Buying cap space

Discussion in 'The Business of Hockey' started by Stephen, Jul 17, 2005.

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  1. Stephen

    Stephen Registered User

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    Here's my wacky idea for the day. Imagine a team wants to go over the salary cap to keep a core player, or the team wants to add the missing piece to the puzzle at the trade deadline. What if this team were able to literally buy more cap space from a lower budget team by trading a percentage of the dollar amount they wish to go over by to a team who has cap space.

    Imagine a scenario where the New York Rangers needed $5 million in cap space to add a free agent. They could go out and pay another team a $5 million in cash or a big percentage of that $5 million to increase their team cap. This allows for the big market teams to spend more, or teams with good cores the option of keeping the team together, though with a heavy penalty, and gives poor teams a new source of revenue and money to pay its players down the road. To keep this from going out of control, a team would be allowed to buy/sell a maximum of $10 million for the sake of competition/parity. This would make for some meaningful revenue sharing.

    What does everybody think?
     
  2. GKJ

    GKJ Global Moderator

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    No.
     
  3. boredmale

    boredmale Registered User

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    i say you should not be able to buy more then 5 million. Beyond that they should charge throught the nose, make teams pay 2 million dollars for ever million dollars above the cap.

    It should also not be available for trade, it should be run by the league and the league distributes that money they make from extra cap room to lower level teams to help them pay salaries.
     
  4. MykeAbner

    MykeAbner Registered User

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    One of the main reasons for a salary cap is to prevent teams like the Leafs from just buying their way to a championship.

    You might as well move UFA age to 35 but make it so that players can become a UFA at 31 if they want.
     
  5. Stephen

    Stephen Registered User

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    It's not really about the Leafs at all.

    It's about giving about $5 million in wiggle room for teams who may need it. I think this system would allow teams that need to go over to do so, but at a very heavy cost. When a poor team has not maxed out its cap room, it allows them to generate a very healthy financial return that can help them turn a profit or cover expenses that it wouldn't be able to otherwise. This basically amounts to direct revenue sharing, but not to the point where competition will be compromised.
     
  6. Skk82

    Skk82 Registered User

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    large market teams buying cap space from small market teams inherently defeats the whole purpose of having a salary cap.
     
  7. Stephen

    Stephen Registered User

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    Not when the system penalizes teams that go over the cap, and gives poor teams more assets to work with.
     
  8. Trizent

    Trizent Registered User

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    If teams need wiggle room, they need to budget $35M and that will give them room to move up.

    The thought that teams should max out salary cap and then have more room to wiggle is what makes Mastercard and the other credit card companies rich.
     
  9. Sens4Cup

    Sens4Cup Registered User

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    Leafs fans on these boards often seem to have a couple of different ideas:

    1. Players will play cheaply for the Leafs and they'll be able to stack their team.
    2. There will be some way of circumventing(avoiding) the cap.

    Neither of these seem likely. Players coming to Toronto is not out of the question, but players that will accept 500K or 1 million when they could 3-5 million from another team, those kinds of things aren't going to happen. As people have posted, union members are going to be under pressure to maintain the market value of the players, not undercut it.

    In addition, there are only a handful of players who would accept less than market value to stay with a team, and generally these are guys who have been career long players for those teams. Thus Detroit may be able to sign Yzerman cheaply as he's a career Red Wing. But to think guys like Roberts and Nieuwendyk would accept league minimum salaries to keep playing for the Leafs is unrealistic. This same issue arises with Boston fans who believe they can buy a championship next season, which seems just as unlikely.

    While free agents will come cheaper than before, the key to this league will be sound financial management. The cost of having an aging veteran club may show up in cap room occupied by injured players. While the costs of having a young team may be losing some of its players at earlier ages.
     
  10. Stephen

    Stephen Registered User

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    Your comment has nothing to do with what I'm proposing here. I think Ottawa Senators fans care more about putting down the Leafs than they do about hockey. :shakehead:

    Imagine a situation where a team has to resign one of its free agents. Instead of being forced to walk away from a top line player for nothing because of cap issues or keeping him at the cost of getting rid of decent support players, you go out and buy some cap room from a team that isn't using that money anyway.

    This allows rich or talented teams to keep teams together, and it allows teams to load up for playoff runs at the deadline. They are forced to pay huge fines in essence. It also allows for injury replacements, etc. Poor teams benefit directly from this as well. If you're spending $25 million on your payroll and you sell $5 million away, it will give you $5 million in revenues which can go to the payroll next year.

    This scheme would definitely come in handy for the Torontos and Philadelphias of the world, but at the same time, it would give a poor team with low revenues to benefit financially and reinvest in the team.
     
  11. Jag68Sid87

    Jag68Sid87 Nothing Else Maattas

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    As mentioned previously, if you want wiggle room think $34 million cap. There's your $5 million wiggle room.

    As for teams loading up before the playoffs, it can and will be done in the future under the new system. It's just WHO will do the loading up that will be different. Teams that are suddenly contenders but only spent $24 million by the trade deadline will look to add talent. As long as they don't physically spend more than $39 million by season's end, they'll be fine.

    So, if you want your Leafs to load up at the deadline you better hope for a few buyouts, a few un-qualified RFA's, no dipping back into the UFA market this summer and a surprisingly strong start to the 2005-06 season with a roster littered with players from down on the farm.

    You can no longer have your cake and eat it too.
     
  12. Resolute

    Resolute Registered User

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    Here is a really easy concept for fans of large market teams:

    If you want wiggle room, dont spend up to the cap right away!

    Lets use a handy math equasion: $39 million - x = y, where x is the amount of cap space you want, and y is the payroll you should have to earn it.

    So, if you want $5 million in wiggle room, simply spend $39 million - $5 million, or $34 million.

    Kinda blows your mind, doesn't it?


    Or, the non sarcastic answer to your comment: That would defeat the entire purpose of a salary cap. What you are proposing is a luxury tax, not a cap. The luxury tax was rejected a year ago. It has no hope of ever forming the basis of an economic structure in the NHL, nor should it ever form the basis of an economic structure. The Leafs will just have to accept that they need to be smart about their player decisions. Toronto will have to learn the fine art of player aquisitions, rather than using money as a blunt object.
     
  13. Stephen

    Stephen Registered User

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    I think the fact that I have a Mats Sundin avatar makes my ideas less appealing. Every post here seems to dismiss these ideas as some kind of Leaf plot to get around the cap.

    I see a ton of teams that could use this kind of thing. A team like Colorado can now pay a big fine to keep their core intact. In the future, Ottawa could use the extra room so they won't have to choose between keeping Chara or Redden and Havlat when they can do so financially, or Tampa Bay choosing between keeping Lecavalier and dumping Modin and Kubina. This lets a team at the cap limit add a Phillippe Boucher at the trade deadline.

    When you're paying a luxury tax fine to a specific team, it ensures that that a poor team gets cold hard cash. Lets say the rebuilding Penguins at the cap floor sell $5 million in cap space to the Leafs one year and $3 million to the Flyers the next year. That's FREE REVENUE to the tune of $8 million that can be invested into the team as it matures, allowing it to either keep its young players or buy a free agent.

    Yes, it's a luxury tax, but it's a very limited one designed to allow for a bit of wiggle room, not rampant abuse. It's good for fans of rich teams like the evil Leafs, who will be able to pay through the nose to get another Brian Leetch at the deadline, but it will also put those evil Leaf dollars into the pocket of some random team who isn't giving up anything at all. It's also good for teams who have a lot of players they have to resign as it allows for flexibility to keep players.
     
  14. Sixty Six

    Sixty Six Registered User

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    As a pens fan i don't mind this at all. The pens are not gonna spend up to the ceiling they should be able to add money/prospects for some of this cap room but limit it to 3 million or so. That takes you to the 42 million that was offered in feb.
     
  15. Stephen

    Stephen Registered User

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    I see it as less of a problem for Toronto, where we have very little worth keeping anyway than it is for a team like Tampa Bay or Atlanta, who will have a ton of players they'd want to keep.

    Do you think that you'll be able to keep a core with Kovalchuk, Heatley, Lehtonen, Coburn and whomever, or a team with Lecavalier, Richards, St. Louis, Kubina, Khabibulin together with a decent supporting cast at $34 million? The extra $5 million is the difference between a top six forward and a top four defenseman or two minimum salary AHL call-ups. It's a big difference

    The extra bit of flexibility gives fans of teams who are competing a better product, and it's free money for a team that isn't using its cap space. What's the problem?
     
  16. Empireshark

    Empireshark Registered User

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    Wow !!! A Toronto fan trying to come up with another way to try and circumvent the cap - what a surprise. I honestly don't understand why you guys keep looking for loop holes, from what I understand everyone in the league wants to play for the Leafs and they're willing to play for peanuts. Come on now, instead of asking everybody if you think that your latest loophole has a snowballs chance in hell of working why don't you talk about more constructive things like amateur scouting and prospect development.
     
  17. Sens4Cup

    Sens4Cup Registered User

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    It is curious how one of the league's top spending teams has done nothing in the way of developing top prospects anywhere near as well as the rest of the league. I guess with a 65 million dollar payroll there must have only been an extra 500K to spend on scouting or something. Though also trading away first round picks in two quite solid drafts would also hurt your chances, as well as the 4th overall pick in 1997 that was used to draft Roberto Luongo.
     
  18. Stephen

    Stephen Registered User

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    The ideas are fundamentally sound, and they benefit everybody.

    It's not a loophole but a better economic system that allows for flexibility and more money going to poor teams.

    If you're going to completely trash my ideas without debating its merits, why don't you just stay on the Montreal board and count down the days till Lecavalier comes home?
     
  19. Stephen

    Stephen Registered User

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    It's curious how Ottawa's fans are more preoccupied with the shortcomings of Leafs management than they are at the inability of their Senators to win a round versus Toronto in the playoffs.

    What's more troubling: the mistakes of an idiot, or the idiot who beats you every year?
     
  20. Resolute

    Resolute Registered User

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    I dont think for a second that the Lightning and Thrashers will be able to keep those cores together long term.

    Fact is, they werent going to be able to under the old deal either. Nor are they likely to be able to afford to purchase cap space to keep the teams together.

    The only teams that your plan could possibly benefit are the large market teams, and that is why so many people, including myself, are rushing to call this a proposal designed to benefit the Leafs.

    Player movement is inevitable. If the Thrashers and Lightning have good people in management positions, and are able to replace the players they lose with quality, then they will do fine.

    As for suplimenting revenue, it is a false revenue stream. The last thing the poorer teams need is to become dependant on an uncertian revenue stream. If teams that go over your luxury tax threshold decide to stop that practice, then the lower teams that depend on that money to pay their players suddenly start to lose money.
     
  21. HabsoluteFate

    HabsoluteFate Registered User

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    First of all no...if we do that then where's the parity? You would still have teams like the Rangers or the Leafs buying their way to the championship...

    I heard somewhere (I think it might be on a show called 110%) that teams can still go over the cap as long as the average throughout the entire year is 39 million dollars...for example a team could be at 37 million all year and at the trade deadline get a 5 million a year player and still average 39 or less the entire year...
     
  22. Stephen

    Stephen Registered User

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    This isn't going to be a steady revenue source at all for the poor teams. It is a strictly controlled cash transaction that won't exceed a certain controlled amount per year. It's a temporary cash injection.

    This system will definitely benefit the Leafs on ice if they choose to exercise this kind of option. At the very least, a million dollars of extra room could mean the difference between resigning someone for $2.5 million or letting them walk because you only have room to pay him $1.5 million, or resigning resigning your franchise player without having to dump a couple of lesser lights. If we capped this kind of wiggle room/luxury tax at about $4-5 million, the on ice difference is going to be a first line player, or a top six forward and a top four defenseman. Sure player movement is going to happen, but as a fan of a team, you don't want it to happen.

    On the other end of the spectrum, a team that is at $25 million dollars can sell some of its cap room, which could potentially inject as much as $5 million into that payroll the following year. It's simply not just the big bad Leafs taking advantage of everybody else.
     
  23. Stephen

    Stephen Registered User

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    The Leafs and Rangers weren't winning championships when they were spending money like crazy, how is an extra $4-5 million going to put them over the top if they don't have a good developmental system in place?
     
  24. Empireshark

    Empireshark Registered User

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    OK then riddle me this leaf fan, how am I going to spend all of my new found riches if I've just sold you all my cap space. This isn't some better economic system that you've discovered it's just another ridiculous attempt to circumvent the cap by Leaf fans who are subconsiously terrified of the new reality.

    Don't worry I am already counting down the days until Vinny and Sidney come to Montreal. This new free agency thing is going to work out just fine I think.
     
  25. DanKramerHabs

    DanKramerHabs HFBoards Partner

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    First, this has nothing to do with the fact that you are a Leafs fan. But it is things like what you proposed that are exactly what the Leafs would want and where the problem lies. There is a new economic system in the NHL. Get with it. No, you can't spend more than any other team is allowed to. Not even if you throw chunks of cash at someone. Sorry.

    Really that proposal just re-widens the big market / small market team gap, defeating the purpose of the lockout.

    This is the same situation facing every NHL team. They will have to make decisions, just like many Leafs fans are posting how the Leafs will end up with Sundin, Lindros, Allison, Belfour, and whoever else. It's doable, it's just all about asset management.
     
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