Speculation: Brian Burke: Cap might be $40 million next season

[Mess]

Might be nobody in the rinks but I would assume that drives up the value of the TV contract.

People stuck at home with nothing to do means that live entertainment / competition is at a super preimum

While there will be increased viewership on TV however these are not at parallel revenue streams.

Every season I purchase NHL Centre Ice for $199 Canadian, which gives me a front row seat to all teams for all games while sitting on my couch. For that $200 bucks you could buy you 1 admission to 1 X game to watch the Leafs in person. Even if you made all games pay-per-view events charging $25 bucks per game purchased you would be hard pressed to recover lost revenue from sold out arenas. IMO

There is already a current TV contract in place, so we're actually only talking about the difference here between the old expiring one and new one as increased HRR revenue, to try and offset actual losses or empty arenas.

 

[Mess]

Well if you figure this season is down 20% in HRR, you have to figure conservatory next year would be also down 20%, add in the usual 10% escrow each year. I could see where Burke is coming from, so an escrow of 50% to make the owners whole over the last 2 years wouldn’t be out of the question

The only way I can see the salary cap remaining the same, is if the NHLPA players agree that it remains locked for years at this current level, up until the owners have recovered their losses gradually year after year until HRR is back up again to previous levels.

The NHL owners are in this for the long haul so they don't necessarily need full reimbursement for losses in year #1, this could be a 5 year recover plan to make them whole again instead of major salary cap drop to reflect actual HRR figures when hockey resumes. Increased player escrow % for owners also factored into this new formula to help get back to a 50/50 split.

 

[darrylsittler27]

50 percent of Cdns were within $200 of bankruptcy before covid and losing their jobs etc. The current Bettman NHL model is broken and is financially unviable and until prices come down substantially expect empty seats forever. The product is rigged and gone downhill. Canada should just start their own league.

 

[darrylsittler27]

The NHL model is too dependent on rigging games and screwung CDN teams. Let's return the favour and bail! You need that money and your CDN team will never win anyway.

 

[hullsy47]

Well if you figure this season is down 20% in HRR, you have to figure conservatory next year would be also down 20%, add in the usual 10% escrow each year. I could see where Burke is coming from, so an escrow of 50% to make the owners whole over the last 2 years wouldn’t be out of the question

I concur this is likely the only way to save the game until there is a vaccine
Not many folks will wanna go thru this again
Burke was being gentle
I'll go a bit further
The league minimum will drop 50 % just to keep NHL calibre players in the league
No bussiness will be spared but gate driven businesses will be hurt most IMO

 

[Stephen]

People not thinking the cap will take a 40-50% hit

This is Great Depression 2.

In The Great Depression, people were eating family doggo to stay alive.

40 million for a sports game will be a godsend

The cap might go down over the next few years to apocalyptic levels, depending on what happens with the real world economy.

However, I don't think the NHL anticipated a world changing, overnight meltdown and end to the 2019-2020 season the way it likely happened. And to this point, they still got roughly 70/82 games per regular season, so the short term hit shouldn't be the catastrophic 50% reduction.

The only way you can get a cap down to those levels is to negotiate with the NHLPA and figure out something system wide in the form of a rollback, soft cap, or whatever. It's not one or two compliance buyouts.

I would imagine if they nuked the league back to a $40 million cap, nobody would be able to have a full roster, the real world dollars paid out + re-signing dollars would be prohibitively expensive for owners and the disruption would be so great as to seriously damage the product. Aka no win.

 

[Wafflewhipper]

50 percent of Cdns were within $200 of bankruptcy before covid and losing their jobs etc. The current Bettman NHL model is broken and is financially unviable and until prices come down substantially expect empty seats forever. The product is rigged and gone downhill. Canada should just start their own league.

I actually thought that a couple times also. Just kind of grumbling to myself type of thought. Not a clue on if it would be any good for the game. Canada teams are profitable even st the dollar disadvantage.

 

[Menzinger]

The only way I can see the salary cap remaining the same, is if the NHLPA players agree that it remains locked for years at this current level, up until the owners have recovered their losses gradually year after year until HRR is back up again to previous levels.

The NHL owners are in this for the long haul so they don't necessarily need full reimbursement for losses in year #1, this could be a 5 year recover plan to make them whole again instead of major salary cap drop to reflect actual HRR figures when hockey resumes. Increased player escrow % for owners also factored into this new formula to help get back to a 50/50 split.

There will likely be some give and take for stability at least over the next couple seasons, but theres imo zero chance any dramatic rollback in cap happens without it leading a lockout. Hence Burkes suggestion of a 50% cap reduction as early as next season seems fairly outlandish at this point in time

 

[Golden_Jet]

A huge cap reduction I agree, but they will use escrow, to achieve the same thing.
If the players or league don’t renew a contract in 2021 they would be shooting themselves in the foot.

The question is do the owners become whole before the CBA expires, or does it run into the renewed one.

 

[Drew311]

Then cut the players cap hits in half.

 

[Bluebear]

50 percent of Cdns were within $200 of bankruptcy before covid and losing their jobs etc. The current Bettman NHL model is broken and is financially unviable and until prices come down substantially expect empty seats forever. The product is rigged and gone downhill. Canada should just start their own league.

Those are the concession stand workers, not the season ticket holders

 

[Leafs87]

Brian Burke is an idiot and he shouldn’t be in TV. He’s washed up and even in his prime he was nothing more than a loud mouth with absolutely no substance. Like some guy trying to sell you his 1999 Toyota Corolla for 5,000.

Btw the cap is reported to stay at 81.5 for next year as of today. Not official yet but also a big difference than what Burke was predicting

 

[mikeyz]

Does that mean the players are gonna have to have a roll back in their salary? That would be brutal for them.

Yeah.... Matthews, Marner and Tavares would be making a measly $5.5 million per year.

Dear lord, how are they going to be able feed their families?????

 

[Golden_Jet]

Brian Burke is an idiot and he shouldn’t be in TV. He’s washed up and even in his prime he was nothing more than a loud mouth with absolutely no substance. Like some guy trying to sell you his 1999 Toyota Corolla for 5,000.

Btw the cap is reported to stay at 81.5 for next year as of today. Not official yet but also a big difference than what Burke was predicting

That was reported by Strickland and shot down by Lebrun, everything is speculation at this point.

 

[Mess]

There will likely be some give and take for stability at least over the next couple seasons, but theres imo zero chance any dramatic rollback in cap happens without it leading a lockout. Hence Burkes suggestion of a 50% cap reduction as early as next season seems fairly outlandish at this point in time

I'm not buying Burke's 50% cap either, however there could be a $10-12 mil drop say from $81.5 to say $70 mil if the season is not competed, due to lost revenue.

This is where the NHL comes up with ways for teams to get in cap compliancy via 1 time buyouts that don't count against the teams salary cap going forward. ie Leafs could buy out Tavares and save $11 mil with no cap hit penalty and play at $70 mil next year with a full team.. This is what the NHL did when they went from no cap to a cap system and again when there was a partial lockout year. So this is not a new idea, but one already used in the past. In fact in the past the buyout QTY was unlimited as to how many contracts a team could buyout, and Leafs might buy out 3 X 3-$4 mil contracts (ie AJ, Kapanen and Kerfoot) instead of 1 big one like JT.

This option doesn't involve NHLPA approval because buyouts are part of the CBA now as tools for teams to use. The only change would be NHL owners agreeing that this one time buyout option of contracts due to the virus impact does not count against the teams salary cap like normal buyouts would. .However the buyout tool is there to keep owners honest, it has nothing to do with players.

The bought out players get their money (2/3rds now and that might be changed to 100%) and then get to double dip by signing a new deal again overlapping the contract years of the bought-out one. This more money to the player.

The other option I mentioned was player escrow which is also a management/ownership tool in the CBA of withholding player wages to make sure there is a 50-50 profit/loss split. If the Salary Cap drops 10-15% from last year all the owner need to do is increase league wide player escrow by a similar amount to adjust back to equal partnership of sharing revenue. While this escrow figure does involve the NHLPA the other option would be a league wide salary rollback of all contracts so escrow is the better option or better of two evils from a players perspective.

 

[BruinsBtn]

I'm not buying Burke's 50% cap either, however there could be a $10-12 mil drop say from $81.5 to say $70 mil if the season is not competed, due to lost revenue.

This is where the NHL comes up with ways for teams to get in cap compliancy via 1 time buyouts that don't count against the teams salary cap going forward. ie Leafs could buy out Tavares and save $11 mil with no cap hit penalty and play at $70 mil next year with a full team.. This is what the NHL did when they went from no cap to a cap system and again when there was a partial lockout year. So this is not a new idea, but one already used in the past. In fact in the past the buyout QTY was unlimited as to how many contracts a team could buyout, and Leafs might buy out 3 X 3-$4 mil contracts (ie AJ, Kapanen and Kerfoot) instead of 1 big one like JT.

This option doesn't involve NHLPA approval because buyouts are part of the CBA now as tools for teams to use. The only change would be NHL owners agreeing that this one time buyout option of contracts due to the virus impact does not count against the teams salary cap like normal buyouts would. .However the buyout tool is there to keep owners honest, it has nothing to do with players.

The bought out players get their money (2/3rds now and that might be changed to 100%) and then get to double dip by signing a new deal again overlapping the contract years of the bought-out one. This more money to the player.

The other option I mentioned was player escrow which is also a management/ownership tool in the CBA of withholding player wages to make sure there is a 50-50 profit/loss split. If the Salary Cap drops 10-15% from last year all the owner need to do is increase league wide player escrow by a similar amount to adjust back to equal partnership of sharing revenue. While this escrow figure does involve the NHLPA the other option would be a league wide salary rollback of all contracts so escrow is the better option or better of two evils from a players perspective.

It won't be compliance. It will be a phantom cap.

The cap will still say $84m but everyone will get a 20% haircut. So your $10m contract is really $8m. The official cap will still be $84m but the real cap will be $67m. Adjust the numbers as needed.

Owners aren't going to go for compliance buyouts because those are made with real dollars.

 

[HamiltonNHL]

I think they should play the season by putting all teams in the playoffs ! Go !

 

[TOGuy14]

Brian Burke auditioning hard for that Coach's Corner spot on Saturday night with crazy rants.

The league will have a significant one year revenue drop this year but they will figure out a plan to smooth things over. They won't just let the cap drop 50% and tell teams to figure it out.

 

[JT AM da real deal]

they just said playoff tv and sponsorship alone are 4-500 million. So that must just be regular season

Not sure it was a TSN quote ... they were saying NHL TV deal like less than 10% of overall revenue whereas other major leagues it is over 50%

 

[JT AM da real deal]

With a 81.5M CAP and 30% escrow for a 1 off 2020/21 season we could see Mik 1.25M Dermy 1.25M Clifford at 1M and Spezza 1M all on 1 year deals to keep team together at CAP.
Then following season we have Freddy, Hyman and same 4 guys above looking for deals. Back to CAP hell.

 

[darrylsittler27]

Sounds like we lose players anyway you slice it.

 

[keonsbitterness]

NBA players just agreed to a 25% salary reduction effective May 15, which kills the fantasy of an $80m NHL cap for 20-21 if they are forced to play the season in empty arenas. We're talking a massive cap adjustment that would need to be negotiated, probably some kind of a pro-rated system.

Also, it's one thing to finish the 19-20 season isolated for a month or two in a remote area(s), but there is no way the NHL can do that for a complete 20-21 season. Issues such as testing, tracing, and no doubt others are expenses that would have to be accounted for

 

[JT AM da real deal]

NBA players just agreed to a 25% salary reduction effective May 15, which kills the fantasy of an $80m NHL cap for 20-21 if they are forced to play the season in empty arenas. We're talking a massive cap adjustment that would need to be negotiated, probably some kind of a pro-rated system.

Also, it's one thing to finish the 19-20 season isolated for a month or two in a remote area(s), but there is no way the NHL can do that for a complete 20-21 season. Issues such as testing, tracing, and no doubt others are expenses that would have to be accounted for

2019/20 finishing season/playoffs will happen without fans in stands for any league who wants to do it. The NBA is doing it. It clearly is worth it to both players and owners to work out this deal on pay.
The more I think about it I can't see how NHL can afford it. Da players are paid by team. For sure they want a chance at cup for teams still in it. But who is paying for arena rents, personnel, PPE, hotels, food, transportation, etc at these neutral zone games? I guess league would have to. Da teams not getting any revenue from it. It seems like a lot to deal with to declare a Cup winner in front of no fans and with $$$ losses. Maybe best for NHL $$$ to just pack it in and hope next season they can get gate revenues back. or if no cure or vaccine then wait to 2022 season.

 

[kb]

2019/20 finishing season/playoffs will happen without fans in stands for any league who wants to do it. The NBA is doing it. It clearly is worth it to both players and owners to work out this deal on pay.
The more I think about it I can't see how NHL can afford it. Da players are paid by team. For sure they want a chance at cup for teams still in it. But who is paying for arena rents, personnel, PPE, hotels, food, transportation, etc at these neutral zone games? I guess league would have to. Da teams not getting any revenue from it. It seems like a lot to deal with to declare a Cup winner in front of no fans and with $$$ losses. Maybe best for NHL $$$ to just pack it in and hope next season they can get gate revenues back. or if no cure or vaccine then wait to 2022 season.

The reason they may be so anxious to get the season in is that perhaps the TV deals require that the full season and playoffs be completed, or the networks will only pay for the portion of the season they had?

In other words, no gate alone is the lesser of two evils between no gate money and no gate/TV money?

 

[JT AM da real deal]

The reason they may be so anxious to get the season in is that perhaps the TV deals require that the full season and playoffs be completed, or the networks will only pay for the portion of the season they had?

In other words, no gate alone is the lesser of two evils between no gate money and no gate/TV money?

Good point ... there has to be a reason ... it can't be just optics. But if they have to write a big check maybe loss from neutral site games is cheaper than writing TV rebate check.