Lose a lot of money now, or lose that same money and jobs in a few years. NHL players are about to bear the brunt of COVID-19’s work stoppage in the next two, perhaps three seasons. While homeowners will eventually get 50% of revenue, an appreciable product, expansion fees, and rising television revenue, players will have to make up for the current losses for homeowners. Factoring taxes, local taxes, escrow and additional NHL items, Pittsburgh Penguins players and the rest of the record sellers are about to get a hose.
First, a quick primer. NHL players and owners divide hockey-related earnings 50/50. At the end of each season, bean counters add toonies, nuts, and dollars, then project how much the NHL will earn in the next season. The league and the players union generally assume that revenue will grow a few points from the previous year, and this is how they set the salary cap.
Players put about 15% of their wages in custody. If the league exceeds revenue projections for the year, players get their 15% security deposit back, though that hasn’t happened yet. Most commonly, the security deposit is divided between the players and the owners to guarantee a 50/50 split.
The NHL and NHLPA are working through Tuesday night to finalize the details of the central NHL cities, but also the details of the CBA, including the current custody distributions. The trust was a pressing problem in the CBA negotiations before the COVID-19 hiatus. Now he has become a monster that no one likes but neither side can contain.
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