Could this work to bypass the cap?

Discussion in 'The Business of Hockey' started by Coffey77, Jun 24, 2005.

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  1. Coffey77

    Coffey77 Registered User

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    Just wondering. Whenever the CBA is signed, teams will be looking at any loophole they can to gain an advantage over the other teams.

    Could this example work? Detroit is in huge cap trouble and Yzerman is a UFA and has expressed an interest in coming back for one more year. So the Wings sign him for one year at the league minimum ($300,000 right?). They also have an agreement that when he retires and joins management in say scouting they will pay him $3 million for that year to be a scout.

    Anyone have any other ideas on how teams might get around the cap?
     
  2. WVP

    WVP Registered User

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    I heard Holik is going to be paid in lottery tickets.
     
  3. Jaded-Fan

    Jaded-Fan Registered User

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    In the NFL this would get you a fine of quite a few First RD. picks. I would guess the same in the NHL under the new CBA.
     
  4. MattintheHatt

    MattintheHatt Registered User

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    Yeah, I dont doubt they'd prevent this. THey are looking over EVERY SINGLE loophole, this thing will be practically flawless, with the time they are putting into it.

    No more mistakes, this time!
     
  5. Coffey77

    Coffey77 Registered User

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    I see. The CBA is going to take a while to make if it's going to be tamper proof.

    I'm curious, what do NFL teams do to manipulate the salary cap?
     
  6. Kritter471

    Kritter471 Registered User

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    I don't think you could do that in writing, but my guess is the parties could come to an off-the-books agreement of something like that and there's not much the league could do about it.
     
  7. Coffey77

    Coffey77 Registered User

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    Hehe, I just watched Schindler's List again recently. Maybe they could try pots and pans. :)
     
  8. Jaded-Fan

    Jaded-Fan Registered User

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    Question 1.13
    So...what happens if a team goes over the Salary Cap?

    Answer: The short answer is simply that no team CAN go over the Salary Cap. Note that every contract must go through the NFL League Office before the deal can be made official. Presumably, one of the things the league must do at this time is determine whether or not the contract would violate the NFL's Salary Cap. If the deal does violate the cap, then the NFL will reject it.

    There have been instances in which a team has managed to sneak a cap evading contract by the league. Upon further review, the violations were caught by the league and the respective teams were penalized. Penalties include fines and/or forfeiture of draft picks. In recent history both the Pittsburgh Steelers and San Francisco 49ers have been penalized draft picks, while the 49ers' front office personnel (Carmen Policy and Dwight Clark) were also fined.


    http://www.askthecommish.com/salarycap/faq.asp
     
  9. Mess

    Mess Global Moderator

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    There are a million ways around a Cap .. I doubt that the NHL CBA can think of All of them ..

    For Example .. Every team goes out and gets sponsorship money each year to cover cost particularly wages ..

    So the team gets a $5 mil sponsorship from Nike .. for example .. but rather then getting the whole $5 mil they say give $2 mil directly to UFA player X , and as part of the deal UFA X agrees to play for a much lower cap friendly number and that is the contract that is registered with the league, and considers the money from Nike his Signing bonus .. He could even do a few guest appearences to really sell it.

    How could the NHL prevent that ??
     
  10. Drury_Sakic

    Drury_Sakic Registered User

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    that's allowed... as long as the team is not getting the money from nike first, then giving it to player X...all "team benefits" are going to count against the cap.

    If a player is happy with the money he gets from an endorsment, and then takes less from the team he wants to play for, more power to him.. but that rairly happens...
     
  11. kdb209

    kdb209 Registered User

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    Just give Bettman the same power to sanction that David Stern has. Look at the T-Wolves and the whole Joe Simth fiasco - a $3.5M fine and 5 first rounders.
     
  12. Mess

    Mess Global Moderator

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    I agree and no cap violation has occurred .. unless the NHL says endorsements count toward the Cap or are disallowed (which would never hold up in court) as a player is allowed to make money outside of hockey ..
     
  13. triggrman

    triggrman Registered User

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    The bigger markets will always have a slight advantage with some things (endorsements) and smaller markets will have some advantages (cost of living).

    I'd bet that 3M in Nashville is more like 5M in New York.
     
  14. sakicisstupid

    sakicisstupid Registered User

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    Correction: the bigger markets will have huge advantages despite there being a cap.

    It's interesting to see that the large revenue teams will be making around 30-40 M in profit per year (assuming ticket prices aren't significantly reduced which I doubt will happen in the larger markets). They've got all that money to burn which gives them more incentive to circumvent the cap. I can also imagine that these type of profits might create some tension with the lower revenue teams since they won't be making nearly as much profit.

    I'm also intrigued that Paul Maurice may have been hired by the Leafs to be coach of their farm club? How the heck can they hire a successful coach like that to work in the minors? I know why...30-40 M profit means more money for scouting, development, farm team and management. These things are indirectly related to success. No longer will a team like Colorado have to get cheap with its minor league team.

    TM: anymore ways you can think of that'll allow teams to exploit CBA loop holes? I'm certainly curious to know.
     
    Last edited: Jun 24, 2005
  15. Drury_Sakic

    Drury_Sakic Registered User

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    In no way is this a loophole in the cap.. its just a market factor... name a case where a player has taken less money because he got more endorsment money from a company...???


    Playing in big markets always will have more appeal to some players... but playing in a small market also appeals to some guys...and arn't they the best ones?

    plus, the point is valid... it costs a heck of alot more to live in NY or LA than in St. Paul or Columbus....so less money in a smaller market will count for something...

    Another thing to note will be taxes... NY taxes alot....... as do alot of hockeys other bigger markets(NY, LA, SJ, ANA are all in tax heavy blue states, St. Louis sports guys get taxed alot, ext).....

    Again.. they are not loopholes in any way.. just the state of natural law and economic markets..
     
  16. quat

    quat winsome, loathsome

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    How does the team get the sponsorship from Nike for a player without the players approval? Wouldn't the player just go directly to the sponsor and get all the money and the proper market for his playing ability from the league? Hmmm. This senario simply wouldn't happen, and I believe someone else here agrees:

    The only example you give of the million different ways around a capped league, is one you negate in the next post.... what player is going to let the team act on his behalf looking for sponsorship deals, so he can take less money than he could easily and leagally get on his own?

    I'm pretty sure the league will do everything in it's power to make sure there are no ways to circumvent the cap.
     
  17. sakicisstupid

    sakicisstupid Registered User

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    Realistically, the sponsorship deal would be added incentive for the player who is being courted by a team that's offering a salary comparable to what others are willing to give. In this instance, however, a sponsorship deal could also be negated if the player is already being subsidized by a competitor. Yet, sponsors that generally support teams (rather than players) likely wouldn't be a competitor and
    may not be opposed to help a team court a star player (especially if the sponsor(s) is/are are locally based). It's a plausible scenario I would think.
     
  18. me2

    me2 Calling out the crap

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    Bigger hockey-fan markets, particularly TO & Montreal, are going to have a natural drawing power based on the potential of sponsorships. It would not surprise me in the least if the NHL looks into this in the CBA. Teams will want to be as hands off as possible when dealing with outside sponsorship of players, as the NHL might not take too kindly to dubious sponsorships deals. Other sports deal with it in a similar manner where team sponsors are not permitted (or closely monitored) in sponsoring players, non-affiliated sponsors are fine.
     
  19. GSC2k2*

    GSC2k2* Guest

    The PA would be quite unhappy with that little sponsorship arrangement. Their interest is not in maximizing compensation of an individual player, but rather in maximizing salaries across the board. That is only achievable through maximizing REPORTED compensation for the players, so that the salaries have a ripple effect across the market. That kind of arrangement promotes "hidden" salary. Every million in hidden salary is a million less for use in comparables during arbitration and in the negotiations of other players.
     
  20. Mr Sakich

    Mr Sakich Registered User

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    I keep hearing about these big market sponshorship dollars. I must be living in a cage because I can't remember the last Jaromir Jagr Wheaties commercial. Messier gets the frito's gig but that was a result of his glory days in edmonton. He is pretty much the only recognizable face of hockey in the USA.

    IMO, a smaller market like columbus or edmonton may present bigger sponsorship potential because of the big fish in a small pond scenario. New York has 10?? major league teams and all have a higher profile than the rags.

    IMO, a more important economic factor is local tax rates. Montreal and vancouver are in trouble because a 5 mill per year contract is worth 3 mill after taxes whereas in Texas, Florida, or alberta, that same 5 mill is 4 mill after taxes.
     
  21. hbk

    hbk Registered User Sponsor

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    personally, if my hockey teamed owned the network the games were being played on or the radio station I could hire a player to host a weekly 5 minute interview segment/commentary at a substantial amount. Or pay a $ bonus for every interview. something to that effect.

    If I also owned say a luxery automobile franchise I would toss in a couple of cars for the family as a non-cash bonus. (this one will likely be addressed in the CBA)

    payments for autographs, personal appearance fees for community events, hire family to work for the organization as paper clip sorters, etc.

    that's just off the top of my head.
    ,
     
  22. joepeps

    joepeps Registered User

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    you can't hire the family as paper clip sorters...






    it has to be stapler refillers :biglaugh:
     
  23. Do you think before you post? Obviously not. The NHL doesn't have to prevent anything as the NHLPA will do it for them. The NHL and the NHLPA have agreed to a cap number based on revenues. REVENUES include sponsorship money and are included in yearly audits. You remember those audits there Mr. Big Shot Accounting Manager? Audits are pretty thorough and tend to catch crap like that. Now which do you think the NHLPA will want to see? NHL clubs hiding money (which has been proven to be a 100% fabricated lie by Goodenow BTW) to pay players under the table, bumping the salaries of a select few, or catching ALL revenues and making sure the cap number rises to the benefit of ALL players? Now back to your little fantasy world where sponsors are looking to drag their good name through the mud so teams can sign a player or two. What a joke.

    :shakehead
     
  24. habfan4

    habfan4 Registered User

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    Local tax rates aren't a factor at all. When you pull in $5 US million a year, you don't simply fill in a T1 and hand it over to Revenue Canada, a team of accountants and tax lawyers make sure you pay as little tax as possible.
     
  25. WVP

    WVP Registered User

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    As if rumors of a team doing this wouldn't surface immediately...
     
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