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Dreger: NHL, NHLPA agree on lower escrow rate

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Darren Dreger
10/12/2010 4:23:10 PM
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The NHL and the NHLPA have agreed on a 17 percent first quarter escrow rate.

This rate is marginally lower than the 18 percent NHL players paid last year, however the players received almost half of that money back at the end of the year because of the growth in League-wide revenues.

The NHL proposed a lower rate to start this season, but the NHLPA balked, in favor of the more conservative approach even though in reality, its members would see less money deducted from their pay cheques under the NHL's proposal.

In response to the Union's refusal to agree to any lowering of the escrow rate at all, the League threatened instead to impose the formulaic rate actually called for in the collective bargaining agreement, which would have meant an escrow rate as low as 9-10 percent in the first quarter.

The PA responded quickly, agreeing to change its insistence on maintaining an 18 percent rate in favor of a slightly lower rate.

Escrow is a dirty word to all NHL players, however what's surprising is the NHLPA's reluctance to embrace a lower rate, as proposed by the league, even though this would mean less money paid out, up front, by the players.
 
Some believe the players association is counting on its members open disdain for escrow and may use artificially inflated escrow rates to fuel any hard negotiations, soon to be appointed, executive director, Don Fehr will have in the future with the NHL, when discussions into a new CBA are formally opened.

Others suggest the PA's ultra-conservative approach to the escrow rate is merely to protect from the unlikely possibility the NHL suffers a financial meltdown.

Forcing the players to continue to overpay in escrow up front is considered a more desirable option than having to collect additional funds at the end of the season.

Taking into account that roughly only 9 percent of the players' salaries was actually returned to the Clubs this past season (even though a full 18 percent was withheld), a lower and more realistic escrow rate could result in millions of dollars being left in the players' pockets.

The NHLPA acknowledges its sensitivity to a lower escrow, but points out a strong Canadian dollar along with the fact Montreal, Philadelphia and Chicago, three very influential hockey markets went deep into the playoffs, as major contributing factors.

The union may be emotionally preparing the players for a fight, as the mechanics of the escrow issue is expected to be a hot-button point in CBA negotiations.

Donald Fehr (Photo: Jonathan Daniel/Getty Images)

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(Photo: Jonathan Daniel/Getty Images)
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