Bettman, did your final score in CBA war open the door for your cap floor to soar?

Discussion in 'The Business of Hockey' started by kurt, Feb 18, 2005.

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  1. kurt

    kurt the last emperor

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    I made a comment in another thread, and it was quickly swamped with other commentary, and decided to promote it to it's own thread.

    Pardon the Dr. Suess title, but did Gary Bettman's comments about an upper cap on salaries acting as a "magnet", create an opportunity for the PA, to shape an offer with a higher salary floor? This would promote the parity fans are looking for, and ensure more salary $$$ would be available for the players. This could happen without any perceived consequence for the owners, if they view these upper caps acting as "magnets", pulling team salaries toward the upper limit.

    If there is behind the scenes negotiating, I would encourage the PA to incorporate this into a workable solution. If they could get an upper boundary to $44-5 million, with a floor of $37-38 million, perhaps all parties would be satisfied.

    Any thoughts?
     
  2. nomorekids

    nomorekids The original, baby

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    a floor of 38 million? the league would be run into the ground in a matter of a couple of seasons.

    16-20 of the teams in the league couldn't consistently ice a 38 million dollar team.
     
  3. kurt

    kurt the last emperor

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    High floor

    But what about the whole "magnet" concept? Wouldn't the leage grind to a halt in the event of ANY of the NHL's previous offers being accepted? :P
     
  4. nomorekids

    nomorekids The original, baby

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    not if the league got what it truly wanted, a cap of 33-35 million. magnet or not, every team could conceivably survive at that.
     
  5. AlexandreDaigle

    AlexandreDaigle Registered User

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    way to high.

    What might be workable would be a salary floor for the league in total set at 50% of revenue or at 30 mil per team.

    IE if total payroll is less than (32x30) 900 mil, or 50% of leaguewide revenue it's bumped, by an addiotnal tax spread on all teams or on the lowest spenders.

    This wouldn't specifically force any given team to reach a specific # but would provide the players a realistic and guaranteed floor.

    Forbes btw had 2003 revenue at 2238 million. The MLB experienced 20% ticket sales drops after their 1994 strike.

    Assuming the same # for the NHL (it'd probably be worse) revenues next year could be guesstimated at 1790 million. 900 mil would be just over 50% of revenues so it would be a solid floor. Or the floor could be based on % directly.

    If the players union was being reasonable it would...

    1) Accept a cap in the 42.5 to 45 million dollar range.

    2) Not insist on clause 7 which is an absolute poison pill (under clause 7 if revenues declined by 20% in 2005 and returned to normal the following year, the cap would go from the 49 mil the players are asking for to 61.25 million. A 62.25 mil cap is a joke.... and the cap would increase based on the higher of two different numbers.)

    3) Use the leverage from agreeing to the first two points to insist on some kind of a cap floor that either directly (% based) or indirectly ($ based) insures ~50% cap floor, either team specifically or leaguewide.

    4) Use the leverage from agreeing to the first two points to push for strong revenue sharing to encourage competition and promote the ability of the weaker teams to spend over the floor. This probably means a real lux tax, but so be it.

    I see no coherent reason not to pursue that course of action vigorously. Conceding the first two points is a matter of necessity and pragmatism. Pursuing the last two protects the PU and its members.
     
  6. SuperUnknown

    SuperUnknown Registered User

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    The magnet theory works as long as the revenues are there. The problem without linkage is that if revenues were to drop, a floor could raise minimum salaries to an unnacceptable level (over 75% possibly).

    Take the $38M figure. If revenues drop to $1.5B next year (as predicted by analysts), then the minimum salaries going to players will be 76%. On the $1.5B figure, 53% of revenues would be $26M.
     
  7. tantalum

    tantalum Registered User

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    Basically what you are saying is that the players should negotiate off the owners first Feb proposal that had a ceiling floor, a hard cap, profit sharing, a built in escalator based on revenues.
     
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