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12-10-2012, 12:11 PM
Ace Rimmer
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Originally Posted by Crease View Post
So basically, the players like back-diving deals. Crosby gets paid, but the cap hit is reduced so that guys like Mayers can also get paid. My question is this...doesn't uncapped escrow ensure that guys like Mayers and Crosby feed from the same finite bowl regardless as to what their cap hits are?
The way I think it works is this. Salary cap & escrow are both calculated on the cap amounts, not actual dollars. So in 2013/14 Sidney Crosby's cap hit is $8.7 million but the money actually paid to him is $12 million. His escrow payments, however, are based off the cap hit, so at say 5%, he pays $435,000 (or 3.625% of his actual money paid to him). He might or might not get all/part of that money back. Meanwhile, Jamal Mayers signs a 1 year deal at $600,000. He pays his 5% escrow on that full amount ($30,000) and may or may not get it all back.

Both Crosby & Mayers feed from the same finite bowl, but Crosby potentially benefits more from it than Mayers would - to the tune of a 1.4% "escrow shelter". I shudder to do the math on Parise/Suter contracts.

It's the resulting "accounting gymnastics" from this scenario (and others) why the NHL is seeking to put a cap on contract terms & limit term variance, but what they should be looking at is a TRULY linked system, where the amount of actual dollars paid in a season to players wouldn't exceed the negotiated linked % amount, not a falsely reduced cap hit amount - which is nothing more than voodoo accounting.

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