EricBowser
Registered User
Gary Bettman was all for a luxury tax ten years ago, now he's completely against it. The NHLPA is against a hard salary cap but they are against a luxury tax system that would address the problems.
Since the salary cap is a non-starter for the NHLPA, let's first look at a luxury tax system that I've designed to address both parties.
My Luxury Tax System
* Reduce roster size to 22 players
* Accept NHLPA's 24% rollback offer on all existing contracts
Year 1
Team A Payroll $40,000,000 - $35,000,000 threshold = $5,000,000 x .25 rate = $1,250,000 tax
Team B Payroll $50,000,000 - $35,000,000 threshold = $15,000,000 x .50 rate = $7,500,000 tax
Team C Payroll $60,000,000 - $35,000,000 threshold = $25,000,000 x .75 rate = $18,750,000 tax
Team D Payroll $70,000,000 - $35,000,000 threshold = $35,000,000 x .85 rate = $29,750,000 tax
Team E Payroll $80,000,000 - $35,000,000 threshold = $45,000,000 x 1.00 rate = $45,000,000 tax
2nd Consecutive Year
Team A Payroll $40,000,000 - $35,000,000 threshold = $5,000,000 x .25 rate = $1,250,000 tax + 5th Round Pick
Team B Payroll $50,000,000 - $35,000,000 threshold = $15,000,000 x .50 rate = $7,500,000 tax + 3rd Round Pick
Team C Payroll $60,000,000 - $35,000,000 threshold = $25,000,000 x .75 rate = $18,750,000 tax + 2nd Round Pick
Team D Payroll $70,000,000 - $35,000,000 threshold = $35,000,000 x .85 rate = $29,750,000 tax + 1st Round Pick
Team E Payroll $80,000,000 - $35,000,000 threshold = $45,000,000 x 1.00 rate = $45,000,000 tax + 1st and 2nd Round Pick
3rd Consecutive Year or more
Team A Payroll $40,000,000 - $35,000,000 threshold = $5,000,000 x .25 rate = $1,250,000 tax + 4th Round Pick
Team B Payroll $50,000,000 - $35,000,000 threshold = $15,000,000 x .50 rate = $7,500,000 tax + 2nd Round Pick
Team C Payroll $60,000,000 - $35,000,000 threshold = $25,000,000 x .75 rate = $18,750,000 tax + 1st Round Pick
Team D Payroll $70,000,000 - $35,000,000 threshold = $35,000,000 x .85 rate = $29,750,000 tax + 1st and 2nd Round Pick
Team E Payroll $80,000,000 - $35,000,000 threshold = $45,000,000 x 1.00 rate = $45,000,000 tax + 1st, 2nd, and 3rd Round Pick
Teams must spend $30,000,000 as a salary floor requirement to receive revenue-sharing
Revenue-Sharing
* Luxury Tax
* Teams will share the following
1. 30 percent of regular-season gate revenue
2. 10 percent of regular-season broadcast revenue (local, cable, radio, and new media)
3. 10 percent of in-arena revenue (luxury suites, concessions, etc.)
* 100 percent of the league's national television revenue
* 100 percent of the league's national sponsorship revenue
* 100 percent of the league's special games revenue (All-Star game, skills competition, Heritage Classic, etc.)
* League will subtract their operating costs and remaining will be divided evenly among the 30 teams
* Qualifying Offers
- Team must offer 85% to retain fifth and sixth year rights of an unsigned player
* Arbitration
- Team must offer 85% to retain fifth and sixth year rights of an unsigned player
- Players looking for their 5th or 6th year contract can file or be taken to arbitration
- Players can file for two-year contract and the team only file for one-year contract
- Teams can walk-away from two-year contract awards
- Players can file for arbitration both years and teams only once per player
- Teams have no limit for per season arbitration filing
- Players can file for any annual base salary, teams can not go below $400,000
- Judge can only select the player or team salary filing, not his own arbitrary award
* Entry Level Contracts
- Four years in length
- Contract is two-way assignment, waiver rules do not apply
- $850,000 maximum base salary per season
- $850,000 maximum performance bonus per season
- $250,000 maximum signing bonus per season
* Minimum Salary Requirements
- $300,000 for players in 1-4 contract year
- $400,000 for players in 5-7 contract year
- $500,000 for players in 8+ contract year
* Unrestricted Free Agency
- After 2005-2006 season, any unsigned player with 8 NHL contract seasons can file for UFA
- After 2006-2007 and beyond, any unsigned player with 6 NHL contract seasons can file for UFA
* Franchise Tag
- Team can designate one player after he's fulfilled his ELC and can only be a player the team drafted
- Tag is only for one season unless both parties can agree to contract
- Player must receive the average salary of those in the top five at his position for one year contract
- Franchise tag contract for three or more seasons will only count 60% per season towards team payroll so a team isn't penalized with a tax by resigning a franchise player.
* Contracts are guaranteed, any signed player holding out after missing one regular season game must pay $1 million fine to re-enter the league and serve out his contract.
My Cap System
* Phase-in the Salary Cap System
Year 1 2004-2005 Season
Team A Payroll $40,000,000 - $38,000,000 threshold = $2,000,000 x .10 rate = $200,000 tax
Team B Payroll $50,000,000 - $38,000,000 threshold = $12,000,000 x .25 rate = $3,000,000 tax
Team C Payroll $60,000,000 - $38,000,000 threshold = $22,000,000 x .50 rate = $11,000,000 tax
Team D Payroll $70,000,000 - $38,000,000 threshold = $32,000,000 x .75 rate = $24,000,000 tax
Team E Payroll $80,000,000+ - $38,000,000 threshold = $42,000,000 x 1.00 rate = $42,000,000 tax
Year 2 2005-2006 Season
Team A Payroll $40,000,000 - $38,000,000 threshold = $2,000,000 x .10 rate = $200,000 tax
Team B Payroll $50,000,000 - $38,000,000 threshold = $12,000,000 x .25 rate = $3,000,000 tax
Team C Payroll $60,000,000 - $38,000,000 threshold = $22,000,000 x .50 rate = $11,000,000 tax
Team D Payroll $70,000,000 - $38,000,000 threshold = $32,000,000 x .75 rate = $24,000,000 tax
Team E Payroll $80,000,000+ - $38,000,000 threshold = $42,000,000 x 1.00 rate = $42,000,000 tax
Year 3 2006-2007
Minimum Salary Cap = $32 million x 30 teams = $960 million, average player salary $1.45 million
Maximum Salary Cap = $38 million x 30 teams = $1.14 billion, average player salary $1.73 million
Year 4 2007-2008
Minimum Salary Cap = $32 million x 30 teams = $960 million, average player salary $1.45 million
Maximum Salary Cap = $38 million x 30 teams = $1.14 billion, average player salary $1.73 million
Year 5 2008-2009 (cap will adjust based on formula below)
Year 6 2009-2010 (cap will adjust based on formula below)
Year 7 2010-2011 (cap will adjust based on formula below)
Cap Adjustment Formula
For Year 5 The average league designated hockey revenue from Year 2 to Year 4 x 55% = new maximum cap
For Year 6 The average league designated hockey revenue from Year 3 to Year 5 x 57% = new maximum cap
For Year 7 The average league designated hockey revenue from Year 4 to Year 6 x 59% = new maximum cap
Since the salary cap is a non-starter for the NHLPA, let's first look at a luxury tax system that I've designed to address both parties.
My Luxury Tax System
* Reduce roster size to 22 players
* Accept NHLPA's 24% rollback offer on all existing contracts
Year 1
Team A Payroll $40,000,000 - $35,000,000 threshold = $5,000,000 x .25 rate = $1,250,000 tax
Team B Payroll $50,000,000 - $35,000,000 threshold = $15,000,000 x .50 rate = $7,500,000 tax
Team C Payroll $60,000,000 - $35,000,000 threshold = $25,000,000 x .75 rate = $18,750,000 tax
Team D Payroll $70,000,000 - $35,000,000 threshold = $35,000,000 x .85 rate = $29,750,000 tax
Team E Payroll $80,000,000 - $35,000,000 threshold = $45,000,000 x 1.00 rate = $45,000,000 tax
2nd Consecutive Year
Team A Payroll $40,000,000 - $35,000,000 threshold = $5,000,000 x .25 rate = $1,250,000 tax + 5th Round Pick
Team B Payroll $50,000,000 - $35,000,000 threshold = $15,000,000 x .50 rate = $7,500,000 tax + 3rd Round Pick
Team C Payroll $60,000,000 - $35,000,000 threshold = $25,000,000 x .75 rate = $18,750,000 tax + 2nd Round Pick
Team D Payroll $70,000,000 - $35,000,000 threshold = $35,000,000 x .85 rate = $29,750,000 tax + 1st Round Pick
Team E Payroll $80,000,000 - $35,000,000 threshold = $45,000,000 x 1.00 rate = $45,000,000 tax + 1st and 2nd Round Pick
3rd Consecutive Year or more
Team A Payroll $40,000,000 - $35,000,000 threshold = $5,000,000 x .25 rate = $1,250,000 tax + 4th Round Pick
Team B Payroll $50,000,000 - $35,000,000 threshold = $15,000,000 x .50 rate = $7,500,000 tax + 2nd Round Pick
Team C Payroll $60,000,000 - $35,000,000 threshold = $25,000,000 x .75 rate = $18,750,000 tax + 1st Round Pick
Team D Payroll $70,000,000 - $35,000,000 threshold = $35,000,000 x .85 rate = $29,750,000 tax + 1st and 2nd Round Pick
Team E Payroll $80,000,000 - $35,000,000 threshold = $45,000,000 x 1.00 rate = $45,000,000 tax + 1st, 2nd, and 3rd Round Pick
Teams must spend $30,000,000 as a salary floor requirement to receive revenue-sharing
Revenue-Sharing
* Luxury Tax
* Teams will share the following
1. 30 percent of regular-season gate revenue
2. 10 percent of regular-season broadcast revenue (local, cable, radio, and new media)
3. 10 percent of in-arena revenue (luxury suites, concessions, etc.)
* 100 percent of the league's national television revenue
* 100 percent of the league's national sponsorship revenue
* 100 percent of the league's special games revenue (All-Star game, skills competition, Heritage Classic, etc.)
* League will subtract their operating costs and remaining will be divided evenly among the 30 teams
* Qualifying Offers
- Team must offer 85% to retain fifth and sixth year rights of an unsigned player
* Arbitration
- Team must offer 85% to retain fifth and sixth year rights of an unsigned player
- Players looking for their 5th or 6th year contract can file or be taken to arbitration
- Players can file for two-year contract and the team only file for one-year contract
- Teams can walk-away from two-year contract awards
- Players can file for arbitration both years and teams only once per player
- Teams have no limit for per season arbitration filing
- Players can file for any annual base salary, teams can not go below $400,000
- Judge can only select the player or team salary filing, not his own arbitrary award
* Entry Level Contracts
- Four years in length
- Contract is two-way assignment, waiver rules do not apply
- $850,000 maximum base salary per season
- $850,000 maximum performance bonus per season
- $250,000 maximum signing bonus per season
* Minimum Salary Requirements
- $300,000 for players in 1-4 contract year
- $400,000 for players in 5-7 contract year
- $500,000 for players in 8+ contract year
* Unrestricted Free Agency
- After 2005-2006 season, any unsigned player with 8 NHL contract seasons can file for UFA
- After 2006-2007 and beyond, any unsigned player with 6 NHL contract seasons can file for UFA
* Franchise Tag
- Team can designate one player after he's fulfilled his ELC and can only be a player the team drafted
- Tag is only for one season unless both parties can agree to contract
- Player must receive the average salary of those in the top five at his position for one year contract
- Franchise tag contract for three or more seasons will only count 60% per season towards team payroll so a team isn't penalized with a tax by resigning a franchise player.
* Contracts are guaranteed, any signed player holding out after missing one regular season game must pay $1 million fine to re-enter the league and serve out his contract.
My Cap System
* Phase-in the Salary Cap System
Year 1 2004-2005 Season
Team A Payroll $40,000,000 - $38,000,000 threshold = $2,000,000 x .10 rate = $200,000 tax
Team B Payroll $50,000,000 - $38,000,000 threshold = $12,000,000 x .25 rate = $3,000,000 tax
Team C Payroll $60,000,000 - $38,000,000 threshold = $22,000,000 x .50 rate = $11,000,000 tax
Team D Payroll $70,000,000 - $38,000,000 threshold = $32,000,000 x .75 rate = $24,000,000 tax
Team E Payroll $80,000,000+ - $38,000,000 threshold = $42,000,000 x 1.00 rate = $42,000,000 tax
Year 2 2005-2006 Season
Team A Payroll $40,000,000 - $38,000,000 threshold = $2,000,000 x .10 rate = $200,000 tax
Team B Payroll $50,000,000 - $38,000,000 threshold = $12,000,000 x .25 rate = $3,000,000 tax
Team C Payroll $60,000,000 - $38,000,000 threshold = $22,000,000 x .50 rate = $11,000,000 tax
Team D Payroll $70,000,000 - $38,000,000 threshold = $32,000,000 x .75 rate = $24,000,000 tax
Team E Payroll $80,000,000+ - $38,000,000 threshold = $42,000,000 x 1.00 rate = $42,000,000 tax
Year 3 2006-2007
Minimum Salary Cap = $32 million x 30 teams = $960 million, average player salary $1.45 million
Maximum Salary Cap = $38 million x 30 teams = $1.14 billion, average player salary $1.73 million
Year 4 2007-2008
Minimum Salary Cap = $32 million x 30 teams = $960 million, average player salary $1.45 million
Maximum Salary Cap = $38 million x 30 teams = $1.14 billion, average player salary $1.73 million
Year 5 2008-2009 (cap will adjust based on formula below)
Year 6 2009-2010 (cap will adjust based on formula below)
Year 7 2010-2011 (cap will adjust based on formula below)
Cap Adjustment Formula
For Year 5 The average league designated hockey revenue from Year 2 to Year 4 x 55% = new maximum cap
For Year 6 The average league designated hockey revenue from Year 3 to Year 5 x 57% = new maximum cap
For Year 7 The average league designated hockey revenue from Year 4 to Year 6 x 59% = new maximum cap