Higher revenue sharing for a higher cap?

Discussion in 'The Business of Hockey' started by RangerBoy, Jul 4, 2005.

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  1. RangerBoy

    RangerBoy TRUST THE PROCESS

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    Did the big market teams agree to share more of their revenue in exchange for a higher cap?Did anyone read the Hockey News with the hockey wives on the cover?On page 22,Mark Brender wrote the NHL has moved upwards on revenue sharing which angered the big market clubs which hate the idea of sharing their local revenue with the smaller market teams.In exchange,the salary cap could wind up being higher that previous reports which would not include the additional $4-5 million in benefits,signing and performance bonuses,minor league payroll and other costs.Brender wrote the cap could be as high as $40 million with a 100% luxury tax starting at $30 million

    Yesterday Bruce Garrioch wrote the cap could be in the $39 million range which will include player salaries,signing and performance bonuses.The $2.2 million for the insurance and pension plan would not be included in the $39 million

    A hard cap set at 54% of league revenues -- projected to drop by $300 million to $1.8 billion (all terms US) next season -- that will include all player salaries, signing bonuses and performance bonuses. The $2.2 million teams allot for insurance and pension plan contributions won't be included in that figure. The cap could be in the $39 million range, with a floor of about $24 million. There's talk of a dollar-for-dollar luxury tax starting around the $30 million mark, with that money redistributed to lower revenue teams.

    http://ottsun.canoe.ca/Sports/Hockey/2005/07/03/pf-1115008.html

    Larry Brooks wrote two weeks ago the cap will be $39.5 million

    When the initial reports about the cap were leaked,they were in the $34-36 million with the $2.2 million in benefits included.If it's $39 million without the $2.2 million,then its $3.5 million less than the $42.5 million w/o the $2.2 million offered by the NHL in February

    The NHLPA always wanted more revenue sharing as any basis of making a deal.That wasn't part of the February deal.It appears more revenue sharing is part of this deal

    Arbitration and qualifying offers will be based on the NHLPA's December 9 proposal

    This deal includes upward linkage which wasn't part of the February deal.The February deal did not have a salary floor

    One time buyouts not counting against the cap was not part of the February deal

    Maybe the NHLPA received/will receive a better deal in July than in February
     
  2. tantalum

    tantalum Registered User

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    Perhaps my math is fuzzy but I'm pretty sure 54% of $1.8 bil revenues hard cap is no where near $39 mil but rather $32.5 mil. Tack on the $2.2 mil a team for insurance and you are still well short of $39 mil.

    Seems like another story with half truths and contradictions.
     
  3. Jaded-Fan

    Jaded-Fan Registered User

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    Even if true, wouldn't it be only for one year? Afterall, next year and those after it adjust to 54% right?
     
  4. GSC2k2*

    GSC2k2* Guest

    Adjustments would be retroactive and based on actual revenues. That is what the escrow account would be for.
     
    Last edited by moderator : Jul 4, 2005
  5. Boltsfan2029

    Boltsfan2029 Registered User

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    LOL, spellcheck, gs, spellcheck!!! :biglaugh:
     
  6. nyr7andcounting

    nyr7andcounting Registered User

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    Yea this is what I don't get. People say the hard cap is at 54% of $1.8B, but than they also say the cap is $39M for this year.

    So either the cap isn't 54%, or they bumped the cap up $7M for the big market teams for one year only? I have a hard time believe they would do that...plus the big market teams are still sharing money in the next 5 years of the deal anyway, so why only do it for one year. Doesn't make much sense to me.
     
  7. GSC2k2*

    GSC2k2* Guest

    Ack!!!!!!!!! :eek:

    Where the heck is spellcheck anyway?
     
  8. GSC2k2*

    GSC2k2* Guest

    You forgot the third option: that Garrioch is pulling numbers out of his rear, and has the math skills of, oh, a media member.

    BTW, at 54% the cap would not be $39 million until revenues are $2.166 billion.

    EVen assuming there will be a cap range of 51% to 57%, revenues will have to be $2.052 billion before the max cap was $39 million.

    Even in the most wildly optimistic scenarios, I don't see how that would be projected.
     
  9. nyr7andcounting

    nyr7andcounting Registered User

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    Yea it doesn't make much sense.

    Maybe the range is 51%-57%...which would make sense as the $24/26M-$34/36M range. BUT, they really are letting "big market" teams spend a few extra million, to like $39M?
     
  10. GSC2k2*

    GSC2k2* Guest

    Perhaps. One never knows. I would be hard pressed to imagine a scenario where the NHL thought that would be a good thing, since the main point has been to keep the big marketers from raising the salary tide for everyone too much. I dunno, though. If the PA gave a big enough carrot, maybe that is in the offing. It only benefits a few teams and hurts the others, so it would have to be a big carrot if I am Bill Daly.
     
  11. RangerBoy

    RangerBoy TRUST THE PROCESS

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    $39 million plus the extra $9 million in taxes=$48 million
     
  12. RangerBoy

    RangerBoy TRUST THE PROCESS

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    There will be an escrow account.15-20% of the player salaries
     
  13. GSC2k2*

    GSC2k2* Guest

    ????

    Sorry, no offense but your reply seems to be a bit of a nonsequiter. Did you post in the right thread?
     
  14. nyr7andcounting

    nyr7andcounting Registered User

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    But, if I am Bill Daly, I also have to get all of my owners on the same page. Maybe the PA wouldn't take a deal without a lot of revenue sharing, but the big market owners wouldn't share a lot of revenues without a slightly higher cap for themselves. That would seem like the most likely scenario I think, either that or everyone reporting $39M is completely wrong.
     
  15. tantalum

    tantalum Registered User

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    Well everyone who is reporting it is also reporting 54 % which doesn't jive with $39 mil. The $39 mil number is 65 % of $1.8 bil which seems way too high. My guess is that the $39 mil may be related to the ~ $2.1 bil revenues of the last played season and may simply serve as a jumping off point for the intial year instead of trying to predict revenues for the upcoming season. Who knows until we see the entire thing all we are going to get are these half-stories.
     
  16. 666

    666 Registered User

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    I believe the 54% hard cap is an overall hard cap based on league wide revenues, so the players get 970M on 1.8B revenues. That averages out to about 32M per team but since there will be some teams near the floor then there will be some teams that can spend up to $39M.
     
    Last edited: Jul 4, 2005
  17. regehr

    regehr Registered User

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    i think you have it correct. no team can spend more than $39m (or whatever it ends up being) and no team can spend less than $22m (or whatever it ends up being). however, the total league-wide compensation to players cannot be more than 54% of league revenues (if revs are $2b then players get $1080m, if revs are $1.8b, then players get $972m, etc). in order to ensure the 54% overall rule, a certain portion of each player's salary (15-20%) will need to held back (in escrow) until the season's end. if the total of all player compensation is < 54%, the players get the entire escrow back. if total player compensation is > 54%, they will get a portion of it back. this is the 'cap on cap' that the NHLPA was so determined not to have. one thing not discussed: if total player compensation is < 54%, does the league pay them more in order for the players to = 54%. this is what was talked about previously, but i have not heard reports whether this is still the case.
     
  18. GSC2k2*

    GSC2k2* Guest

    If i am Bill Daly, I am more concerned with getting the largest consensus. I don't really care about the 5 or 6 big money clubs. I will be satisfied with the 25 clubs who will be helped the lower the cap. My feeling would be that there is probably no satisfying the Leafs of the league. What the big market owners would and wounld not accept is fairly immaterial; if revenue sharing is whatever it has to be, I would care less what the big markets think.
     
  19. MojoJojo

    MojoJojo Registered User

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    Because maybe not every team will spend to the cap? The average payroll would be 32.5, the maxumum would be 39.
     
  20. nyr7andcounting

    nyr7andcounting Registered User

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    They are outnumbered, but they are still a part of the league.
     
  21. Icey

    Icey Registered User

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    If your Bill Daly you better be concerned about the 5 or 6 money clubs, because those are the teams that make most of the revenue for this league. Salary Cap or no cap, without those teams and their revenue this league does not exist.
     
  22. Exisled

    Exisled Registered User

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    Has no one considered the possibility that all of those hours spent pouring over the books might possibly have resulted in a "re-definition" of what does, (and does not), constitute "Hockey Related Revenue"?

    And perhaps the widely reported $39M, (sans "other benefits"), does actually represent 54% of what the NEW definition includes?

    Just food for thought....
     
  23. GSC2k2*

    GSC2k2* Guest

    Well, 5 or 6 clubs didn't bring in $1 billion of the $2 billion in revenues in the last played season, so "most of the revenue"? I don't think so. Plus, last time I checked no NHL teams play against themselves.

    I reiterate: if this had anything to do with what those top revenue clubs wanted, it would never have happened. Those clubs are getting fed some humble pie Spungo-style, IMO ... ;)
     
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