How Are NHL Players Getting Paid During the Lockout

The NHL players have been locked out by the league while negotiations continue on the new Collective Bargaining Agreement.  That means $1.8 billion dollars in contracts are currently going unpaid.

But not all the players are going without paychecks.

Let’s take a look at who’s still bringing home the bacon:

Injured Players

Players who were injured before the lockout will continue to receive paychecks until they’re cleared to play by team doctors.  Injured players who will still get paid during the lockout include:

Injured PlayerTeamSalary (’12-’13)
Marian HossaBlackhawks$7,900,000
Marian GaborikRangers$7,500,000
Chris ProngerFlyers$7,200,000
Marc SavardBruins$6,500,000
Derek RoyStars$5,500,000
Jason GarrisonCanucks$5,500,000
Ryan KeslerCanucks$5,000,000
Mattias OhlundTampa$5,000,000
Andrej MeszarosFlyers$4,750,000
Pierre-Marc BouchardWild$4,300,000
Kris VersteegPanthers$3,600,000
Alexander EdlerCanucks$3,250,000
Zach BogosianJets$3,000,000
Rene BourqueCanadiens$3,000,000
Sean BergenheimPanthers$2,750,000
Steve MontadorBlackhawks$2,300,000
Jonathan QuickKings$1,700,000
Michael SauerRangers$1,250,000
Patrick EavesRed Wings$1,200,000

 Note that Rick DiPietro did not make the list. He picked the wrong time to get healthy…

Buy-Outs

Players that have been bought out by their teams are still getting paid.  Read that one more time.  Let it sink in.  This list is going to look pretty ugly.  Over 20 bought-out players are actually receiving a paycheck from an NHL team during the lockout.  They include:

PlayerBuyout TeamBuyout Payment(’12-’13)
Alexei YashinIslanders$2,204,000
Chris DruryRangers$1,666,667
Sheldon SourayOilers$1,500,000
J.P. DumontPredators$1,333,333
Vinnie ProspalLightning$1,166,667
Mike CommodoreBlue Jackets$1,141,667
Colin WhiteDevils$1,000,000
Colby ArmstrongMaple Leafs$1,000,000
Darcy TuckerMaple Leafs$1,000,000

Surely the Islanders and Rangers aren’t exactly thrilled about stiffing their active players while they still have to cut checks to Yashin and Drury, respectively.

Signing Bonuses

Players who received signing bonuses as part of their contracts will still receive them.  Even though salaries remain unpaid during a lockout, signing bonuses are guaranteed.  In all, 39 players will be receiving at least $1 million this year from their signing bonuses.  The top earners, based on their signing bonus amounts:

PlayerTeamSigning Bonus
Shea WeberPredators$13,000,000
Tyler MyersSabres$10,000,000
Zach PariseWild$10,000,000
Ryan SuterWild$10,000,000
Brad RichardsRangers$8,000,000
Christian EhrhoffSabres$5,000,000
Ville LeinoSabres$4,000,000
Patrick SharpBlackhawks$4,000,000
Kevin BieksaCanucks$3,500,000
Matt CarleLightning$3,000,000
Steven StamkosLightning$3,000,000
James WisniewskiBlue Jackets$3,000,000
Jason GarrisonCanucks$3,000,000*

*As an injured player, Garrison will receive both his signing bonus and his salary until he is cleared to play by team doctors.

 

Escrow Returns

All players will be receiving money that was previously held in escrow. One of the sticking points in the last CBA was the withholding of a portion of players’ salaries in escrow.  Depending on league revenues, the players would be eligible to receive part of all of that money returned to them.   Of the 8.5% withheld for 2011-12, players are expected to get at least 8% returned via check in mid-October.

“When you’re receiving no income at all, getting the escrow payment will be good for the players,” said agent Matt Keator in a story by Kevin Allen of USA Today.  “Eight-and-a-half percent of a whole season’s pay is a lot for some guys and is helpful for many in terms of day-to-day expenses and investments.”

With an average salary of $2.4 million, that works out to a check of around $200,000 per player. Nothing spectacular, but hopefully enough to pay the rent.

The New York Times also reports that all players will begin receiving roughly $10,000 per month from a fund created by the union to help out in the event of a work stoppage.

Playing Overseas

Many players are opting to cross the pond, either to make some money or just to stay in shape.  This can be challenging due to the logistics of contracting an NHL player already under contract. While salaries aren’t disclosed, NHL players aren’t heading to Europe for a big pay day. Many players settle for a nominal salary for playing due to the excessive cost of the insurance policies that must be taken out.

In case of injury, players need to have insurance for their NHL contracts.   Normally, the overseas team covers the cost, which varies based on the contract, the player’s age, and his history.  Speaking to Sports Illustrated, one agent estimated the monthly premium at between $2,500 and $20,000 per month, but this amount can be even higher.   Petteri Ala-Kivimaki reported that “the Finnish Ice Hockey Association paid out a five-figure sum in insurance premiums for the services of Mikko Koivu at the last IIHF World Championships in Helsinki and Stockholm. The Finns’ Russian counterparts reportedly paid $400,000 to cover the insurance on Alexander Ovechkin for the same tournament.”  And this was just for a two-week event.

Are NHL Players Getting Paid During the Lockout

Will Sidney Crosby suit up during the lockout? (Jeanine Leech/ Icon SMI)

In the case of some injury-friendly players with high contracts (Rick DiPietro, please make room for Sidney Crosby next to you in the nurse’s office), the insurance may be such an exorbitant cost that teams choose to explore other options. Pat Brisson, appearing on Sportsnet’s Fan590, estimated the costs to insure Crosby could reach as high as $400,000 per month.  Because of this, don’t expect him to be suiting up for the KHL any time soon.

Some clubs are fortunate enough to get assistance from wealthy benefactors, according to International Ice Hockey Federation president Rene Fasel, who may assist teams with salaries and insurance payments for locked out players to join their teams “as a present to the fans.”   You can see this in the press releases for many of the players who’ve signed in the Swiss League. The announcements from the teams signing Patrice Bergeron, Jason Spezza, John Tavares, Max Pacioretty, and Tyler Seguin all made reference to financial backing from outside sources.

According to Rapperswil-Jona Lakers GM Roger Sigg, forward Jason Spezza is being paid enough to “cover his insurance costs.”   An NHL agent estimated that Spezza’s insruance costs will be in the neighborhood of $24,000 per month to insure one of the three years left on his contract, according to Bruce Garrioch of the Ottawa Sun.

Henrik Zetterberg - Detroit Red Wings

Zetterberg to play with Zug (Wikimedia)

Swiss magazine Blick recently reported that Swiss League team HC Lugano offered a contract to Detroit Red Wings forward  Henrik Zetterberg. The deal would reportedly pay $53,000 per month for insurance and $2,000 per month as salary.  That figure is certainly much more modest than the $7.75 million Zetterberg was set to earn in the NHL this season; with the Wings, he’d earn $1,575 per minute of every game.   Zetterberg ultimately signed in Switzerland, but with EV Zug. Terms of the deal were not disclosed.

Anthony Stewart of the Florida Panthers recently inked a deal with the Nottingham Panthers of Great Britian’s Elite League.  He’s basically playing for free.  While top players in the league bring in about $5,000 a month, many have additional sponsors or day jobs to help pay the bills.  The right winger’s new club is handling lodging – “They’re going to put me up in, what do you call it, a flat,” said Stewart and  the Panthers are covering Stewart’s insurance during his time in Nottingham, according to the New York Times.

Kontinental Hockey League (KHL)

Ilya Kovalchuk

Kovalchuk could be earning as much as $7 million in the KHL. (Icon SMI)

While the average salary is certainly lower in the KHL than the NHL, the potential earnings for a superstar player can be significantly higher.  Back in 2010, Mike Brophy of Sportsnet spoke with an anonymous GM who reported that former Red Wing Sergei Fedorov was earning $14 million a season on the KHL.  Rumors of Ilya Kovalchuk defecting to the league had a $20 million per year price tag attached to him.  Making those figures even more attractive is the fact that KHL contracts are tax free.  They also don’t include the escrow amounts – 8.5% for 2011-12 – that NHL players were required to pay under the previous CBA.

Of course, that’s for full time KHLers.

NHL players are subject to some additional restrictions. KHL teams are limited to a maximum of three NHLers on their rosters.  Their salaries are capped at 65% of their current NHL contracts – unless you’re Alex Ovechkin, who is rumored to have worked out a deal that would pay him more, according to Sovietsky Sport.

While the league does have a salary cap of $36.5 million per team, NHL players are exempt from being counted under the cap, giving teams more flexibility to sign them during the lockout.  Based on that, we can assume that players may be in the following range:

PlayerNHL TeamNHL Salary (’12-13) KHL Max Salary
Ilya KovalchukDevils$11,000,000$7,150,000
Alex OvechkinCapitals$9,000,000$5,850,000+
Evgeni MalkinPenguins$9,000,000$5,850,000
Pekka RinnePredators$7,000,000$4,550,000
Pavel DatsyukRed Wings$6,700,000$4,355,000
Sergei BobrovskyFlyers$6,500,000$4,225,000
Niklas BackstromWild$6,000,000$3,900,000
Zdeno CharaBruins$6,000,000$3,900,000
Sergei GoncharSenators$5,500,000$3,575,000
Evander KaneJets$3,000,000$1,950,000

While the lockout is still hitting the players in their wallets, don’t be fooled into thinking that the players aren’t getting paid.  Of the top 25 highest-paid players in the NHL, ten of them will be making at least $3MM thanks to signing bonuses or the injured reserve list.  The top 5 highest-salaried players all happen to have the top 5 highest signing bonuses – all $8 million and higher.

For the rest of the players, it will be interesting to see how far their 8% escrow payment and $10,000 a month from the NHLPA can carry them.

(All salaries and financial data in US dollars.  All salary information courtesy CapGeek.com)





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