Starting this month, players will give up 10 per cent of their paycheques, the money going into an escrow fund that was established under the new collective bargaining agreement to ensure owners wouldn’t have to give up more than 54 per cent of their revenues in player salaries.
The NHL and NHL Players’ Association signed off on the number Friday, sources told The Canadian Press, and will monitor revenues throughout the season to see if it needs to be adjusted. It was originally believed the payments would begin at 12 or 14 per cent.
The final tally will be figured out next summer.
Last season escrow payments on player paycheques began at 12 per cent before dropping to four per cent in January when both the union and league agreed revenues would surpass initial projections.
It turned out that the players were the ones owed, not the owners, when the final revenue figures came in this summer. Later this month, the league’s 700 players will receive cheques for their full escrow payments from last season, plus interest, as well as additional “shortfall” payments of 4.5 per cent.
How much a player receives depends on his salary. A US$1-million player will get $125,700 and will have received, in total, 104.64 per cent of his 2005-06 salary.
League revenues totalled $2.178 billion last season, well up from the projected $1.8 billion.
Because it’s nearly impossible to predict league revenues in advance, either the players or the owners will have to pay up at the end of each season depending on which side of the 54 per cent the numbers end up.