The 2020 NHL-NHLPA Collective Bargaining Agreement (CBA) represents a significant shift in how the league manages its financial and operational structure. Ratified in July 2020 and extending through the 2029-30 season, this agreement introduced key modifications to address financial realities, particularly those stemming from the COVID-19 pandemic.
This comprehensive breakdown examines the key components of the agreement and how they compare to previous CBAs, providing essential context for understanding the current NHL economic landscape.
1. Escrow System
The escrow system ensures a 50/50 split of Hockey-Related Revenue (HRR) between players and owners. The 2020 CBA addressed player concerns about excessive escrow withholdings through structured caps.
Specific Escrow Percentages
The agreement established clear escrow withholding limits:
- 2020-21 Season: 20% cap (approximately $400 million league-wide)
- 2021-22 Season: 14-18% range based on HRR performance (finalized at 14.5%)
- 2022-23 Season: 10% fixed rate
- 2023-26 Seasons: Reduced to 6%
Comparison to Previous CBAs
While the 2013 CBA maintained the same 50/50 HRR split, it lacked specific caps, leading to unpredictable deductions that reached as high as 18% in some seasons. Before 2005, no formal escrow system existed as player salaries weren’t directly tied to league revenue.
HRR Performance Triggers
The 2020 CBA introduced revenue performance triggers that could further reduce escrow deductions if HRR exceeded certain benchmarks, creating a potential upside for players in high-revenue scenarios.
2. Revenue Sharing
Specific Formulas and Definitions
Hockey-Related Revenue encompasses all revenue earned by the NHL and member clubs, including ticket sales, broadcasting rights, concessions, merchandise, and sponsorships. The calculation formula remains proprietary but is based on audited financial statements.
Pandemic-Related Adjustments
The 2020 CBA introduced unprecedented flexibility in revenue projections to account for pandemic impacts. These adjustments recognized the uncertain attendance and revenue environment created by COVID-19.
Impact Examples
During the 2020-21 season with limited or no fans in attendance, HRR dropped significantly below projections, triggering temporary modifications to the revenue-sharing formula to maintain financial stability across the league.
Comparison to Previous CBAs
While the 2013 CBA established the 50/50 split principle, it lacked mechanisms for adjusting revenue projections during unforeseen events like a global pandemic, highlighting the 2020 agreement’s adaptability.
3. Salary Cap Structure
The 2020 CBA implemented a structured approach balancing short-term stability with long-term growth potential.
Salary Cap Figures and HRR Thresholds
The agreement established:
- 2020-21 to 2022-23: Flat salary cap at $81.5 million
- Future Seasons: Incremental increases based on HRR growth
- Projected growth to approximately $113.5 million by 2027-28, contingent on sustained HRR growth
Upper and Lower Limits
The CBA maintained the system of upper and lower spending limits, with the salary cap floor set at approximately $60.2 million for the 2020-21 season, creating significant challenges for teams with expensive long-term contracts facing a flat cap environment, such as the Oilers cap crunch.
Comparison to Previous CBAs
The 2005 CBA fundamentally changed the NHL’s economic landscape by introducing the salary cap system. The 2013 agreement provided flexibility in salary cap management, but the 2020 CBA’s salary cap freeze and future increase mechanisms were specifically designed for greater stability during uncertain times.
4. Key Concessions in 2020 Negotiations
NHLPA Concessions
Players made significant concessions including:
- Modifications to the escrow system with caps and reduction mechanisms
- Potential adjustments to contract length maximums
- 10% salary deferral for the 2020-21 season (to be paid out over three seasons beginning in 2022-23)
NHL Concessions
The league offered several key concessions:
- Commitment to maintaining economic stability
- Doubling the playoff bonus pool from $16 million to $32 million
- Increasing minimum salary from $700,000 to $750,000 in 2021-22 and 2022-23, and to $775,000 for the 2023-26 seasons
5. Impact of COVID-19 Pandemic
Return to Play Plan
The agreement included a comprehensive Return to Play plan costing approximately $75 million, with detailed health and safety protocols for completing the 2019-20 season and ensuring future seasons could proceed safely.
Adjusted Revenue Projections
Revenue forecasts were substantially adjusted to account for reduced attendance and overall league finances, directly impacting salary cap calculations and escrow rates.
Financial Stability Measures
The CBA implemented various cost-cutting initiatives and adjusted revenue-sharing formulas to ensure the financial viability of teams during the pandemic’s economic disruption.
6. Player Movement, Free Agency, and Contract Length
Free Agency Rules
The 2020 CBA maintained existing rules regarding unrestricted and restricted free agency eligibility, preserving the system that had been in place under previous agreements.
Contract Length
The agreement reduced maximum contract lengths by one year for players re-signing with their existing teams, affecting long-term financial planning for both players and franchises.
7. Winter Olympics Participation
The 2020 CBA included provisions for NHL player participation in the 2022 and 2026 Winter Olympics, contingent upon agreements with the IOC and IIHF regarding insurance, travel, and accommodations. This represented a significant change from previous policy that had prevented NHL participation in the 2018 Games, though political complications have continued to affect Olympic hockey, including Russia’s ban from Olympic hockey competition.
8. NHLPA Ratification Process
While the agreement received strong overall support from NHLPA members, notable dissenters like Henrik Lundqvist and Carey Price raised concerns about the escrow system and long-term financial implications. The ratification process required a simple majority vote from players, highlighting the democratic element of collective bargaining.
9. Comparison to Previous NHL Labor Agreements
The 2020 CBA represents an evolution from previous agreements, maintaining core principles while adapting to new financial realities. The agreement also exists within a broader legal context that shapes hockey operations, as evidenced by the dismissal of an antitrust lawsuit against the NHL and CHL that had potential implications for player development and compensation.
This extended agreement through 2029-30 provides unprecedented stability for the NHL, allowing teams, players, and fans to focus on the game rather than potential labor disputes during a particularly challenging economic period in league history.
