me2
Go ahead foot
Luxury taxes are better than nothing but aren't solutions. Take a look at the supposed $45m cap with a $1 for $1 tax from $40->45m.
To a rich team like TO or NYR the $1 for $1 tax isn't remotely off putting. TO would factor it into their $50m in payroll spending at the start of the season and forget about it. To a low budget team like Edmonton or Tampa, the $1 for $1 tax would be a killer. For a team like Ottawa the tax could be the difference between staying together and having to trade players. A payroll tax of $1 for $1 is too stiff for poorer clubs and no incentive not to spend for the richest clubs. It disadvantages the poor while doing nothing to hinder the rich.
But luxury tax is revenue sharing... Well it isn't very efficient revenue sharing is it. If the rich team rebuilds for a year there isn't any tax money. Players salaries are still set by past aribtrations and now there is just less tax money. The poor see no advantage over just being given revenue sharing, and plenty of disadvantage. If teams are going to provide revenue sharing it should be done with a consistent scheme (% of total revenues, scaled tax on total revenues, % of tickets or some other similar scheme). If the players want teams to spend to $45m to keep elite teams together then we should get rid of luxury tax.
This prompts the question, how then to balance big spenders with less spenders under a cap, of say $45m. What is it that all NHL clubs have in equal abundance? What is that all NHL clubs need to be ultimately successful under a cap? I keep coming back to it, draft picks. The luxury tax should not be money, which teams have in uneven amounts, but rather draft picks, which all possess equally.
Many of the owners want a $40m cap but agreed to stretch to $42.5m. The players might accept $45m and proposed a luxury tax over $40m. Here is what I think we should end up with
$45m hard cap
No $ luxury tax
$40m-$42.5m costs a team its 2nd round pick
$42.5m-$45m costs a team its 1st round pick (instead of its 2nd)
Genuine revenue sharing from rich to poor based on % revenue.
Only teams genuinely competing would risk losing their 1st round pick. At worst it acts like the owners $42.5m cap, at best like the players luxury tax plan and $45m cap.
1. This removes idiotic overspenders with dud teams like the NYR from the players market. If you were Sather would you give up your 1st round pick 5 years straight for a team that can't make the play offs? I wouldn't!!! This is good for contending teams as there are more stars to go around and cheaper. This good for the NYRs fans as it means a proper rebuild.
2. Detroits and TOs. Older teams propped up by deadline scavenging and UFAs. These teams have to choose whether signing Greg DeVries to a contract that put them into the $42.5m-45m range for 3 years is worth giving up the 3 1st rounders the move might cost. Maybe it is to them, maybe it isn't. It becomes harder and harder to prop up an aging team without draft picks to trade/develop. When the team is ready to decline it should not put onto a UFA drip. The threat of losing draft picks will encourage management to let it declines as it should.
3. Tampa and Ottawas. Elite young teams that are maturing. Teams that are already packed with talent and still have talent coming through the pipeline. These are current and future contenders, who in a few years might be around $45m after the team matures. Assuming they can afford the financial slug of $45m losing their 1st round picks to keep the team together would seem like a reasonable option.
4. Others, not affected except that salaries are kept under control as only genuine contenders risk their 1st round picks.
To a rich team like TO or NYR the $1 for $1 tax isn't remotely off putting. TO would factor it into their $50m in payroll spending at the start of the season and forget about it. To a low budget team like Edmonton or Tampa, the $1 for $1 tax would be a killer. For a team like Ottawa the tax could be the difference between staying together and having to trade players. A payroll tax of $1 for $1 is too stiff for poorer clubs and no incentive not to spend for the richest clubs. It disadvantages the poor while doing nothing to hinder the rich.
But luxury tax is revenue sharing... Well it isn't very efficient revenue sharing is it. If the rich team rebuilds for a year there isn't any tax money. Players salaries are still set by past aribtrations and now there is just less tax money. The poor see no advantage over just being given revenue sharing, and plenty of disadvantage. If teams are going to provide revenue sharing it should be done with a consistent scheme (% of total revenues, scaled tax on total revenues, % of tickets or some other similar scheme). If the players want teams to spend to $45m to keep elite teams together then we should get rid of luxury tax.
This prompts the question, how then to balance big spenders with less spenders under a cap, of say $45m. What is it that all NHL clubs have in equal abundance? What is that all NHL clubs need to be ultimately successful under a cap? I keep coming back to it, draft picks. The luxury tax should not be money, which teams have in uneven amounts, but rather draft picks, which all possess equally.
Many of the owners want a $40m cap but agreed to stretch to $42.5m. The players might accept $45m and proposed a luxury tax over $40m. Here is what I think we should end up with
$45m hard cap
No $ luxury tax
$40m-$42.5m costs a team its 2nd round pick
$42.5m-$45m costs a team its 1st round pick (instead of its 2nd)
Genuine revenue sharing from rich to poor based on % revenue.
Only teams genuinely competing would risk losing their 1st round pick. At worst it acts like the owners $42.5m cap, at best like the players luxury tax plan and $45m cap.
1. This removes idiotic overspenders with dud teams like the NYR from the players market. If you were Sather would you give up your 1st round pick 5 years straight for a team that can't make the play offs? I wouldn't!!! This is good for contending teams as there are more stars to go around and cheaper. This good for the NYRs fans as it means a proper rebuild.
2. Detroits and TOs. Older teams propped up by deadline scavenging and UFAs. These teams have to choose whether signing Greg DeVries to a contract that put them into the $42.5m-45m range for 3 years is worth giving up the 3 1st rounders the move might cost. Maybe it is to them, maybe it isn't. It becomes harder and harder to prop up an aging team without draft picks to trade/develop. When the team is ready to decline it should not put onto a UFA drip. The threat of losing draft picks will encourage management to let it declines as it should.
3. Tampa and Ottawas. Elite young teams that are maturing. Teams that are already packed with talent and still have talent coming through the pipeline. These are current and future contenders, who in a few years might be around $45m after the team matures. Assuming they can afford the financial slug of $45m losing their 1st round picks to keep the team together would seem like a reasonable option.
4. Others, not affected except that salaries are kept under control as only genuine contenders risk their 1st round picks.
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