nyr7andcounting said:
You answered your own question. If the initial range is based on $2B, than the cap will go down after year 1 and might never get back to $36-$38M. If the reported range is on projected revenues of $1.7B, as somebody here said, than it will most likely go up over the next 6 years. Odds are it's based off of a projection, like 1.7B, but we don't know for sure.
I think you are still missing the point.
With linkage, it does not really matter what the projection is. The share of revenues to go to the players is 54%. To the extent that there is a variation from that level, that is addressed either by the escrow account (in the event of a shortfall) or by the owners making a supplemental payment (if there is an overage).
The only purpose of the projection is to set the INITIAL CAP at a certain level. This controls the first cap level, and it is important to set it correctly so that the escrow account can handle it. Since there are no actual useful numbers, projections need to be used. For example, it would be a very complicating set of circumstances if there was too much of a shortfall for the escrow account to satisfy. I am certain it has been a contentious issue to negotiate, since the owners need the escrow account to be able to handle shortfalls, and the PA leadership wants it to be high enough to be able to sell to the players and MAYBE keep their job. In the end, though, the amount paid to the players is still 54%.
The expected cap in subsequent years goes up depending on what revenue is for a given year, but is always eventually subject to what revenues ACTUALLY ARE.
To go through an example in a standard cap system:
2005/06: assume initial revenues are going to be $1.8 billion.
Linkage # is $1.8 B x .54 = $972 million.
Average Cap per team is $972 M divided by 30 = $32.4 million.
(adjust to give the spread as designated by the CBA, using the agreed mechanism - i.e., 51% to 57%)
2005/06 ACTUAL REVENUES = $2 Billion
Linkage # is $1.08 B
Supplemental Payment to players = $108 million
2006/07: assume actual revenues will be $2.1 billion (last years revenue plus 5% for anticipated growth) (NOTE: anticipated growth probably another hotly negotiated item)
Linkage # is $2.1 B x .54 = $1.134 B
Average Cap per team is $1.134 B divided by 30 = $37.8 million
(adjust to give spread as above).
2006/07 ACTUAL REVENUES = $2 Billion
Linkage # is $1.08 B
Escrow account drawn on by NHL for $54 million.
Of course, the above is affected if in either year the league did not spend up to the 54% linkage figure.
Now, that being said, it should be apparent that in the standard cap system, the salary floor is in fact a complete red herring. If the cap is set at a number fairly close to 54%, and teams spend far below that number, the NHL is going to have to top up the salaries to get the league to an overall 54% number. It is for this reason that I have never understood the PA supporters' view that a floor was important.