Large Market teams vs Small Market Teams

Discussion in 'The Business of Hockey' started by Charge_Seven, Dec 9, 2004.

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  1. Charge_Seven

    Charge_Seven Registered User

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    Many people have been arguing over whether or not a luxury tax can stop the large market teams, or if anything at all can actually stop them from having an advantage over the little guys.
     
  2. A hard cap will make is economically equal, the rest is up to drafting, coaching, managment if there team is competitve or not.
     
  3. thinkwild

    thinkwild Veni Vidi Toga

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    An advantage in what?

    Buying UFA's?
    Building and developing an elite team in its prime?
     
  4. Buffaloed

    Buffaloed webmaster

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    There's always going to be some advantage. I don't think that's a bad thing, but there needs to be some leveling of the playing field.

    It's impossible to anticipate and close every loophole.

    What kind of bonus structure will be incorporated into the cap? In the NFL owners with disposable income enjoy a distinct advantage when it comes to signing free agents. They can come up with the cash up front. That's preferable to agents whether the contract is guaranteed or not.

    Front offices aren't covered by a cap. Successful small market teams can expect to see their front offices raided. It happens now, but it'll be much more exaggerated when the large market teams are awash in cash with nothing to spend it on. Calgary fans worry about how much Jarome Iginla is going to cost. In a few years they won't be able to afford Darryl Sutter. Tortorella will be a hot commodity when his contract expires. If you can't spend $5 million on a player, spend it on a coach. It's funny how Pat Quinn is getting a pay cut, and Bobby Clarke is offering to take one with the NHL scaling back. The reality is, there's going to be extraordinary inflation of front office salaries with a cap.
     
  5. Jaded-Fan

    Jaded-Fan Registered User

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    Nor will a cap disallow spending lavish amounts on scouting. But as said above, at least it levels the playing field, and as a big time supporter of a hard cap directly tied to revenues, I can accept that.
     
  6. Charge_Seven

    Charge_Seven Registered User

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    Essentially every aspect possible. From filling seats, to signing UFA's, can a Cap really stop the filthy rich teams.
     
  7. thinkwild

    thinkwild Veni Vidi Toga

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    You got that from the post?
     
  8. Steve L*

    Steve L* Registered User

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    It wont help when it comes for UFAs because where do you think a player will go if he has a choice of going to Colorado, Philadelphia, Detroit and Carolina and they can get the same money from each team.

    Big market teams will still be able to attract better players, they just wont have to pay them more money than small market teams.
     
  9. Pepper

    Pepper Registered User

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    I voted no because teams will NEVER be fully equal.

    But salary caps will instantly make the teams MORE equal.
     
  10. txpd

    txpd Registered User

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    nobody wants to stop the rich teams. most i know just want the none rich teams to have a reasonable chance to compete. the fact is that the league can not grow when there are 20 without marquee players and little if any interest around the league.

    thats part of the equation. as it stands right now no one outside of local fans have any interest in watching two have not teams play. you don't see pheonix and nashville on espn. so, its a near disaster on a league wide basis when an odd year comes up and the stanley cup finals are tampa and calgary. if the league were more friendly toward these markets competing both tampa and calgary would have been far more developed as national interests. there is certainly not a lack of world class talent on those teams, just a complete lack of national awareness.
     
  11. txpd

    txpd Registered User

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    I think what you are missing is that the salary cap would greatly restrict the number of ufa signings and salary dump trades a big money team could make.

    look at detroit. with a hard salary cap, there is no way they can afford $10m per on Nik Lidstrom and hit the UFA market for $5.5m to sign Derian Hatcher. they would have had to choose between Cujo and Hasek. They would never have been able to carry both. They would not have been able to sign Ray Whitney in the off season, trade for a $5m Robert Lang, then resign Draper, Yzerman, Shanahan and Hull this off season. The Wings would have had to make choices and would not have been able to just load up like they did.

    Yes, Detroit might have an advantage over Atlanta if the two are bidding on the same player with the same money figures. but what the salary cap does is restrict a team like Detroit to one acquisition a year. after the other big money teams spend on their one or two players, there will still be elite players on the market. right now a team like Detroit can sign 3 or 4, the Colorado gets 3 and Toronto 5 and when they are done all thats left for middle of the payroll pack teams are players like Curtis Brown. That would change.
     
  12. Sp5618

    Sp5618 Registered User

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    While I understand your point about national exposure perhaps hurting ratings when Tampa and Calgary squared off, I do not think that is the primary problem. It simply comes down to total population size & density (e.g, market size). In New York, you have 15+ million people as a potential market that could tune in if their team makes the playoffs- even 5-10% of this market is greater than 100% of Tampa or Calgary. If national interest levels are similar in local markets, at <2%, would you rather have 2% of NY or Philly or 2% of Tampa? I know what small market fans want, and they love their teams just as much as the established market fans, but the numbers are not on their side.
     
  13. Sp5618

    Sp5618 Registered User

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    Just a couple of notes, but you probably do know Hull is gone. Both Shanny and Yzerman have taken significant cuts in pay. Cheli is waiting in the wings, but has an agreement for this season in principle. Datsyuk remains unsigned. So does Schneider. Even with this setup, we have the following:

    Cujo $8 mil
    Hatcher $5 mil
    Lang $5 mil
    Lidstrom $10 mil

    That's $28 mil right there for 4 guys.... I think Shanny is in the 3-5 mil range, not sure. Draper probably has a similar deal. Yzerman is less but haven't seen the details. Cheli was supposed to get a couple more....heck, I'd rather make sure I got Datsyuk 'happy' going forward because he is the future....it is going to be a mess in Detroit if anything resembling a cap comes out of this.
     
  14. Steve L*

    Steve L* Registered User

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    With a salary cap, noone could afford Lidstrom at that price. Also, it wasnt their choice to have both goalies.

    The Flyers are going to buy out LeClair, Amonte and Burke. That frees up a load of salary for FAs who may have to be dumped under a new CBA. The struggling teams dont have that luxury.

    My point is that it will level the field but hockey cities will always have the advantage over Anahaim, Carolina, Atlanta etc.
     
  15. Beukeboom Fan

    Beukeboom Fan Registered User

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    I think you are missing the point.

    The big market teams are more desirable to UFA's today because the players will likely be playing with much more talent. If Palffy can make $6M playing with Staal & Vrbata or make $6M playing with Sakic and Hejduk (just as an example), where do you think he'll sign? COL obviously. However, under a hard cap, COL wouldn't be able to offer Palffy anywhere near the same money because they have to pay Sakic, Blake, Foote, Hejduk, Tanguay, etc.
     
  16. Polydorus

    Polydorus Registered User

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    I think 100 % revenue sharing would do the best job of leveling the playing field. If the total income of the NHL was split evenly all the teams would start with the same income. Besides it would REALLY be interesting to see the owners arrive at what constitutes revenue. <G>
     
  17. Motown Beatdown

    Motown Beatdown Need a slump buster

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    I do think it will curb spending. Illitch lost around 16 million dollars last year with a 77 million dollar payroll. Using that same payroll and figuring out the luxury tax being proposed he would have to throw down an additional 49 MILLION dollars in luxury tax


    40-60 million = 15 million dollar cap hit. (using 75 cent tax)
    60-77 million = 34 million dollar cap hit. (using 200% "harsh" penalty)

    So thats 49 million dollars on top of a 16 million dollar lost. So for the calander year of 2003-2004 he would lose 65 million dollars. Do you honestly believe he would be willing to lose that much money? Heck the Wings already planned to trim payroll for this calander year because of the money they were losing before a luxury tax.
     
  18. Sp5618

    Sp5618 Registered User

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    Yeah, wouldn't that be a great way to turn their bible, the Levitt report, against them! Couldn't you just see the shell game that would follow as everyone scurried to put as many real revenue streams into other 'portfolios'. I love it! :bow:
     
  19. Sp5618

    Sp5618 Registered User

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    Has anyone mentioned grandfathering any of this? As you know, the Wings' have an already precarious position with 'current' commitments, so the losses from a lux tax imposed immediately, plus the losses from a half season of play.... :dunno:
     
  20. Jaded-Fan

    Jaded-Fan Registered User

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    The issues are myriad but not insurmountable. One that no one mentions, from an ownership persepctive is the loss of franchise value in the bigger markets if a cap and total revenue sharing takes place. If Detroit is worth to pick a number out of the air $150 million and Carolina is worth $30 million a totally sharing of revenues would wipe out a good portion of $120 million in value of the Detroit franchise overnight. One fair solution is to guarentee the players 'x' percent of the pot, and then the owners keep the remainder garnering their shares based on percentages based on revenue generation.
     
  21. txpd

    txpd Registered User

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    thats not true at all. there is a component of available hockey revenue per capita as well. for instance. Denver and Tampa-St Petersburg are roughly the same size population wise. Calgary is a hockey market that performs as well as Washington, market #7 USA. Washington is far larger than Denver.
     
  22. txpd

    txpd Registered User

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    Whether or not anyone could afford Lidstrom at $10m is irrelevant really. the point is that hatcher would not have been signed in addition. you are also correct that the wings didnt want hasek and cujo, but would never have had the both at the same time. they would have bought out Cujo or they would have passed on Hasek's option.
     
  23. Charge_Seven

    Charge_Seven Registered User

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    Does anyone know exactly how buyouts work against the cap?
     
  24. Motown Beatdown

    Motown Beatdown Need a slump buster

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    That along with GregStack question about buying out contracts will be negotiated as part of the new CBA.
     
  25. Steve L*

    Steve L* Registered User

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    How would we without a CBA? ;)
    Id imagine the cap must have a grandfathering period to allow teams to adjust.
     
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