Hey Buddy Can You Spare A Dime?

PAUL CHIASSON/CP PHOTO

NHLPA Executive Director Paul Kelly responds to a question as Vincent Lecavalier of the Tamapa Bay Lightning, Joe Thornton of the San Jose Sharks and Alex Kovalev of the Montreal Canadiens (l-r), listen during a news conference Friday, January 23, 2009 in Montreal.

MONTREAL--If NHL players didn't understand the ramifications of agreeing to a salary cap linked to league revenues four years ago, they will now.

Each and every player, NHL Players Association boss Paul Kelly said today, should expect a 13.5 per cent pay cut this season because of declining league revenues. The cut takes the form of escrow payments, monies withheld from players to make sure the union collectively does not make more than its share of the money the league takes in.

In all, players will collectively lose about $217 million in pre-tax earnings this season because the league's revenue growth has dropped to about two per cent from 12 per cent a year ago..

"The players aren't happy about it," said Kelly. "But they understand it."

Kelly admitted that in this case, the escrow will have the effect of being a salary rollback the same as that the players were forced to accept after the 2004-05 lockout.

"It does work that way," he said.

What's worse is that the escrow is expected to increase to 20 per cent or more next season when NHL revenues are expected to take a larger hit. The team-by-team salary cap, set at $56.7 million now, is expected to stay at about the same level next season but then is likely to drop substantially for the 2010-11 season, which could be multiple players losing their jobs as salary cap casualties.

In the first three years of escrow payments, the players received all their money back at the end of the season plus a little bit more, and in the other year they got about 98 per cent of it back. League revenues are expected to hit about $2.6 billion this season.

In all, it's clear the general economic downturn has now hit NHL players square in the pocketbook, and hard.

They other piece of tough news the players are expected to have to deal with is that Detroit Red Wings Pavel Datsyuk and Nicklas Lidstrom are expected to be forced to sit out Detroit's first game after this weekend's all-star game for pulling out of the all-star event at the last minute.

"There's a strong likelihood they will not be allowed to play," said Kelly.

Pittsburgh captain Sidney Crosby was apparently so convinced he wouldn't be permitted to play next Wednesday against the Rangers for pulling out of the all-star game that he is expected to arrive in Montreal today and participate in events. It's expected the league will then allow him to play next week without missing a game.

The union officially announced today it would not exercise its right to re-open the current collective bargaining agreement at the end of this season.

Comments

[Oly B.Bommerl]

Salaries are based on the owners income. Prices to see the game are out of this world. So my ticketprice then is based on how much the players make. Since they bargain for as much as they can get they obviously dont really care about the fans ability to pay. So on what are the ticket prices based? Could there be a ticketprice cap?