An Update on Actual Spending to Date

Discussion in 'The Business of Hockey' started by GSC2k2*, Aug 7, 2005.

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  1. GSC2k2*

    GSC2k2* Guest

    I have read from a great many armchair GM's pontificating on how "outrageous" the "spending sprees" have been to date (especially on the FA board).

    It occured to me to wonder exactly where we are on spending to date.

    Accordingly, I did a little addition. To do so, I used the TSN salary tracker. It is somewhat imperfect, as it only states actual salaries this year rather than cap amounts (i.e. Gonchar) but it is a reasonable enough indicator for a macro exercise such as this.

    Here are the numbers:

    Players signed: 385

    Aggregate Salary: $640.747 million

    Number of Players With Salary "Undisclosed": 33 (mostly fringe-ish players, but a couple of star-level guys)

    Average Salary So Far For "Disclosed" Salaries: $1.82 million

    The current projections allow for $1.7 billion in revenues. 54% of that is $918 million. After subtracting $66 million for benefits, available spending before an escrow would be required is $852 million.

    This leaves $211 million for the 33 undisclosed guys and the 300 other guys (including RFA's, etc.).

    Conclusion: There are still hundreds more to be spent, and hundreds of guys on whom it will be spent. All of the biggest tickets have been punched. If I am an agent, however, I might be getting a little panicky. Getting your player a minimum level salary is a pretty quick way to get yourself fired.
     
  2. kdb209

    kdb209 Global Moderator

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    Of course teams and more importantly agents know that that $211M is only a limit on spending at the end of the year and not any sort of limit on contract signings. No team is going to tell a player "Sorry I can't pay you any more, the leagues at it's limit". No, the GM will still sign the player, based on it's team budget, team needs, and the player's demands, and let the escrow rebates fall where they may.
     
  3. handtrick

    handtrick Registered User

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    Thanks for the effort GS....I was fearing this was happening but there are some pretty big tickets that still need to punched out there. These come to mind immediately...and I am sure there are many more:

    Thibault
    Selanne
    Nash
    Arnott
    Brendan Morrow
    Zetterberg
    Cujo
    Ryan Smith
    Cechmanek
    Stumpel
    Hartnell
    Legwand
    Sullivan
    Patrick Marleau
    Henrik Sedin
    Daniel Sedin
    Heatley
    Kovalchuk
    Gill
    Samsonov
    Thronton
    Boynton
    Briere
    Luongo
    Koivu
    Theodore
    Elias
    Friesen
    Kozlov
    Hamrlik
    Lindros
    Havlat
    Hossa
    Bondra
    Esche
    Gagne
    Leclair
    Burke
    Lemieux
    St. Louis
    Boyle
    Lecavalier
    Halpern
    Witt

    There are some guys who are going to get squeezed, big time...

    Wonder what kind of wrench arbitration is going to throw into the mix....
     
  4. GSC2k2*

    GSC2k2* Guest

    Noted and agreed. I was mor referring to the UFA big tickets having been punched. There are some RFA doozies, though.

    I have wondered about the RFA angle too. I wonder if arbitrators are required to take into account a team/s cap room, or if they must disregard it.
     
  5. handtrick

    handtrick Registered User

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    Huge question..I agree...I bet they have to arbitrate independent of it, but haven't seen anything written to that effect....
     
  6. SJeasy

    SJeasy Registered User

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    Saw something specific that cap room would not be part of the question.
     
  7. Captain Ron

    Captain Ron Registered User

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    I don't think the arbitrators are allowed to consider a teams cap room. Hence the addition of a second buyout period for teams in arbitration cases.
     
  8. GSC2k2*

    GSC2k2* Guest

    I had not heard that!!

    Do you have a source for that second buyout period?

    {Edit: Found it. It seems that those buyouts will count against the cap. Your point makes sense. If arbitrators took cap room into account, there would be no need for a second buyout period. Ergo ...}
     
  9. Captain Ron

    Captain Ron Registered User

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    I just found this out recently.

    http://www.nhl.com/nhlhq/cba/critical_dates072205.html

     
  10. HughJass*

    HughJass* Guest

    My question is whether that second buy-out period pertains to players who win their arbitration cases or any player if that team loses in arbitration?
     
  11. kdb209

    kdb209 Global Moderator

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    Any player.

    A team doesn't have to buy out a player who wins an arbitration case. If they think that the award is too high, they can just walk away and let the player become a UFA. They have no obligation to pay the arbitration award.
     
  12. GSC2k2*

    GSC2k2* Guest

    Here is an updated spending calculation:

    Players signed: 489

    Aggregate Salary: $725.3 million

    Number of Players With Salary "Undisclosed": 61 (mostly fringe-ish players, but a couple of star-level guys)

    Average Salary So Far For "Disclosed" Salaries: $1.69 million

    The current projections allow for $1.7 billion in revenues. 54% of that is $918 million. After subtracting $66 million for benefits, available spending before an escrow would be required is $852 million.

    This leaves about $127 million for the 61 undisclosed guys and the 200 other guys (including RFA's, etc.).

    I note that the average salary of disclosed signees is creeping dow, as might have been predicted.
     
  13. fr4ed2384

    fr4ed2384 Registered User

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    There is another way to look at it . Given the revenue of $1.7B , 54% is $918M and the total salary minus benefits is $852M and there are 690 players (30*23 .. 22 players per roster does not make a big difference) the following occurs:

    The ave salary at $852M needs to be $1.234M ($1,234,000)
    The ave salary of 489 signees disclosed is $1.482M

    Current player salary run rate is over the "allotted rate" 20%


    If we could be reasonable confident that the undisclosed signees, RFA's and remaining UFA's salaries are not going to average less than the current $1.482M

    then the "escrow recovery" would be (of all the players salary)
    at the revenue of $1.7B 16.7%


    This makes sense when you realize that:
    30 teams * 39M = $1,170M
    The "planned " league cap is54%: or $852M

    therefore the potential aggregate overspend by teams is : 37%

    Therefore the max escrow recovery is $1,170M/ $852M
    of player salaries or 28%
     
  14. GSC2k2*

    GSC2k2* Guest

    THe current average salary is not $1.482 mil. It is $1.69 mil.

    My count of 489 signees includes the 61 undisclosed salaries.

    Therefore $725.3 mil/(489-61) = $1.69 mil.
     
  15. fr4ed2384

    fr4ed2384 Registered User

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    Ok -- We can play that game --- but does it change the basic concept ???

    at the current rate of player salary spending (if it continues) there will be a escrow accrual and "rebate " of -- greater than 16% (if the revenue is $1.7B) - or $225M

    PS .. as you stated the 61 undisclosed are mostly fringe players ( 600K per) which lowers the average too --closer to middle of the two numbers the $1.58M per player
     
  16. GSC2k2*

    GSC2k2* Guest

    Oh, I was not debating your basic premise. I was simply explaining the original numbers, since I plainly did not clarify them sufficiently.

    THere are two paths forward:

    1. A bunch of guys will be getting minimum salaries;

    2. THe NHL is going over 54% of $1.7 billion, which will necessitate at least an initial escrow (until revenues are clarified a little bit more).
     
  17. Crazy_Ike

    Crazy_Ike Cookin' with fire.

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    Most of the salaries coming now will be far lower than the ones already given out, since the vast majority of players needed to be signed to fill out the rosters are closer to fringe players than the ones that have signed. With a couple exceptions, of course.
     
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