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Yet another CBA proposal from the NHL

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yknow, if you don't look at Bettman too hard, he <em>almost</em> resembles Vladimir Putin.
yknow, if you don't look at Bettman too hard, he almost resembles Vladimir Putin.

The NHL has characterized the new proposal as a significant step forward. Some of the reported responses include the idea that all they did was change some numbers. However, no one is talking about being slapped in the face--at least not yet, anyway. So what's different about this one from the ugly one back when this got going? I thought I'd start your Wednesday by popping around the Internet and seeing what news about it I can explain/put in one place for us.

According to USA Today, 4th period, Puck Daddy, and the SB Nation mothersite, here's some highlights.

First, the players' share of hockey-related revenue (HRR). In the original proposal, the expiring system (43% NHL/ 57% players) would shift dramatically, with the players taking home only 47% of HRR. This time the NHL has proposed a split that drifts its way down to what many of us feel is inevitable, a 50/50 split. The players' share of HRR under this proposal breaks down in a silly way year by year but the bottom line is, the end result is a 50/50 split.

Of course, we also don't know yet how HRR is defined in this proposal, so depending on that, the 50/50 might not be any better than the earlier deal.

Another important point in the proposal is fixed salary caps for the next few seasons. Next season, this proposal would put the salary cap at $58 million. According to Capgeek, 16 teams are currently at or above this number.

The two years after that would have caps at $60 and $62 million, respectively, and the years following that would not be fixed. They're projected to eventually reach current cap levels.

It's also worth mentioning before I go on that nobody seems to know yet if the ridiculous restrictions placed on free agency (5-year ELCs and 10 years of RFA) are in place or not. There's also no word on amnesty buyouts.

So how does the League expect over half of its teams to get under that cap, when some are $10 million over it? That isn't exactly clear right now. One thing that was missing is salary rollbacks. In the earlier NHL proposal, players would be expected to take a 24% pay cut across the board. In this deal, there is no rollback. Contracts will stand as they are. But if there's no rollback, how the hell does the NHL plan on shrinking the players' slice of the revenue pie to 50%?

The answer, it appears, is escrow. (If you understand escrow, skip a bit.)

You can think of escrow like withholding taxes from your paycheck. As tax season ends, depending on what you were able to deduct for whatever reason, if you paid too much income tax, the US government and/or your state government gives you a tax refund. (I don't know how Canadian tax works though.) Nobody knows what league revenues will be before the season, so nobody knows what cut players and owners are entitled to, but players have to get paid, right? So they project. Accountants work their fancy math and a certain percentage of player salaries go into an escrow account, and payments into it throughout the year are adjusted as projections get more accurate. Finally, in the offseason, the accountants are able to fancy-math us an answer for how many dollars of the revenue the owners were entitled to under the CBA. The owners take whatever they may still need to get them to that number out of the escrow account, and what's left is given back to the players: a "tax refund," if you will.

The problem here is that adding more to escrow is, in terms of real dollars, not different from a salary rollback. Keeping with the "tax return" theme, if suddenly you were having more of your check withheld every pay period, and your refund either stayed the same or decreased come tax time, how would that be different from just starting at a lower salary with the percentage being withheld staying the same?

The players hate escrow like Mike hates sauceless sandwiches, and that's why this proposal isn't going to get it done. Over time, in theory, player signing practice would shift to meet the economics, but for the main duration of this deal, the players are gonna lose a significant chunk to escrow and never see it again.

BUT! Like I said, I'm quietly optimistic here. The numbers themselves are getting closer to reality and reason. There's still almost 3 weeks before the CBA expires. Let's see what the NHLPA responds with, and in fact they may have already released their response by the time you read this. Silly Negotiating Season might be over. We might be able to see a deal done before too many games are missed.

Finally, if this proposal were adopted, what would it mean for the Avalanche? My gut sense is, well, nothing would really change, except our players would be losing more to escrow like everyone else. Unless Ryan O'Reilly ends up with the mythical David Jones Money, which seems unlikely given Matt Duchene got $3.5M per, the Avs would find themselves, honestly, safely bumping up against the cap.