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FTB: Show me the money!

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NHL Players want some assurances on pay that the NHL isn’t going to give them.

Toronto Maple Leafs Home opener Richard Lautens/Toronto Star via Getty Images

Time is short to get a new NHL season underway in January and both sides are squabbling about money. Because of course that’s what it’s about! Or is it?

We all know that actual paid salary in the NHL (and many other sports) has for years been derived by revenue sharing agreements that mean players don’t actually get what their contract says they will. The contract values are really more about each individual players relative size of their slice of the whole pie, the size of the pie itself determined by how much revenue the league generates. The pandemic has turned this upside down, and now there are additional layers to the calculations such as salary deferrals to future seasons and a fixed amount deposited to escrow which may or may not be paid back in future years.

A famous captain once said “Risk is a part of the game.” I can’t remember who. Maybe it was Shattenkirk?

In the investment and business world the term risk is often used as a high-level way to explain the variance in potential future returns on an investment or a business venture. Will you earn more or less than what you expected, or, perhaps, could you lose your money by investing, or even wind up owing someone else money at the end?

NHL players, of course, don’t risk “owing” money simply by playing—they will always earn an amount greater than zero—but how much they take home vs. how much the owners take back to the office is now, once again, the question at hand.

It’s all about risk

The real squabble in the NHL now is who takes on how much of the increasingly unpredictable financial risks; the risks from another shortened season, the risks in the variance of TV revenues which are now up for negotiation on the US side, and even risks from things like future tax rate changes by a new US government (do you want as much income as you can to be taxed at today’s tax rate, or defer what you can to future years to be taxed at whatever the rates will be then?) That’s a lot of risks to plan for.

The league wants the players to shoulder more of all this new risk, and the players are having none of that. They say they already negotiated this last spring, and the league is trying to reopen the deal and change it. The league says the players simply aren’t interpreting the original agreement correctly, and the players need to shoulder the risk they already signed up for.

So, this is not good. Far from petty bickering about the amount of travel, or meal voucher money, this is the fundamental parts of revenue sharing for the pandemic seasons which was supposed to have been nailed down last spring in the Memorandum of Understanding. It’s really sad this isn’t actually sorted out because there was a lot of time and effort put in to doing just that, and now all we can do is sit and watch them go through it all again.


Let’s look at something more fun. The Maple Leafs 2019 draft pick Mikhail Abramov is playing in the QMJHL bubble at Quebec City and he is tearing it up!

Mikko Lehtonen is also now back with Jokerit in the KHL after a bout of COVID-19.

Lehtonen talks COVID-19 diagnosis, competing for spot on Leafs blueline - TSN
“I know the players they have signed and who they have, but I think it’s good to have good competition with the guys and it keeps it pretty honest,” Lehtonen said. “I’m pretty confident. I feel pretty good. I’m in good shape and I trust myself, so I feel pretty confident.”

ICYMI

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