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NHL to Hit Financial Debate? – NHL Escrow System

We just went through weeks and weeks of the MLB and the MLBPA going through labor negotiations that could have cancelled the season. We got a glimmer of hope when the two parties reached an agreement earlier this week. The MLB was late to the party with getting a plan set up for a return to play. Surprisingly, the league that had a return to play plan early was the NHL. I have talked about the 24-team playoff here before so the plan is nothing new. What is new however, is that the NHL may find themselves in a similar position to the MLB

Panarin makes his plea

New York Rangers star Artemi Panarin recently released a statement on social media that players should not return to camp unless they come to a new agreement regarding escrow.

I recently learned what the escrow system is. In fact, I have never even heard of it until the league went on pause. For those that do not know, the escrow system allows for the owners to withhold and certain amount of each player’s pay check. They do this in order to reduce sunk costs at a time exactly like this. The owners and the players split league revenue 50/50. In order to keep this balance, the escrow system will either funnel money back to the owners in case of massive losses, or it will be refunded to the players at the end of the season. For more information, check out this article on ESPN (where I got a lot of my information from).

Covid Effects

The NHL is one of the most dependent leagues in North America on gate revenue. Because fans will not be allowed to attend the playoffs this season, the owners will take a massive hit financially. In order to counteract this, the players are expecting a major increase in the escrow percentage. The owners and the players have a mutual understanding on a percentage range. It is expected to fall somewhere between 20%-25%. This is a critical moment for the NHL. The NHLPA has officially voted yes on the 24-team playoff, but has yet to vote on an official return to camp plan.

Final Thoughts

Panarin is one of the best players in the league and should be in consideration for the Hart Trophy. His voice carries a lot of influence and he may get a lot of support behind this movement. We just went through this with the MLB. We don’t need another sport holding out on financial issues. The players have every right to stand behind what they believe in. The escrow system certainly seems unfair and should be changed. However, as a fan, I can’t help but feel frustrated as another one of my favorite sports may be headed towards a financial debate.

-Pete Chatterton (@Pchat12)

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