execwrite1
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- Mar 30, 2018
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Unlike MLB, the NHL and the players have a formula that shares the pain of reduced income stream - the escrow system.
Looks like the NHL owners are covered if next season is shortened or played without fans. With attendance income totaling 40% of revenue, the owners are covered for 30% of the players pay due to escrow and deferral.
There is a paragraph in the MOU that might put some player salary in jeopardy in that case. Though it is likely not their intention to use it, the NHL has seemingly preserved the ability to invoke Paragraph 17 in player contracts in the case of COVID-19. Paragraph 17 states that “if any condition arising from a state of war or other cause beyond League control” that the NHL has the power to cease or reduce operations, which would give them the ability to pro-rate or cancel salaries altogether. The MOU language only restricts a team from individually invoking Paragraph 17, so the NHLPA did reserve the right to challenge the applicability of Paragraph 17 as it relates to COVID-19.
But that means a worst-case scenario is still on the table for NHL players. If the league shortens to a hypothetical 48-game season, then players could receive just 70 per cent of their share of 48 games’ worth of pay, which is the pro-rated amount minus 20 per cent for escrow withholding and a 10 per cent deferral. That is all language the NHLPA and BOG are voting on today.
Looks like the NHL owners are covered if next season is shortened or played without fans. With attendance income totaling 40% of revenue, the owners are covered for 30% of the players pay due to escrow and deferral.
There is a paragraph in the MOU that might put some player salary in jeopardy in that case. Though it is likely not their intention to use it, the NHL has seemingly preserved the ability to invoke Paragraph 17 in player contracts in the case of COVID-19. Paragraph 17 states that “if any condition arising from a state of war or other cause beyond League control” that the NHL has the power to cease or reduce operations, which would give them the ability to pro-rate or cancel salaries altogether. The MOU language only restricts a team from individually invoking Paragraph 17, so the NHLPA did reserve the right to challenge the applicability of Paragraph 17 as it relates to COVID-19.
But that means a worst-case scenario is still on the table for NHL players. If the league shortens to a hypothetical 48-game season, then players could receive just 70 per cent of their share of 48 games’ worth of pay, which is the pro-rated amount minus 20 per cent for escrow withholding and a 10 per cent deferral. That is all language the NHLPA and BOG are voting on today.