league revenues that should go to the players. But there's no way to accurately predict revenues for an upcoming season, so the salary cap is set based on a "projected estimate", as was the case in 2012-2013.

This development is basically saying that the league revenues were overestimated, and as a result, the players got more than their agreed-upon share of revenues, and need to pay some of it back to balance the books.

[Dazzle]

Somewhere at home, Dan Ellis is complaining (privately) about how this situation has been causing him more stress than he had when he was in college.

#danellisproblems.

[Down by the River]

The CBA sets the percentage of league revenues that should go to the players. But there's no way to accurately predict revenues for an upcoming season, so the salary cap is set based on a "projected estimate", as was the case in 2012-2013.

This development is basically saying that the league revenues were overestimated, and as a result, the players got more than their agreed-upon share of revenues, and need to pay some of it back to balance the books.

Ah, okay, thanks. That makes more sense.

[poetica]

The CBA sets the percentage of league revenues that should go to the players. But there's no way to accurately predict revenues for an upcoming season, so the salary cap is set based on a "projected estimate", as was the case in 2012-2013.

This development is basically saying that the league revenues were overestimated, and as a result, the players got more than their agreed-upon share of revenues, and need to pay some of it back to balance the books.

This.

And to add to it: An agreed upon percentage of each players' salary each season is not paid out but is held in escrow, a kind of savings account. At the end of the season when actual HRR (most revenue minus some costs) is determined the league's accountants figure out how much players were collectively due, how much was already paid and from that determines who gets what from the escrow accounts. If owners had already collectively paid out all (or more) of the players share of HRR, they would get a refund of some or all of the money from escrow. If players were paid less than the full amount already, they get the money from escrow.

Escrow is a kind of built-in insurance to ensure that both parties get as close as possible to the actual agreed upon percentage.

[n00bxQb]

The CBA sets the percentage of league revenues that should go to the players. But there's no way to accurately predict revenues for an upcoming season, so the salary cap is set based on a "projected estimate", as was the case in 2012-2013.

This development is basically saying that the league revenues were overestimated, and as a result, the players got more than their agreed-upon share of revenues, and need to pay some of it back to balance the books.

It's actually based on the prior season's revenues with the exception of a new substantial source of revenue (i.e. new TV contract), which is why they're using a projected estimate for next season.