Concept of a Hard Cap

Discussion in 'The Business of Hockey' started by AlexGodynyuk, Feb 10, 2005.

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  1. AlexGodynyuk

    AlexGodynyuk Registered User

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    Has anybody sat down and really thought about how a hard cap would be implemented?
    Currently only one league (the NFL) has a hard salary cap. A very big part of the reason it works in the NFL is because contracts aren't guaranteed and teams can cut players/move them around to squeeze under the cap.
    Since the NHL insists that contracts will continue to be guaranteed, I see teams having a very hard time working within the confines of this cap.
    What I think you will see is a lot of short contracts (so that teams can have expiring contracts/cap space every year to sign/re-sign players) combined with a lot of contract buyouts (this is assuming that buyouts will not count against the cap, which they actually do in the NBA and NFL).
    The NFL also has no arbitration system. An arbitration system will wreak havoc on a hard cap system.
    As much as I dislike the PA and think their offer was a joke, I just can't see how the owner's system would work either, with a small gap between the floor and ceiling (only 10M), I just think it would end up being a nightmare.
     
  2. The gap between 32 million and 42 million is pretty significant and I'm sure the union could have negotiated all the way up to 55 or even higher.
     
  3. That gap is 33%, one of the triggers that Bettman refered to yesterday. And no, the union could not negotiate all the way to $55 million as that would be 78% of revenues, which is completely unacceptable to the NHL, and any business for that matter. The highest the NHLPA could likely have pushed for would have been $45 million, or 65% of league revenues.
     
  4. AlexGodynyuk

    AlexGodynyuk Registered User

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    I don't find the gap that significant when you consider that it can be filled by the salaries of 3 medium-good players (Assuming that salaries go down, a "good" player, borderline all-star guy should make around 3-4 million).
    Look at a team like the Flames from last year. Assume that using this system they were at or near the salary floor. They have a good year, a bunch of players over-achieve and opt for arbitration (Kipper, Iginla, others). You don't think that $10 million would be used up in a hurry?
     
  5. Guest

    Guest Registered User

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    You've brought up a good point about arbitration specifically. Maybe they should have a clause with a cap that would only put the team on the hook for the cap at the amount the player made on their last contract, and the rest of the sum is uncapped. So for example, if Iginla is making $6 million a season, goes to arbitration and gets $10 million a season, the Flames only have $6 million counting towards the cap.

    Arbitration is a monster regardless. As well, having a cap and guaranteed contracts is contradictary in itself.
     
  6. There is no way all 30 teams could have 55 million dollar payrolls, it would merely be the ceiling. With a 55 million cap, player salaries would not be close to 78% of revenues. If the NHLPA accepted some form of cap, they could have probably gotten 60+ million. Remember, there are what, 4 teams with payrolls near 80 million? The NHL wants to handcuff the big spenders. There are about 6 teams that ruin it for everybody and even a 60 million dollar cap will eliminate some of the ridiculousness. Add in two way arbitration and the owners would jump all over that deal.
     
  7. AlexGodynyuk

    AlexGodynyuk Registered User

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    I can't see either side agreeing to that. That cap is far too high.
    I'm a big NBA fan and think that they have devised almost the perfect CBA in terms of allowing small market teams to compete and big market teams to spend.
    Does anyone else have a good knowledge of the NBA CBA and think that it would work great in hockey?
     
  8. gobuds

    gobuds Registered User

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    truth is, in the nfl teams exceed the hard cap- they pay for it the next year but you can exceed the cap- fact! Check it out
     
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