Hard cap question

Discussion in 'The Business of Hockey' started by Brent Burns Beard, Dec 8, 2004.

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  1. Brent Burns Beard

    Brent Burns Beard DontTouchMyDonskoi!

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    Ok .. lets say the league gets a hard cap of 31m. I dont see how this reduces losses for the real needy teams.

    The NYR will go from an 80m payroll to a 30m payroll. So they lose 50m less. But how does this help CRL (for instance) not lose money ? It hasnt done anything for CRL really.

    It just makes the big teams richer and better. I mean can NYR be worse ?

    DR
     
  2. Buffaloed

    Buffaloed webmaster

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  3. FLYLine27*

    FLYLine27* BUCH

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    UMMM THE RANGERS Salary is 44 MILLION..NOT 80 :rolleyes:
     
  4. thinkwild

    thinkwild Veni Vidi Toga

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    Sharing playoff revenues would take the reward away from successful organizations that develop a playoff team. But it would take away the financial advantage playoff success bestows so that next year every team is equal again. The winning team, with the sought after players that have proven they can get there, will be raided for gathering too much proven quality they become an albatross to the league.

    The playoff revenue is the true revenue disparity generator. Accomodate it or equalize it I guess.
     
  5. Tom_Benjamin

    Tom_Benjamin Registered User

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    What a liar Daly is.

    "First, I think it's important to point out that we already employ a revenue-sharing philosophy that is comparable to that which is employed in the other three major professional sports leagues."

    Ha-ha. It is a philosophy that results in a pool of about $200 million from TV and a pittance from merchandising. It adds up to 9% of revenues being pooled which is miles behind the other sports. Football pools 70% of revenues.

    Revenue sharing will go down significantly with the new TV deal. The league has to put up the playoff pool just to offset the revenue sharing losses from the loss of TV revenues. They won't. The NHL won't do anything to share significant revenues. They never have and never will. They've been promising for years and years.

    The same philosophy, my ass.

    Tom
     
  6. Buffaloed

    Buffaloed webmaster

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    I don't think they'd share playoff revenues equally. There's a lot of ways to do it so teams that make the playoffs would still be rewarded. One way would be to share half of playoff revenues. Teams that make the playoffs would keep 50% of their revenues with the other 50% going into a pool to be split evenly among all 30 teams. They can work the numbers however they want. The NFL does it 60:40 with attendance revenues. The home team keeps 60% and the rest goes into a pool to be shared.
     
  7. Bruwinz37

    Bruwinz37 Registered User

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    It would also allow them to be more competitive in the FA market as salaries overall would come down. This will allow for better teams (esp if the FA age goes to 29) and will give the team more star power and more fans in attendance.
     
  8. Brent Burns Beard

    Brent Burns Beard DontTouchMyDonskoi!

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    lol .... good strategy. its a proven winner.

    say, how did Kariya do in COL, isnt this what you want (cheap(er) stars) ? Kariya signed for 1.2m and did what ? Think of all the high profile FA and then think about how well the really didnt do.

    what i am hearing you say is you would rather build the way NYR does and not the way OTT does.

    is this what the lockout is really about ?

    dr
     
  9. I don't think the NY Rangers will enjoy there revenues if a revenue sharing pool is put in place. Them making more money will help poor teams like ours here in Calgary make a profit.
     
  10. Buffaloed

    Buffaloed webmaster

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    The playoff pool is the key to getting a CBA done. That's the NHL's version of the NFL TV contract. I'd venture to guess that it constitutes half of NHL revenues and it's not shared in any way. Suppose the net playoff revenues were split up 3 ways; to teams that make the playoffs, to the players on those teams, and to a pool split equally by the remaining teams.

    Teams that made the playoffs would still get a bonus. Good management would be rewarded.

    Players could realize significant bonuses that would fall outside any cap. That could make a cap acceptable.

    Non-playoff teams would be assured of some degree of revenue certainty, and with a cap, they'd be able to compete more effectively for the playoffs to get a bigger share of the pie.

    The top players would naturally gravitate towards the best teams. With a cap some would accept lower salaries and hedge their bets on getting a big playoff bonus. It's deflationary, and it's also an incentive for good teams to stay intact.
     
  11. vanlady

    vanlady Registered User

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    According to Brian Burke the league only intends to share 10% of all revenues. One of the biggest stumbling blocks between the union and the NHL is the fact that the league wants a cap with no meaningful revenue sharing. This was backed up by Brian Burke on OTR on Monday.
     
  12. Jaded-Fan

    Jaded-Fan Registered User

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    The idea behind caps in every sports is growing a bigger pie. The theory is that with each team feeling that it has a legit shot equal to any other year in year out rather than feeling that your team might catch lightening in a bottle akin to winning the lottery one year every fifty, that the interest in the sport overall grows as it has in football and basketball. Offseason means something to every team as they have as much of a shot in Edmonton to pick up a prime FA as they do in the NY's, Montreal's and LA's of the world. Bigger pie instead of fighting over pieces of a much smaller one, everyone ends up winning.
     
  13. thinkwild

    thinkwild Veni Vidi Toga

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    Thats so sweet.

    Because that is always a winning strategy. If only Washington and Pittsburgh could buy some UFAs. Maybe thats what fans really want. The big name players moving around each year. And they will love replacement players until a proper system that allows them to sign the big stars is in place.
     
  14. Hockey_Nut99

    Hockey_Nut99 Guest

    A cap in my eyes levels the playing field and really shows which teams can run their own team the best. If a manager wants to sign one or two guys to huge contracts then go ahead. Now he doesn't have a lot of money left over for the rest of his players. Does he want one or to really good lines and 2 really really bad ones? To me a cap will spread out superstars among more teams rather than a few rich teams taking them from all the other teams and stacking themselves up..

    A rich team can fix their mistakes buy buying people. Small teams cant.
     
  15. Tom_Benjamin

    Tom_Benjamin Registered User

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    It is half the NHL profits but nowhere near half the revenues. According to Arthur Levitt, total playoff revenues are $145 million. That's about what the old US TV contract was worth. In other words, if you make all the playoff revenues league revenues, all teams will replace what they are losing from ABC.

    Really successful teams (and the Rangers) will top $100 million in revenues. Mediocre teams will be close to the league average of $70 million. Bottom feeders anmd the rink challenged struggle to make $50 million.

    That's a huge gap. How do you deal with that? The owner's solution is to tag a cap to the $50 million team. Not surprisingly, the players think that is a pretty stupid solution. Taking playoff revenues away from successful teams strikes me as a pretty silly idea too. The way things stand, Ottawa or Buffalo can turn New York revenues if they win a Stanley Cup. They can become a $100 million team.

    I think the NHL found the best solution which is to ignore the revenue problem. Address the real concern which is competitive balance. Set up a system that restricts free agency. Limit what teams can buy with the revenue advantage.

    If the owners really want a salary cap or an NFL system, they have to talk about revenue sharing at the 50% level. Let's talk a salary cap when the owners table their billion dollar revenue sharing plan. None of this nickle and dime $145 million playoff junk.

    Tom
     
  16. Pepper

    Pepper Registered User

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    This has been explained to you in several threads already but I'll do it again.

    When big teams can't pay huge salaries anymore, it will drop the salaries of ALL players because demand is not as high as supply anymore. Players in Carolina were able to say "look, player X is making Y dollars per year in Rangers, I want something like that" so Canes had to either raise his salary or trade him away.

    Under hardcap Canes can tell the player "look, there's a player X like you who's making Y dollars per year, it doesn't make us sense to pay you this much" so they can force the player to take smaller contract.
     
  17. tantalum

    tantalum Registered User

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    I'll add to it in a different and probably longwinded way. Under a hard cap system of say around $40 mil a team, money is guaranteed to be taken out of the salary system from where it stands today. Less money to go around for the same number of players. As a consequence salaries will come down and large stupid contracts will hurt a team much more (if the contracts remain semi-guaranteed or if there are buyout provisions such that a team can only buy out a certain amount). I agree with the players association in one thing...it will hurt the 3rd/4th line guys more because superstars will always be in high demand. But for the most part it's the 1-2 mil contracts for these guys that have become common place that is hurting the league. To be sure the big name salaries will drop as well I think but they will still be making big money. Guys like Tie Domi wouldn't be making $2 mil a year. To bring it further, with the basement pulled out of the salary structure the other salary levels should also fall. If Tie Domi is worth $2 mil than it makes 70+% of the forwards his age worth the same, which is ridiculous.

    Under a pure luxury tax system a team has the same budget as they do now. The only difference is that they may not be able to spend all of it on salary as they have to account for tax to be paid. For example perhaps the wings can only pay $65 mil in contracts with the other $12 mil paid as tax on the $77 mil budget. However the 12 mil just goes to salaries on other teams so the total money in the salary pool remains what it is today (too high) and there can be no guarantee this will result in dropping salaries. Given the same money in the salary system salaries will not drop. What a luxury tax does do is make the financial imbalance between teams a bit closer. There isn't a $40 mil spread in payrolls but $25-30 mil instead. Because the same money exists in the salary pool that existed before it isn't a player concession but purely an owner one...a huge owner one. The pay cut back the players are proposing is what would immediately scale back player salaries, but I don't think it's enough. The "savings" of such a system is compeltely unpredictable. It may work and I'll grant that but the league doesn't need something that may work. It needs something that will work. And to do that properly the player expenses should be tied to revenues somehow...be it hard cap or a combination of luxury tax/inflated hard cap.

    Funny how Healy is all confused and maintains that you can't determine revenues accurately yet has a nice flow chart of the Wirtz empire outlining all the companies...companies that file financial statements. Yep really tough. So tough other leagues have managed to figure it out. So tough that those are all the things reported in the URO's and determined to be accurate. But as Burke pointed out Saskin admitted the point is that they NHLPA just doesn't want to do it not that it can't be done.
     
  18. txpd

    txpd Registered User

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    I think if you look at the basic math you will see that the small market team gets a lot from a hard salary cap. lets look at the $28m payroll Nashville Preditors.
    In the time that Nashville has been in the NHL the big spender teams of the western conference, Detroit, Dallas, Colorado, St. Louis have missed the playoffs a combined total of one time. Reducing those teams payrolls from at least double what Nashville can afford to spend to something close to parity will allow the Preds to compete for all 8 Western Conference playoff births rather than the 4 they have been reduced to every year they have been in the league to this point.

    At the same time that Nashville's competitive prospects improve so does the team's opportunity to acquire brand name players. The salary cap cut the number of brand name value players that fit under the Colorado salary cap from 3 to 4 in a given season to 1 or 2. That reduction in the ability of the combined big money teams to hire expensive players will both drive down the price and open up aquisition opportunities for the rest of the teams in the league.

    for Nashville, being able to acquire a couple of star quality players with developed name brand value over a couple of years will not only allow Nashville to solidify themselves as a playoff level team, but they will give the team faces and names a team needs for an identity in its market place. something that the Preds have never had.

    the bottom line in Nashville is that the Tennessee Titans are supported far far better than they ever were in the much larger market, Houston and are a very strong franchise now. They have been a competitive team their entire time in Nashville and have been able to grow roots faster. The Preds will follow suit with a steady playoff level team over the next few years. A salary cap will allow the preds to compete more honestly for those playoff spots and at the same time all the team not only the chance to sign players that can sell tickets, but also help them be able to afford to acquire more.
     
  19. Benji Frank

    Benji Frank Registered User

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    I think if they're going to have revenue sharing & a hard cap in the current NHL, it should be by way of a % of the gate (and possibly local TV & radio revenues) being given back to the visiting team. And, the home team should be able to adjust ticket prices starting say 45 days before game day. Just like airfares, etc. if a certain date is selling out, they raise the prices on the remaining seats. If it's not selling well, they can do their promo nights like alot of teams do now to fill up the arenas. This way, for one, fans will be encouraged to buy their tickets early. And also, if a team like Florida starts surprising people with a couple of hotshot rookies everyone wants to see, the ticket prices can reflect that. Granted a team like montreal or toronto (I'm just thinking back to the old Jets days ... I haven't followed how they're received in the States!!) will always be a big draw on the road, but small market teams will also reap the benefits of playing in the ACC or Montreals Molson Centre (Is it still called that??) which will likely amount to far more then what Toronto would get for playing in Pittsburg, etc. This way too, the owners won't be so willing to accept an expansion franchise in a city where they don't think hockey will work like they've allegedly done in the past.........
     
  20. Bruwinz37

    Bruwinz37 Registered User

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    Do you just respond to what is convenient for you or are you not smart enough to respond to the whole post? I said that it would allow for teams to be more competitive in the FA market which would allow for: more competitive teams (especially if THE FA AGE GOES TO 29) and would allow smaller market teams to have more star power. Like it or not FA signings will generate fan interest and create excitement in most markets.

    This is not to say I think teams should build teams through FA, it is just that the FAs will be more spread out. Logic holds that if you are only able to sign a couple FAs you have to be developing other talent throughout your system. I thought that was basic logic, but I forgot you only post according to your agenda.
     
  21. Brent Burns Beard

    Brent Burns Beard DontTouchMyDonskoi!

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    if this is the case, it should be pretty easy for you to give me some real examples of players on CRL who succesfully used this tactic.

    so which CRL players were compared to which NYR players ?

    or is this just another "im just saying", but have no real back up.

    dr
     
  22. vanlady

    vanlady Registered User

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  23. Gary Bettman and Bill Daly have both said Revenue Sharing is going to be a major part of this deal. Lets not kid ourselves here, if anything the ideal system would be a hard cap, but since the players want to think there the best atheletes in the world and desrve to be paid like they are saving someones life, there will not be hockey for a long long time.

    Brain Burkes proposal was a good one, the NHLPA and NHL should take a good hard look at it.
     
  24. tantalum

    tantalum Registered User

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    Funny because the NHL has already conceeded it needs more revenue sharing. Is it going to be to the extent the players want? Of course not.
     
  25. vanlady

    vanlady Registered User

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    OK so how is a cap going to work? Remember the NFL had meaningful revenue sharing since 1965, long before there cap. The NBA has better revenue sharing. The NHL owners don't want revenue sharing above 10%, which is a joke. Without revenue sharing a cap won't work.
     
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