Can someone help me understand revenue sharing?
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12-07-2012, 12:36 PM
The Full 60 Minutes
Join Date: May 2007
Hmm, to me it sounds like you're confusing revenue sharing with linkage a little? You essentially have the revenue sharing amongst owners part right. The other half of your post regarding the HRR split, gets into linkage and the HRR split between owners and players. The 'players share' of HRR isn't really on the topic of 'revenue sharing', which is an owner-to-owner thing. So for the rest of this post I'll try to avoid using the word 'share' when it comes to talking about the HRR split and instead use 'portion'.
To understand what linkage means you have to understand how players get paid their salaries.
In basic terms it means your salary is directly linked to the revenue of the league.
Contrary to most fan's beliefs, NHL player salaries aren't signed for fixed amounts. They are actually signed for a somewhat variable amount that can change depending on league revenue and the players' portion of HRR, as defined by the CBA. As fans, we are just sort of fed by the media what their contracts are currently 'worth' for convenience.
In the previous CBA, it was 57/43. (Actually not really..it wasn't fixed, but slid around between 54-57 depending on revenues, but in the last few years it landed and stuck at 57). So 57% of all league revenue is handed to the players and they go and chop it up further from there and that's how players make their salaries. 43% goes to the owners and they use it to cover the other costs associated with operating an NHL franchise..with whatever left being profit.
The CBA is sort of a larger contract that governs all other player contracts. If the % of HRR for the players changes from one CBA to another, then all salaries are adjusted accordingly. Every player who signs a contract in the NHL should know this.
Therefore, it is my opinion that calling for 'contracts to be honored' is a bit bogus, because in reality they are being honored. Salaries are linked to their percentage of HRR% as defined by the CBA. If it goes down to 50% then your contract essentially, becomes worth less. Conversely, if by some reason the players' portion went up to 60%, your contract would suddenly be worth more to your pleasant surprise. That's how it works in a linked system.
That's my somewhat simple take on linkage as I understand it. Colored with a bit of pro-owner bias I must admit. Other posters here will be sure to correct or clear up anything I may have misconstrued. Hope it suffices...there is some more complex stuff like escrow and etc. I won't try to get into.
Last edited by Turbofan: 12-07-2012 at
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