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10-17-2012, 11:50 AM
Shady Machine
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Originally Posted by Mr Jiggyfly View Post
They are assuming 5% growth for their "make whole" provision.....


This is going to be coming from the players share. So essentially it looks almost like player welfare for these payments. When a player retires they will still be receiving these payments and the burden will go on the current players...

Not sure the players will go for this. I dunno...
As I read it, the players will be paid any deferred payments in the later years of their contracts. So in theory, they would be completely repaid by the end of the contract (or in the case of your contract being up, you'd be repaid in the following year). They wouldn't receive these payments after they retire as you allude to. Of course, that's how the NHL states it but it does leave some room for interpretation. If revenue doesn't grow at a high enough rate there may not be enough money to pay out the deferred payments.

Here's the actual language:

• The League proposes to make Players "whole" for the absolute reduction in Players' Share dollars (when compared to 2011/12) that is attributable to the economic terms of the new CBA (the "Share Reduction"). Using an assumed year-over-year growth rate of 5% for League-wide revenues, the new CBA could result in shortfalls from the current level of Players' Share dollars ($1.883 Billion in 2011/12) of up to $149 million in Year 1 and up to $62 million in Year 2, for which Players will be "made whole." (By Year 3 of the new CBA, Players' Share dollars should exceed the current level ($1.883 Billion for 2011/12) and no "make whole" will be required.) Any such "shortfalls" in Years 1 and 2 of the new CBA will be computed as a percentage reduction off of the Player's stated contractual compensation, and will be repaid to the Player as a Deferred Compensation benefit spread over the remaining future years of the Player's SPC (or if he has no remaining years, in the year following the expiration of his SPC). Player reimbursement for the Share Reduction will be accrued and paid for by the League, and will be chargeable against Players' Share amounts in future years as Preliminary Benefits. The objective would be to honor all existing SPCs by restoring their "value" on the basis of the now existing level of Players' Share dollars.

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