A look at 'stupidity insurance'
The Hockey Rodent is getting some well-deserved column inches over at Fox Sports, and today he looks at how the NHL's escrow provision works to limit player salaries (something I've been meaning to do myself):
It's officially known as Article 50.4. But I call it "Stupidity Insurance."Some of the Rodent's figures are off — his calculations are relying on a far too low, $2-billion hockey-related revenue figure — but it's still some nice work, and it gives you somewhat of an idea of just how much of that $10-million payout Daniel Briere and Scott Gomez will actually get their hands on.
It basically says that the 30 clubs don't actually decide what to pay the players they recruit. Instead, the Holmgrens and Glen Sathers of the hockeysphere are merely granted license to allocate "shares." OK ... they were also granted the right to commit latent franchise salary-cap suicide no matter how much they front-load these deals.
You see, player salaries are a now a zero-sum game. Well, that's a misnomer. The sum is hardly zero. But the trough these athletes feed at is no longer extensible by the individual clubs as it was before the lockout. The trough now remains fixed in length. Gomez and Briere will merely enjoy more elbow room than their peers.