Escrow a Big Concern for NHL Players in CBA Talks

By Racheal Brown
Jun. 22, 2019

Of course when one is playing any game on a professional level, they want to make sure their contracts are ironclad. With the new hockey season in the coming months, both the NHL and NHL Players' Association have until two separate deadlines in September to come up with a collective bargaining agreement for Fall 2020. The pressure is certainly on because different players want to make sure they get paid what their worth.

In fact, Jonathan Toews just wants to get what's said on the documents. Of course, this may pose an issue. Under the collective bargaining agreement, NHL owners and the players split the hockey revenue up 50/50. If the payment of players go beyond that split, a certain percentage is held in escrow in order to balance it. As a result, The Chicago Blackeyed Captain and other members of the team have lost around 10% of their salaries over the past seven seasons due to escrow. It's no wonder 25 out of 31 NHL Players' Association representatives that were surveyed by The Associated Press and Canadian Press stated that this was the biggest concern with the September deadlines. Ultimately, they may terminate the current CBA effective by the upcoming fall 2020 season.

Some of other issues that were pointed out include: olympic participation, hockey-related revenue, post-career medical care, and even how younger players squeeze out older players due to the salary cap. Escrow may be a big cause of concern, especially when opting out of the agreement for the owners' Sept 1st and players' Sept 15th deadlines. It could lead to another work stoppage. More players are become aware of the situation, and trying to know what goes on and off the ice.

New Jersey Devils player rep Cory Schneider states, “I think we, as players, are really educating ourselves on the economics of the game and how it works and why escrow is the way it is.” While they may understand from the owners' perspective, there are different variables that affect the players. Schneider goes on to say, “There are a lot of things that go into it, and we understand from the owners' side how it works. But for us that's definitely something that, it fluctuates quarter to quarter, year to year, so you never really know what it's going to be and it's hard to really understand what you're earning or what your worth is when you're getting a big chunk of it taken back.” The key here is finding a solution. It's a situation that has to be dealt with to bring about balance. Furthermore, Schneider says, “I don't know if we're going to eliminate it. Obviously we'll figure that part out. But at least some way to mitigate it or control it better for us just to know what to expect.”

As it stands, the CBA sets aside part of the player's salary in a bank account for the year. When the season is over, the total revenue is calculated and if it's not at 50%, escrow is put into play. NHLPA executive director Don Fehr has discussed escrow with the Deputy Commission. If this is to be fixed or eliminated, there are a lot of changes that need to be made to the general economics of the game (that's not an easy task). While this is frustrating to players, the problem is how can you fix it? Fehr argues, “I mean, you can fix escrow by cutting salaries. I don't think players are interested in doing that. So it has to become something that you address in a manner which makes sense for the players and addresses their concerns." Ultimately, the growth of hockey is most important, because that affects the state of the game and the business side.

Additionally, 7 of the 31 teams are Canadian. The Canadian dollar is subject to so much fluctation, so that's an issue within itself. There are not only politics that goes into the salaries and taxes, but also concerns with Olympic participation. Not to mention, what happens to players' health care once they retire. Treatment for concussions and other long-term injuries are certainly things players want to be covered for in their post-career livelihood. Minnesota Wild player rep Devan Dubnyk states, "The good news is there's not anything major, but certainly some things we're going to want to be talked about." It'll be interesting to see what happens going forward as far as addressing these concerns. We'll see what happens in the coming months with the deadlines approaching.