Under the provisions of the collective bargaining agreement between the NHL and the NHLPA, a player’s cap hit and the salary they are paid can be two very distinct values in any given year. But even when you understand those differences, how much do NHL player actually take home?
Players’ actual earnings are diminished by a number of factors including escrow, agent fees, and taxes. Agent fees can range from 2-6% depending on representation agreements and services rendered. Tax rates vary throughout the NHL depending on the country, state, and city a team and player reside and play in. But of all the deductions from their income, escrow might be considered the greatest annoyance, as it’s a mechanism to ensure that the owners collect a greater share of hockey-related revenues (HRR) than they have in previous collective bargaining agreements (CBA).
So what is escrow, how much does it actually deplete a player’s salary, and why has it contributed to the tensions between players and owners?
First, let’s go through the basics about the salary cap and player earnings.
Before the start of an NHL season, the League projects the HRR for the upcoming season. That projection is split into two equal shares to be divided between the players and owners. The players’ projected 50% share is divided by the number of teams in the league (31 for 2017-18) to find the midpoint of the salary cap range. The upper and lower limits of the salary cap are then set by finding the values 15% above and below this midpoint. These limits establish the salary cap ceiling and floor, within which each team’s payroll must fit.
At the individual player level, the maximum salaryis also set relative to the salary cap, and cannot exceed 20% of the upper limit ($14.6 million for 2016-17, $15 million for 2017-18). The minimum salary is adjusted on a set schedule: it was set at $575,000 in 2016-17 and boosted to $650,000 for the 2017-18 season.
How much a player earns each season and how much cap space those earnings take up are two different figures.Throughout the life of a contract, a player’s contract takes up a consistent amount of cap space, even if the actual salary varies from season to season. That cap hit is calculated as the average annual value (AAV) of a player’s contract.A player’s AAV is composed of total salary and signing bonuses divided by contract length.
There are two types of bonuses available in the Standard Player’s Contract (SPC): a signing bonus and performance bonuses. The signing bonus, even if spread over multiple years, is payable regardless of lockouts, buyouts, or a player’s on-ice accomplishments, while performance bonuses must be earned by meeting certain requirements over the course of a season. In practice, performance bonuses don’t count against the cap during the season because teams are allowed to go over into a 7.5% bonus cushion. After a season ends, all earned performance bonuses are counted against a club’s averaged salary, and could result in a cap overage penalty that is applied the following season.
So where does escrow come in?
Even within a hard salary cap system such as the NHL’s, the salary spend can vary significantly across teams. How much teams spend in actual salary has a direct impact on how the league’s revenues are split: if more teams are closer to the cap floor, the players may not receive their full share of HRR. On the other hand, if all teams are closer to the cap ceiling, the players may receive more than their share of revenue.
To ensure that the revenue is equally split between players and owners, some sort of process is required to reconcile anticipated discrepancies. Payments are collected from the players in case of those shortfalls in revenue; that process, as outlined by the Collective Bargaining Agreement, is escrow:
“The NHL and NHLPA agree that each Club may, in accordance with Section 50.11 of this Agreement, withhold a certain percentage of each Player’s Player Salary and Bonus obligations throughout each League Year and that such funds, if any, shall be held in an Escrow Account so that in the event that the NHL Clubs spend, on an aggregate basis, more or less on League-wide Player Compensation than the Players’ Share in a particular League Year, then pursuant to the Reconciliation and Distribution Procedures, the funds in the Escrow Account shall be distributed to the League or Players as described herein.”
Essentially, the league collects a percentage of player salaries into an escrow account throughout the season. All active players still under a Standard Player Contract are subject to this collection. The rate that is collected is determined at the start of the regular season and is subject to three adjustments, at the conclusion of the first-, second-, and third-quarters of the season.
Teams withhold the specified amount of a player’s cumulative salary and bonuses in each pay period (players are paid on a bi-weekly basis, which equates to 12 paychecks a season), that is calculated by multiplying a player’s earnings by the applicable escrow percentage for that period. Escrow is not directly deducted from a signing bonus payment though, the amount due from those bonuses is taken off salary payments throughout the season.
Escrow funds are still withheld on buyouts, but not on deferred salary or deferred bonuses. Performance bonuses are assessed separately, and escrow deductions are made based on the likelihood of them being earned.
Throughout the season, escrow continues to accumulate; then, at the end of the season, the deviation between the projected and actual HRR is determined so that funds held in escrow can be dispersed to the players or the owners such that a 50/50 split in revenue is achieved.
The table above shows the amounts deducted for escrow as well as the refunds after actual revenues and salaries were reconciled going back to the 2009-10 season. The most notable change in escrow rate was during the 2012-13 season, when the rate withheld increased from 8.5 to 16.3%. Players had lost 0.5% in 2011-12 before losing 14.7% of their salaries the following year. This significant change coincides with the 2012 lockout and the current CBA being implemented; that CBA decreased the players 57% share of HRR to 50%, so player salaries had to somehow be brought down while maintaining the face value of existing contracts. Consequently, a greater escrow percentage had to be deducted to from the players’ salaries.
Only 2.05% of the 15% of players salaries collected in 2014-15 was refunded to the players. Steven Stamkos of Tampa Bay Lightning was in the fourth year of his $37.5 million contract in 2014-15. While he had a $7.5 million cap hit, escrow was deducted from his $8 million salary (all base salary, no signing bonuses). Originally, $1.2 million was withheld. After receiving a 2.05% refund, he ended up losing just over $1 million to escrow clawbacks.
The 2015-16 season saw the highest escrow withholding of 17%, yet only 3.2% was refunded, resulting in the players losing the highest percentage of salary yet: 13.8%. Stamkos was in his fifth and final year of his contract and his total salary decreased to $5.5 million. He lost $759,000 of his salary to the 13.8% escrow deduction.
During the 2016-17 season, 15.5% was withheld. Next year, after the final revenue count on that season is completed, the refund will be calculated and announced; already, that projection has been estimated to be between 2.5 and 3%.
The 2016-17 season was the first year of Stamkos’s eight-year, $68 million contract extension. This contract was structured differently than his last, as the majority of his salary consisted of signing bonuses. That year, $8.5 million was paid in signing bonuses, while his base salary was only $1 million. Until the NHL establishes the escrow refund for that season, over $1.47 million has been withheld from that season’s salary.
For this season, the first-quarter escrow rate was announcedas 11.5%, which is the lowest since 2011-12. The rate has remained constant for the second and third quarters. Small salary cap increases can help facilitate a lower escrow rate; since there was only a 1.6% growth factor to the salary cap, the amount ultimately withheld (after refunds) should be lower for the players this season –at least, according to Commissioner Gary Bettman.
At this season’s Board of Governors meetings in December, Bettman said: “We’re projecting from our standpoint that the final escrow when it’s settled out and we disperse it will be a single-digit escrow from player salaries for last season… For this season, if we stay on the low end [of the cap], we can keep it single digits as well.”
Escrow is a point of contention between players and owners, and the refunded percentage being so insignificant puts even more pressure on the issue. But owners are adamant in keeping this provision in the next CBA. The NHL denying their players the chance for the Olympics in 2018, then asking the players not to opt out of the CBA in 2019 in exchange for Olympic participation, only furthered the existing tensions. As a result, the league and players are both gearing up for a lockout, and it’s been reflected in how players are structuring their contracts.Players are increasingly negotiating for largersigning bonuses for 2020-21 season, which would be paid before a lockout begins. The league has tried to shift the blame for escrow costs, as exemplified by Bettman alleging that if the Players’ Association had a “contrary view” on revenues, the players would be the beneficiaries of a more significant refund.
Since the NHL instituted a salary cap in 2005, escrow has been a mechanism to reconcile payments from players to ensure hockey-related revenues are split according to the agreed upon share. Some sort of reconciliation process is necessary as long as there’s a fixed split of revenues that has to be met.Taxes, on the other hand, are an inevitable cost in Canada and the United States; between federal, state/provincial, city income taxes, and jock taxes, it can get complicated. Stay tuned for Part 2, where we delve into taxes to further break down how much a player actually earns.
FAQs
The average NHL salary is $3.5 million per year. The NHL salary cap is $82.5 million for the 2022-23 campaign. The minimum wage is $750,000 for the 2022-23 season.
Why is NHL salary so low? ›
The primary reason NBA teams pay their players more money than NHL teams pay their players is due to revenue. The main two sources of revenue for pro sports teams are broadcasting rights for television and game ticket sales. The NHL receives a much smaller share of revenue from the different TV broadcasting networks.
What percentage of AAA players make it to the NHL? ›
That means that at the highest level of amateur hockey, just 4.7 percent of players end up playing in the NHL. Some of those rosters, though, had 25 or more players on them, so I decided to base the numbers on an average of 18 players per team -- which is how many would typically suit up for a game.
What do NHL players get for playing 1000 games? ›
Of these players, a number have been inducted into the Hockey Hall of Fame. From 1961 until being surpassed by Marleau on April 19, 2021, the record for most games played was held by Gordie Howe, who played 1,767 games. A player who reaches the milestone is awarded a silver stick.
Do NHL refs get paid per game? ›
Referees earn an incremental yearly increase and are expected to officiate up to 73 games per season. However, most refs will end up officiating between 50-73 games, earning between $1,500 and $5,000 each game, depending on their seniority level.
How much do NHL refs make? ›
According to FanBuzz, on average, a full-time NHL referee gets paid anywhere from $165,000 - $360,000 annually. This is approximately 10 percent of the average annual salary of an NHL player, who makes about $3 million per year.
How much does a waterboy make in the NHL? ›
Average Salary: $53,000
Job Description: Pouring water into sweaty dudes' mouths and holding their gross towels.
Is NHL harder than NFL? ›
On the other hand, NHL players involved in fighting only receive penalties, leading many sports fans to argue that hockey is the toughest sport out of the two. Moreover, NFL players get a short break after most successful tackles, while hockey can be a lot more relentless.
Is NHL declining? ›
However, Hockey's view count dropped an astonishing 61% from the previous year in the 2020 season. It went up 2% in 2021, but to dip in more than half of a total view count in just a year is alarming.
Can you be 69 in NHL? ›
Fun fact: Desjardins and forward Melvin Angelstad (two games with the Washington Capitals in 2003-04) are the only players in NHL history to wear No. 69.
1971: Bobby Orr becomes the NHL's first million-dollar man when he signs a new contract with the Boston Bruins. Orr, coming off a record-setting 139-point season in 1970-71, is already the NHL's highest-paid player.
How much is a Stanley Cup ring worth? ›
The team is auctioning off an official Stanley Cup ring that has an appraised value of $30,000 through Kroenke Sports Charities.
Do NHL players get meal money? ›
Players receive per diem at the start of training camp. It is very much needed, considering they are not paid their salaries until the regular season.
Do NHL players get free gear? ›
NHL players do not pay for their own equipment. Typically, manufacturers will pay NHL players and provide them with free gear in exchange for promotion.
How much do NHL Zamboni drivers make? ›
They are typically paid in a range from $29,000-$31,000, sometimes earning up to $37,500 annually. Of course, salaries may vary based on skill level, location and years of experience.
What sport has the highest paid ref? ›
The highest-paid referees of any sport are those in the NBA, the world's biggest basketball league. Elite NBA refs like James Capers have a reported salary of $550,000, with the chance to earn more by officiating playoff games. Even without post-season games included, the average salary of an NBA ref is $375,000.
Does Wayne Gretzky own a team? ›
Gretzky became a minority owner of the NHL's Phoenix Coyotes in 2000, and he was named the Coyotes' head coach in 2005.
Is being an NHL ref a full time job? ›
As a result of their full-time status, NHL referees receive an annual salary, benefits, and travel stipends from the league. These benefits allow them to maintain the busy travel schedules they face when officiating their 73 games each hockey season.
Do NHL referees get a pension? ›
NHL officials, as we stated earlier, are covered by a union, and their contracts are collectively bargained. Therefore officials are eligible for a pension and retirement fund and receive medical, dental, life insurance, career counseling and more.
How much does NFL towel boy make? ›
Thieneman's latest clip, which drew nearly 300,000 viewers in one day, claims that the average NFL water boy salary is actually around $53,000. That figure is also reported elsewhere, such as the sports website Stack, although data from the league itself isn't readily available.
For example, on average, NFL cheerleaders receive: $15 – $20 per hour. $500 per match. $75,000 for yearly earnings.
How much does a NFL ball boy make? ›
How much does a Ball Boy make? As of Dec 20, 2022, the average annual pay for a Ball Boy in the United States is $38,960 a year. Just in case you need a simple salary calculator, that works out to be approximately $18.73 an hour. This is the equivalent of $749/week or $3,246/month.
What sport is technically the hardest? ›
Pound for pound, the toughest sport in the world is . . . Boxing. The Sweet Science. That's the sport that demands the most from the athletes who compete in it.
What is the number 1 hardest sport? ›
#1: Boxing
Chosen by ESPN as the hardest sport in the world—and routinely landing on the top 10 lists of the toughest sports in the world by other prominent rankings—boxing is universally recognized as a crazy-hard sport. It requires a ton of physical fitness, agility, speed, cardiovascular fitness, and skill.
Why NHL is not popular? ›
Many families simply cannot afford to have a child to play hockey. Some people don't have easy access to a hockey rink. Ice time can be pricey, and there may be select hours to practice. Markoulis also said the marketability of the NHL's top prospects is lagging when compared with basketball, baseball and football.
Is NHL bigger than NBA? ›
Last year, the NBA averaged 17,319 fans at their games. The NHL, on the other hand, averaged 17,126. Most people may be surprised that the NHL is this close to the NBA in terms of attendance. However, when one looks at the numbers deeper it becomes clear that the NHL actually has the advantage.
Which NHL team is no longer in existence? ›
In search of better financial conditions; Cleveland is the hometown of minority owner George Gund III. Financial problems; sold to a group of investors with the intention to move. Both teams with financial problems. To date, the Barons are the last NHL franchise to cease operations.
Why can't hockey players wear 99? ›
Wayne Gretzky's No. 99 is retired throughout the NHL not only because he is considered the greatest player in League history, but because the number and his name are synonymous. Though there is no debate over who the best player to wear that number is, there are 98 other numbers with more than one worthy candidate.
Why did Gretzky pick 99? ›
It was with the Greyhounds that Gretzky first wore the number 99 on his jersey. He originally wanted to wear number 9—for his hockey hero Gordie Howe—but it was already being worn by teammate Brian Gualazzi. At coach Muzz MacPherson's suggestion, Gretzky settled on 99.
Can you be 0 in hockey? ›
The first (and only) skater to wear No. 0, Sheehy wasn't the first player in that number - that distinction goes to New York Rangers goalie Andy Aitkenhead in 1934, with goalie Paul Bibeault wearing it for the Montreal Canadiens in 1942. Rangers goalie John Davidson wore No.
And while many kids start hockey at ages 5-9, older kids can and should join whenever they become interested. In fact, Minnesota Hockey recently launched its first ever Never Too Late Hockey Camp with the goal of introducing more kids ages 9-12 to the game and plans to host it again this coming summer.
Do NHL players get paid after they retire? ›
About The Plan
Players earn one quarter of a year's benefits for every 20 credited games, and they are vested in their benefits as soon as they earn them. A player who has earned 10 full years of benefits will have earned the maximum benefit payable by law.
Who is the youngest NHL player to score 100 points? ›
The youngest player to achieve a 100-point season is Sidney Crosby, at 18 years, 253 days old. He scored his 100th NHL point on April 17, 2006, the Pittsburgh Penguins' 81st game of the 2005–06 season, his rookie season.
Do coaches get a Stanley Cup ring? ›
In addition to the winning players, teams give rings to coaches, trainers, scouts, executives, and other staff members. Teams often give rings to players who played for the team, but do not qualify to have their name engraved on the Stanley Cup.
What ring is removed from the Stanley Cup? ›
In 1958, the modern one-piece Cup was designed with a five-band barrel which could contain 13 winning teams per band. Every 13 years when the bottom band of the Stanley Cup is filled with names of champions, the top band is removed and retired to be displayed in the vault of the Hockey Hall of Fame in Toronto.
Do Waterboys get a Superbowl ring? ›
Depending on team policy, waterboys and cheerleaders may receive Super Bowl rings. The winning team will decide to whom they will give a ring. Usually, those will include all players, coaches, board of directors, and general staff.
Do NHL players get their own hotel room? ›
The collective-bargaining agreement now rules that only players on three-year, entry-level contracts have roommates. After that, every player gets his own room on the road. Poulin doesn't think that's a good thing.
How much does a hockey agent cost? ›
In general, agent fees are about 3-5% of a player's salary. They aren't taken directly from the paycheck, but the player pays the agent out of their take-home cash, thus diminishing how much they are actually putting in their bank accounts.
Are NHL refs unionized? ›
All NHL on-ice officials are members of the National Hockey League Officials Association (NHLOA), a labour union founded in 1969. The NHLOA represents its members in matters dealing with working conditions of on-ice officials and acts as their collective bargaining agent.
What is Rule 42 in the NHL? ›
Rule 42 of the NHL rulebook dictates that charging "shall mean the actions of a player or goalkeeper who, as a result of distance traveled, shall violently check an opponent in any manner.
It's not uncommon for NHL players to use a new stick every game and their teams pay for them — an average of about $200 per stick, which is about $100 less than they cost in a sports store. The regular season is 82 games — not including practices — so the stick bill for NHL teams can get very expensive.
Why can't you tuck your jersey in NHL? ›
Some reporters suggested that enforcing uniform rules was the National Hockey League's attempt to reduce freak accidents where a player's body was cut by skate blade while others said the league was laying down rules for eventually selling advertising space that would display prominently on the entire jersey.
Are NHL players paid well? ›
As of the 2022-23 season, the minimum salary for hockey players in the NHL is $750,000 per year .
How much does Alex Ovechkin make a year? ›
How much is a full NHL pension? ›
Full Service: You've been in the league for ten years and have received 82 games per season for pension purposes. If you reach this threshold, you will receive the maximum pension benefit, currently $255,000 per year.
Is NHL bigger than NFL? ›
NFL vs NHL: Summary
There's no real comparison between the NFL and the NHL when it comes to which league draws more fans and which creates more revenue – the NFL is the hands-down winner of that competition since the NHL's numbers are just a fraction of its football counterpart.
What sport gets the most money? ›
Basketball is the most lucrative sport globally, which is not surprising. The finest basketball players in the NBA not only make millions of dollars in payments each year, but they also receive more endorsem*nts and sponsorship money than any other athlete in any other sport.
