Today, Bob McKenzie revealed the share of escrow returned to players for the 2018-2019 season:
NHL and NHLPA have recently reached agreement on final numbers for Hockey Related Revenue (HRR) for the 2018-19 NHL season. Players paid 12.9% escrow for 18-19. They’ll be getting back a little more than 3%. The owners will get the balance of slightly less than 10%.
This story is always presented as one of escrow deductions, unhappy players and contracts that never pay out at face value. That’s just the effect, though; the cause is bad guessing by the league on future earnings. And the guess on the 2018-2019 revenue was a whopper of a bad one.
Here’s how the NHL works regarding the 50-50 split and the salary cap:
Sometime in June, the NHL sets a cap for each team based on their estimate of expected revenue growth over the current year’s actual figures, which they have in draft form by the summer. The NHL year is July 1 to June 30.
The NHLPA votes to inflate that salary cap by an amount up to 5%. The bigger the cap, the bigger the free agent signings, and this vote is usually a few weeks before July 1.
The final cap number is announced and then, before the new season starts, an escrow % is agreed upon between the NHL and the NHLPA.
Escrow comes off of every NHL players’ salary cheques for the entire season, and then it sits in a bank account, idling away, usually for almost a full calendar year.
After June 30, the NHL teams have to report their Hockey Related Revenue (HRR), as outlined in the NHL CBA to the league. The league assembles all those figures, confirms the various teams are doing it accurately and correctly (glances at Detroit), and figures out the total HRR that was actually earned. This legitimately takes a lot of time. And the NHLPA has to sign off on all of this as well.
The full HRR number is split 50-50, and if that 50% number is at or more than the salary cap projection, everyone is thrilled, and the players get all of their escrow back. Not only that, the owners have to top that up with some extra money. If the 50% number is less than the revenue estimate, only some of the escrow goes to the players with the rest going to the owners.
A full year after the hockey season ends, everyone has in their hands their fair share of their earnings from that year.
The players haven’t received more than their escrow amount back in ten years, and they have actually received very little of it lately. Travis Yost covered this last summer, and included this chart:
For 2019, then, that number is just under 10%, according to McKenzie. Not as terrible as some years, but still a far cry from the more reasonable numbers pre-lockout. This means that the guess the NHL made on the 2018-2019 salary cap was overly optimistic.
That season saw the NHLPA draw back from applying a big inflator as they had previously. Once bitten, twice shy:
#NHL and #NHLPA announce next season’s salary cap is set at $79.5 million. Could have gone up to as much as $82 million, players opted for 1.25% growth inflator this season.
So this bad guess is almost entirely on the NHL itself. No one can ever accurately predict the future, as we have now all learned in the hardest way, but the NHL has been giving glowing predictions for years, and failing to meet them.
Commissioner Bettman said the League is projecting revenue growth to be between 7 percent and 8.5 percent from last season to this season.
”We’re having healthy growth,” Commissioner Bettman said.
Bettman said that in June 2018, but just three months into the 2018-2019 season, that was already understood to be overly optimistic:
Second quarter escrow withholding rate increases from 11.5 to 13.5% in response to NHL’s downward adjustment of second quarter HRR, Post has learned.
It now seems that if they’d stuck with the 11.5% number, they would have just squeaked through without the players ending up owing back salary at the end of the season, but only just.
Players express their displeasure with this state of affairs by attacking escrow itself, not the revenue projections and the attendant poor growth in the NHL’s product that are the real culprits. Like most of us, they see the world through their own lens. GMs of wealthy teams chafe at the restrictions of the salary cap and want to spend, spend, spend. Fans want the cap abolished, and enthusiasts will tell you about luxury taxes for hours.
Everyone just handwaves away the reality that many NHL teams aren’t profitable with a salary cap, and could be totally nonviable without it. A reduced NHL makes less HRR, the cap goes down, the players make less, and teams struggle harder to pay for the players they want.
But underlying all of that is that Gary Bettman, in the Hockey Hall of Fame as a Builder, has been guessing wrong on how healthy the NHL’s growth is for a long time. No one is going to blame him for not foreseeing the asteroid that smashed a hole in the 2019-2020 HRR. Even if there is a resumption and a playoffs, the final accounting on this season won’t be pretty. But soon, the NHL’s job, in concert with the NHLPA, will be to guess about next year.
The ground they’re building from to make that guess has a big crater in it, and they have to largely disregard that. The other asteroid, the one labelled “severe economic recession”, hasn’t hit yet, but that will also make guessing next year’s revenue a difficult task.
Teams have players under multi-year contracts, and that entire system is built around the expectation that the salary cap won’t fall year over year. But what if it does? There’s a widespread, yet false belief that next year’s salary cap must be tied to this season’s real revenues. The reality is, the NHL will need to come up with a number that they have some legitimate hope of hitting, that won’t require an escrow of astronomical proportions, but will allow teams with a lot of salary already committed to keep operating successfully.
All the teams that make up the NHL need to be able to put the most exciting product on the ice next season they’ve ever produced. They need the biggest bounce-back year since that team came last, drafted first overall and made the playoffs the next season.
The NBC TV rights deal is up for renewal at the end of next season in the summer of 2021, and the NHL has been banking on that deal going way up. The expect the revenue jump to start a period of even healthier growth while the salary cap surges. So have individual players. All these short-term RFA deals happened last season for a reason. Their agents all expect the year after next to be the golden year with huge money for everyone and a big jump in the cap.
To get that golden year, the 2020-2021 season needs to be one where more goes right than goes wrong. If it doesn’t, the escrow bugbear will only get bigger in the players’ minds, and the next CBA might not appear quite as painlessly as it has seemed it might up until now.
No pressure, Gary, you just need to do a better job of setting the revenue projection and actually growing the NHL to achieve it than you’ve ever done before. Earn that spot in the Hall.
DETROIT (AP) — The Detroit Red Wings signed forward Lucas Raymond to an eight-year, $64.6 million contract Monday, completing a deal with one of their best young players less than 72 hours before training camp begins.
Raymond will count $8.075 million against the salary cap through 2032. The 22-year-old was a restricted free agent without a contract for the upcoming NHL season and was coming off setting career highs with 31 goals, 41 assists and 72 points.
The Red Wings have another one of those in defenceman Moritz Seider, who won the Calder Trophy as rookie of the year in 2021-22.
Detroit is looking to end an eight-year playoff drought dating to the Original Six franchise’s last appearance in 2016.
Raymond, a Swede who was the fourth pick in 2020, has 174 points in 238 games since breaking into the league.
PHILADELPHIA (AP) — Kirk Cousins led a flawless last-minute drive for Atlanta and connected with Drake London for a 7-yard touchdown with 34 seconds left to give the Falcons a 22-21 victory over the Philadelphia Eagles on Monday night.
Saquon Barkley dropped a short pass that stopped the clock with 1:46 left and forced the Eagles to settle for a field goal instead of a game-sealing first down. That was plenty of time for Cousins — especially against an Eagles defense playing soft coverage with a nonexistent pass rush.
The 36-year-old veteran, playing his second game since tearing his Achilles tendon last Oct. 29 while playing for Minnesota, shook off an uneven effort and hit Darnell Mooney for 21 and 26 yards on consecutive plays during the decisive drive.
Cousins found London on a short pass to his right for the tying score, and Younghoe Koo put Atlanta (1-1) on top with a 48-yard extra point after London was flagged for unsportsmanlike conduct. The go-ahead drive took just 65 seconds.
Jalen Hurts had his final pass intercepted by Jessie Bates III to seal Atlanta’s win and set off a wild celebration on the sideline.
The Eagles (1-1) went ahead on Hurts’ 1-yard tush push score with 6:47 left. Barkley finished with 95 yards on 22 carries in his home debut for Philadelphia, but his drop provided the Falcons with some hope.
And then Cousins started playing like the QB Atlanta thought it was getting when it signed him to a four-year, $180 million contract.
Cousins finished 20 of 29 for 241 yards and two touchdowns. Atlanta’s first TD was a 41-yarder from Cousins to Mooney, who finished with three catches for 88 yards.
Hurts was 23 of 30 for 183 yards, including a touchdown pass to DeVonta Smith. With No. 1 receiver A.J. Brown out with a hamstring injury, Smith led the Eagles with seven catches for 76 yards and a score.
Jake Elliott kicked two field goals for the Eagles. His 28-yarder with 1:39 left made it 21-15.
Atlanta kept stalling in the red zone, getting three field goals from Koo, before Cousins fired over the middle to Mooney, who shook loose from C.J. Gardner-Johnson and left him on the turf before he somersaulted into the end zone with 1:21 left in the third quarter for a 15-10 lead. Cousins failed on the 2-point conversion pass.
Hurts had some juice in his step during a second-quarter TD drive, running with abandon for big plays much like he did in the 2022 season. He spiked the ball in a rare, raw show of emotion on a 23-yard run, earning a delay-of-game penalty. He shrugged off the 5-yard setback and scrambled for 9 yards and 15 yards to move the Eagles to Atlanta’s 19.
With comedian Shane Gillis and actor Bradley Cooper among the fans cheering on the Eagles, Hurts connected with Smith in the back of the end zone for a 7-yard TD that made it 7-3.
Under new defensive coordinator Vince Fangio, the Eagles have established an early knack for allowing long drives that end with three points instead of seven. Koo kicked field goals of 39, 22 and 34 yards, the last one enough for a 9-7 lead in the third quarter. In their opener, the Eagles held the Packers to just three field goals when they drove inside the 20.
Questionable call
Rather than take a chip-shot field goal from Elliott, the Eagles’ fourth-and-4 gamble at Atlanta’s 9-yard line in the first quarter failed when Hurts threw an incomplete pass.
Elliott kicked a 29-yarder with 4:31 left in the third quarter for a 10-9 lead.
Running wild
Bijan Robinson ran for 97 yards for the Falcons. The Eagles stuffed him late on fourth-and-1 at the Atlanta 39.
Barkley was quiet until the go-ahead drive, a week after he rushed for 109 yards and scored three touchdowns against Green Bay. Eagles fans booed when the opening drive of the game ended without Barkley touching the ball. They went wild when he had consecutive 9-yard runs to open the second drive. Barkley had 40 yards rushing in the first half.
Foles honored
Former Eagles QB Nick Foles, who led the franchise to its only Super Bowl title, served as an honorary captain and led the crowd in a rendition of “Fly, Eagles, Fly.”
Injuries
The Falcons played without LB Nate Landman (calf, quad).
Up next
Atlanta hosts Super Bowl champion Kansas City on Sunday.
TORONTO – Singles star Leylah Fernandez and doubles specialist Gabriela Dabrowski will anchor Canada’s five-player lineup when the team tries to defend its Billie Jean King Cup title in mid-November.
The 26th-ranked Fernandez, the 2021 U.S. Open finalist from Laval, Que., is the lone Canadian in the top 100 of the WTA Tour’s singles rankings.
Dabrowski, from Ottawa, is ranked fourth on the doubles list. The 2023 U.S. Open women’s doubles champion won mixed doubles bronze with Felix Auger-Aliassime at the recent Paris Olympics.
Marina Stakusic of Mississauga, Ont., returns after a breakout performance last year, capped by her singles win in Canada’s 2-0 victory over Italy in the final. Vancouver’s Rebecca Marino is also back and Bianca Andreescu, the 2019 U.S. Open champion from Mississauga, Ont., returns to the squad for the first time since 2022.
“Winning the Billie Jean King Cup in 2023 was a dream come true for us, and not only that, but I feel like we made a statement to the world about the strength of this nation when it comes to tennis,” Canada captain Heidi El Tabakh said Monday in a release. “Once again, we have a very strong team this year with Bianca joining Leylah, Gaby, Rebecca and Marina, making it an extremely powerful team that is more than capable of going all the way.
“At the end of the day, our goal is to make Canada proud, and we’ll do our best to bring the same level of effort and excitement that we had in last year’s finals.”
Fernandez, who beat Jasmine Paolini to clinch Canada’s first-ever title at the competition, is ranked No. 42 in doubles.
Canada, which received an automatic berth as defending champion, will play the winner of the first-round tie between Great Britain and Germany on Nov. 17 at Malaga’s Martin Carpena Arena.
Australia, Italy and wild-card entry Czechia also received first-round byes. The tournament, which continues through Nov. 20, also includes host Spain, Slovakia, the United States, Poland, Japan and Romania.
Stakusic is up 27 spots to No. 128 in the latest world singles rankings. Marino is at No. 134 and Andreescu, the 2019 U.S. Open champion, is ranked 167th.
Canada will look to become the first team since Czechia in 2016 to successfully defend its Billie Jean King Cup title.
Malaga will also host the Nov. 19-24 Davis Cup Final 8. The Canadian men qualified over the weekend with a 2-1 victory over Great Britain in Manchester.
This report by The Canadian Press was first published Sept. 16, 2024.
