Gary Bettman's "Deferred Money" Controversy

When the NHL Player’s Association negotiated a cap on escrow for the 2021 season, they were fully aware that they would have to pay back every penny they received above 50% of hockey revenue. At that time, the NHL was desperate to host their playoffs, giving the players more bargaining leverage than perhaps they’ve ever had. They used that leverage to get paid more of their money up front, even though they’d be paying back a big chunk of it if the league starts a new season with empty buildings.

So when Gary Bettman announced in November that the league would need more deferred money to meet their targeted Jan 1^st return date, the union was rightfully upset that Gary was back-tracking on something that was lawfully negotiated and agreed to. Some people might be confused by the “zero sum game” appearance of this whole saga. Revenue gets split 50-50, so what difference does it make if it’s paid sooner or later? The longer you let the players keep their money, the less they actually have to pay back. The players can collectively invest that cash while they have it, earning money from their money, functionally lowering the cost of escrow.

Gary stepped on a hornet’s nest when he announced that the league needed to change the terms of their negotiated agreement. The optics were terrible, and the media pounced. While I have not read the fine print of the new CBA, my suspicion is that the league mistakenly or inadvertently gave the players favorable repayment terms. Whether Gary’s negotiating team knew it at the time or figured it out later, I don’t know. This is all speculation on my part, but it’s what I’m reading between the lines of Gary’s press releases.

It’s also possible that a certain number of teams genuinely can’t afford to resume operations without fans in the buildings. Some of the struggling franchises may not be able to afford covering operating expenses without ticket sales, and that’s at the root of Gary’s recent demands. If that’s the case, then Gary should have simply said so. He should have said that the league can’t afford to resume play until fans are allowed back, and if that takes several months and potentially jeopardizes the season, then so be it. That should have been the starting point, then force the union to renegotiate if they want to save the season. But once Bettman says that, then the Jan 1^st start date becomes virtually impossible. He wanted the best of both worlds.

The Jan 1^st start date may already be logistically impossible. Perhaps the tactic here was to make it seem like the union was pushing back the anticipated start date, instead of the league simply announcing it can’t be done. Trying to extrapolate the NHL’s strategy from these press releases is a difficult task. It’s plausible that the league’s financial footing is weaker than they care to confess, or they are just mad that the NHLPA potentially won a victory in collective bargaining that allows them to functionally lower the cost of escrow. The answer might lie somewhere in between. I can only guess the NHL’s motive, but something doesn’t add up.

At this rate, we’ll be lucky if the NHL resumes play by February 1^st.