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Frank Seravalli said something no one thought they’d ever hear. He challenged players to pay more escrow. Quoted from the article: The PA felt like they were giving something up if they changed the escrow amount, which I think there was a way to do it and softly adjust that and not have it make a difference to players.
Since the shutdown players had a cap at 20% escrow negotiated in a document called the “Memorandum of Understanding…. The MOU does not supplant the CBA, but made special allowances for a severe drop in HRR. That document was done at a time when players thought that by the time playoffs were implemented there would be fans in the buildings by round 2. Instead many teams went a season with no fans, which accounts for (at that time) 50% of Hockey Revenue (tickets, concessions, parking).
That doesn’t mean that the CBA was being met. It just meant that there was a limit to what could be withheld from player pay. We have a flat cap in the NHL. The current cap is still based on a 5 billion dollar season that hasn’t been repeated. As Ottawa was sold, 2 to 3 groups dropped out when they found out the debt was equal to near half the purchase price. If all the teams had to open their books, you’d probably see very few with a net positive value comparing cash on hand to debt. 2021 saw every team lose money, the lowest at a net 21 million (Montreal) up to 57 million (Nashville).
It seems like everyone has forgotten that cap raises promised in the pre season have continually been unmet. The GMs would be happy with a cap increase under the current CBA. They already get 20% back and if they can change that amount, they could get more back. The NHL cap number is fictitious and it’s the players that pay the shortfall. Before, GMs were blamed but the PA has to vote to approve as well and players are not happy giving up 1/5th of their check.
Cap Friendly shows that only about 12 teams have more than 1 million in space right now. 9 teams have $0 with multiple players on LTIR, a tenth has less than 2k.
Detroit shows about 4.45 million in space with only 5 clubs having more. That’s a big problem when it comes to making deals. Fans are asking about a cap raise as players like Nylander are up for a raise. Unless a massive amount of money comes into HRR (team expansion fees aren’t HRR and aren’t paid all up front. Seattle made their final payment just weeks before their expansion draft). Even if expansion fees were added to HRR, 1 billion is about 30 million per team if it was paid up front. The league is paying off a billion dollar loan taken in 2021.
At this point, what are the options? It’s easy to say the CBA should be renegotiated but GMs would be hard pressed to give up that 50/50 split. A lockout or strike would not be good right now. It should be argued that owners who post a net loss year after year should bring partners into the fray who inject income that is counted as HRR. If an organization isn’t worried playing in a building that maxes out at 5k fans they aren’t worried about the losses.
Detroit has some space, but a couple raises are coming. Seider’s will be the “chunk… for sure, but Raymond will see a bump as well. 4 teams had shortened benches on opening night. Blaming the players for not wanting to pay more isn’t going to change that. This comes at an odd time as the 5 to 7 million dollar boost that was promised will likely be reassessed in January.
Advertising isn’t closing the gap so far, and no one wants to hear about broadcast $. Regardless, the NBA is going to ask for up to 75 billion for their next broadcast deal while the NHL gets 330 million from one and 220 million (minus 20% now) from another partner. That’s 15 seasons of the NHLs highest HRR take each year from a broadcaster. It doesn’t include advertising, tickets, merch etc.
Teams need to spend less. Cut down on travel, that would be a good start. Playing every team doesn’t make any sense right now. At a healthier dollar amount, it could very easily return. Accountability for ownership that continually underperforms? Shocking right. Any team with cap space is envied, but that number could be smaller next year. At some point, the NHLPA will likely be asked to budge on escrow. That is not going to be a pleasant conversation. That last CBA wasn’t ready (nor were any of us) for a complete change in the financial landscape. GMs spent to the cap believing that by now it would be 10 to 15 million more. That hasn’t happened, so something is going to have to give. If players are giving 20% back already (plus taxes, agent fees, cost of living etc) and owners are making less revenue, where is the answer?