As noted in Saturday's version of SportsWeek, the NHL and NHL Players' Association finally agreed upon a number for players to receive back in escrow checks.
Escrow is a nasty word for players - it means they have money set aside from their paycheck each week - but it ensured a clean revenue split between players and owners under the last CBA. Clearly, players would like to not have to deal with escrow again, something they're fighting to avoid under these negotiations.
Players set aside 8.5 percent of their salary last season just in case. They're getting back 7.98 percent of that money, the other 0.52 percent is going to the owners because the players' salaries accounted for slightly more than 57 percent of the revenue share.
That means the players made 99.48 percent of their stated contract in 2011-12.
Why is all of this important?
For one, the checks - which will be distributed before Oct. 30 - will provide a little extra cushion for the checks the players are missing on Oct. 15 and Oct. 30 due to canceled games. Some believe it will toughen their resolve to continue to fight the NHL instead of caving in this heated battle for billions.
"It's like Christmas," Scott Hartnell said, explaining the feeling to the Daily News before receiving last year's refund. "It's money you thought was lost. It's almost like receiving another week's paycheck. It's a great feeling."
Any player who was on the Flyers' roster for at least one of the 185 days in last year's season will receive a refund. It's important to keep in mind that this is salary the players have already earned.
Two, when you examine the numbers, it doesn't really make the escrow system seem all that bad if it is calculated and estimated correctly. That's easy for me to say since I'm not the one losing the money, but the amount of money lost (0.52%) is a relatively small chunk of the overall pie they earn.
When it's not, or revenues aren't quite up to par, it's an extreme hair cut for players (see 2008-09 below). Hence, we've had a difference in revenue projections - the NHLPA is projecting growth at 7 percent, the NHL is closer to 4 or 5 percent.
Escrow last season was in essence a forced savings plan for players, and especially valuable for those who do not garner huge cash signing bonuses. It is unclear if the total sum of league-wide escrow from last year ($153 million) earns money in interest - and who would earn said proceeds from interest, though it is food for thought.
Here's a pre-tax estimate at what last year's Flyers are going to get back:
|Player||~Escrow Return||~Money Lost to Owners|
|Jaromir Jagr (a)||$263,340||$17,160|
|Pavel Kubina (b)||$75,487||$4,919|
|Sergei Bobrovsky (c)||$71,820||$4,680|
|James van Riemsdyk (d)||$69,825||$4,550|
|Nick Grossmann (e)||$39,253||$2,558|
|Andreas Nodl (f)||$19,683||$1,283|
Estimated Flyers' total NHL payroll for 2011-12: $71,978,000
Estimated 2011-12 escrow money to be returned to players from Flyers: $5,743,712
Estimated 2011-12 Flyers players loss to owners: $374,285
NOTES: Calculated based on actual 2011-12 salary and not 2011-12 salary cap hit and days spent on roster ... Does NOT factor in signing bonuses ... Does NOT include performance-based bonuses which may have been paid to players with entry-level contracts ... Important to remind that call-up AHL players numbers were based on days spent on the roster.
Other Notes: (a) Jagr signed with Dallas on July 3, 2012 but was on Flyers' roster for all 185 days ... (b) Kubina was acquired from Tmpa Bay on Feb. 18, 2012 and spent 50 days on Flyers' roster. The amount shown is his escrow return due from his 50 days with Philadelphia; his 135 other days of the season are due from Tampa Bay ... (c) Bobrovsky was traded to Columbus on June 22, 2012 after season ended, spent all 185 days on Flyers' roster ... (d) Van Riemsdyk was traded to Toronto on June 23, 2012 after season ended, spent all 185 days on Flyers' roster ... (e) Grossmann was acquired from Dallas on Feb. 16, 2012 and spent 52 days on the Flyers' roster. The amount shown is his escrow return due from his 52 days with the Philadelphia; his other 133 days of the season are due from Dallas ... (f) Nodl was claimed off waivers by Carolina on Nov. 29, 2011. The amount shown is his escrow return due from his 54 days with the Flyers; his other 131 days worth of escrow return is due from the Hurricanes.
(Also: as reported by the New York Times, players are receiving checks of approximately $10,000/month of their own money from the NHLPA that was set aside in case of a lockout.)
The biggest fight of this CBA negotiation is that the players want their contracts to be honored to every dollar that they signed for. Interestingly, they weren't honored to the fullest extent after the last lockout, because some years their salaries accounted for more than 57 percent of the league's overall revenue. How did this year's escrow payment stack up with the previous 7 years of the CBA? Here's what percentage of their signed contracts players earned:
2005-06: 104.64 percent (all of their money + 4.64% additional salary because revenues exceeded expectations)
2006-07: 97.5 percent
2007-08: 100.66 percent
2008-09: 87.12 percent
2009-10: 90.59 percent
2010-11: 97.3 percent
2011-12: 99.48 percent
Average amount of signed salary players kept over 7-year CBA: 96.8 percent.
"You'd always rather have them overshoot [the estimation]," Hartnell said on Oct. 12, 2011. "At the end of the year, I don't think 750 players would like to cut a check from their own personal bank accounts to pay the owners for the difference."
Just something to think about as this all drags on...
For the latest updates, follow Frank Seravalli on Twitter: @DNFlyers