Escrow reduced (and explained)
Jan 6, 2006 18:17:18 GMT -5
Post by MC Habber on Jan 6, 2006 18:17:18 GMT -5
Canadian Press
1/6/2006 4:20:25 PM
TORONTO (CP) - NHL player paycheques just got a little bigger.
Citing higher than expected revenue forecasts for this season, the NHL and NHL Players' Association have reduced the amount of money taken off each cheque and put in reserve.
Under the new collective bargaining agreement, the team salary cap is tied to league revenue. Since the start of the season, 12 per cent of each player's paycheque has been put into a so-called escrow account to make up any shortfall in revenue.
The payroll deduction has been reduced to four per cent per paycheque starting with the Dec. 28 pay period.
The league and union first agreed to the change in mid-December but NHLPA executive director Ted Saskin asked the 30 player representatives to check with their teammates before going ahead with it.
"Players are obviously pleased that the escrow payments have been greatly reduced and remain optimistic the strong financial results will continue throughout the year and into the future," Saskin said Friday.
Players average 13 paycheques per season from October to April.
For a player on the roster for the entire season, the total deduction would amount to 7.4 per cent of his salary if nothing changed.
For a player making $1.6 million US this season, expected to be the average salary, that would amount to $118,400.
But the two sides expect players will end up getting some of that money back.
Current projections call for league-wide revenues of around $2.1 billion, some $300 million more than the $1.8 billion the new CBA had based this season's framework on.
If revenues hit $1.9 billion this season, the total escrow payment at the end of the season will be about 6.9 per cent and if revenue hits $2 billion, the escrow payment would be in the range of 1.7 per cent.
Should revenue exceed $2.05 billion, the players would likely get a full return of any cash that had been deducted to date. And anything in excess of $2.1 billion, the owners would be writing a cheque to the players.
Of course, if revenues fall flat in the second half of the season and come in under $1.8 billion, then the players would have to contribute more to the owners at the end of the year. That's highly unlikely, however, because much of the revenue, such as TV deals and endorsements, are already guaranteed.
www.tsn.ca/nhl/news_story/?ID=149679&hubname=
1/6/2006 4:20:25 PM
TORONTO (CP) - NHL player paycheques just got a little bigger.
Citing higher than expected revenue forecasts for this season, the NHL and NHL Players' Association have reduced the amount of money taken off each cheque and put in reserve.
Under the new collective bargaining agreement, the team salary cap is tied to league revenue. Since the start of the season, 12 per cent of each player's paycheque has been put into a so-called escrow account to make up any shortfall in revenue.
The payroll deduction has been reduced to four per cent per paycheque starting with the Dec. 28 pay period.
The league and union first agreed to the change in mid-December but NHLPA executive director Ted Saskin asked the 30 player representatives to check with their teammates before going ahead with it.
"Players are obviously pleased that the escrow payments have been greatly reduced and remain optimistic the strong financial results will continue throughout the year and into the future," Saskin said Friday.
Players average 13 paycheques per season from October to April.
For a player on the roster for the entire season, the total deduction would amount to 7.4 per cent of his salary if nothing changed.
For a player making $1.6 million US this season, expected to be the average salary, that would amount to $118,400.
But the two sides expect players will end up getting some of that money back.
Current projections call for league-wide revenues of around $2.1 billion, some $300 million more than the $1.8 billion the new CBA had based this season's framework on.
If revenues hit $1.9 billion this season, the total escrow payment at the end of the season will be about 6.9 per cent and if revenue hits $2 billion, the escrow payment would be in the range of 1.7 per cent.
Should revenue exceed $2.05 billion, the players would likely get a full return of any cash that had been deducted to date. And anything in excess of $2.1 billion, the owners would be writing a cheque to the players.
Of course, if revenues fall flat in the second half of the season and come in under $1.8 billion, then the players would have to contribute more to the owners at the end of the year. That's highly unlikely, however, because much of the revenue, such as TV deals and endorsements, are already guaranteed.
www.tsn.ca/nhl/news_story/?ID=149679&hubname=