Small market team happy with CBA....

[SPARTAKUS*]

Yikes. Your reasoning is ridiculous. I can't believe someone could actually think the way you do. You act as if the NFL system is something to be admired.

BTW, thinkwild is a Senators fan. Anyone with an ounce of understanding would support the old CBA compared to the new one, at least from a fan's point of view.

If you want to argue from a business point of view, it probably is better for the owner's pockets for this new CBA (what a shock, thats why they are pushing for it, nothing to do with fans, just in case anyone STILL doesn't understand that).

But what is great for the owners usually means a trade off to the worse for the fans. Higher ticket prices in playoffs because of higher demand (remember, sparkies: ticket prices aren't related to salaries), pay per view TV for games televised, subsidies from governments etc... all good for the owner and in turn costs the fan more, either indirectly or directly. Of course if you measure these on the basis of 'if Bobby Billionaire NHL owner doesn't get what he wants we will lose our team' then I guess you could argue these things are good for the fan as well. Although the conclusion drawn, generally, will be ambiguous because it is unclear how credible these threats from the owners are, anyway.

What the hell are you talking about I am a huge sens fan and I think this cba is awsome for all the NHL fans. It ensure that the Senators will stay in Ottawa for a long long time. The old cba was the worst ever. We almost lost our sens because of that cba. You can always stop following the NHL all together if you're so unhappy

 

[SENSible1*]

But uncle Bob told me that a cap does not act like a magnet!

Oh, I'm so confused now.

The best thing about the cap magnet theory is that the owners can all spend up to 39 M and still get their money over 54% back from escrow at the end of the season.

 

[kdb209]

The best thing about the cap magnet theory is that the owners can all spend up to 39 M and still get their money over 54% back from escrow at the end of the season.

Yup. If the league can get everyone to sign contracts to spend to the max, the 54% will roll every teams real payroll back to only $30.6M (based on estimated $1.7B league revnues). What happens if there isn't enough in the escrow escrow acounts (15% of player salaries) to make up the difference. Do the teams get to send bills to the players to return some money? That would be fun to see.

 

[Mess]

Yup. If the league can get everyone to sign contracts to spend to the max, the 54% will roll every teams real payroll back to only $30.6M (based on estimated $1.7B league revnues). What happens if there isn't enough in the escrow escrow acounts (15% of player salaries) to make up the difference. Do the teams get to send bills to the players to return some money? That would be fun to see.

That would be great for fans though ..

The NHL would ice a better on ice product to the fans by having all teams max out at the ceiling and then for doing it they would get a rebate of 15% at year end ..

It will be interesting to see how revenue sharing would tie into this concept ..

It would also be interesting if this is actually possible .. Big Market teams that are capped at $39 mil ceiling and bringing in $100 mil in revenue are only able to max and spend about 40% as a result of the cap .. So even if lots of other teams go over 54% there is built in protection by that in the system and the escrow 15% account .. That means any team that has total Hockey Revenue of around 72 mil would max out at 54% at the Cap ..

Here are the Forbes numbers based on last Hockey season that

2003-04 Totals
Team ....Total Revenue...Income...Player Costs

Toronto ......117 mil....14.1 mil...69 mil
Minnesota......71........11.5.......30
Chicago........71.........9.4.......34
Tampa Bay......88.........8.6.......41
Montreal.......90.........7.5.......51
Boston.........95.........2.3.......53
San Jose.......74.........1.3.......39
Vancouver......74........ 1.3.......45
Dallas........103........-0.3.......74
Colorado.......99........-1.1.......70
NY Rangers....118........-3.3.......78
Philadelphia..106........-4.1.......73
Los Angeles....80........-5.3.......56
Detroit....... 97.......-16.4.......80

These 14 teams could spend $39 mil and be below 54%

Others

Nashville......57.........6.2.......29
Edmonton.......55.........3.3.......37
Calgary........70.........2.3.......43
Columbus.......66.........0.9.......36
Atlanta........59.........0.9.......33
Pittsburgh.....52........-0.6.......32
Florida........60........-3.7.......32
Ottawa.........70........-5.0.......48
Phoenix........57........-7.8.......39
NY Islanders...64........-9.5.......47
Buffalo........51.......-10.5.......38
New Jersey.....61.......-13.9.......54
Washington.....61.......-14.7.......49
Carolina.......52.......-18.2.......41
Anaheim........54.......-22.4.......58
St. Louis......66.......-28.8.......68

These 16 about 1/2 the league would be under 54% in hockey Revenue .. Ottawa and Calgary are close just a few % below ..

Not sure there are enough teams in the bottom section to force the 15% repayment of the escrow .. The uncertain market and and recovery adds more uncertainy ..

I would that in order for that to happen would be that the 39 mil is too high or optomistic to make it happen ..

 

[Mess]

It will be interesting to see how revenue sharing would tie into this concept ..

It would also be interesting if this is actually possible .. Big Market teams that are capped at $39 mil ceiling and bringing in $100 mil in revenue are only able to max and spend about 40% as a result of the cap .. So even if lots of other teams go over 54% there is built in protection by that in the system and the escrow 15% account .. That means any team that has total Hockey Revenue of around 72 mil would max out at 54% at the Cap ..

These 16 about 1/2 the league would be under 54% in hockey Revenue .. Ottawa and Calgary are close just a few % below ..

Not sure there are enough teams in the bottom section to force the 15% repayment of the escrow .. The uncertain market and and recovery adds more uncertainy ..

I would think that in order for that to happen would be that the 39 mil is too high or optomistic to make it happen ..

So with 1/2 the league above 54% and 1/2 below 54% if all teams would spend to the ceiling of 39 mil ..

What is going to be the effect on the escrow account ??

If you took the top 5 teams and said they would be around $100 mil = (5 X 100 mil) = $500 total revenue & 5 bottom teams and say they have hockey revenue at $50 mil total .. then (5 X $50 mil) = $250 mil ..

So total hockey Revenue combined = $750 mil for the 10 teams combined.

If all 10 teams spent to the max of $39 mil ( 10 teams X $39 mil ) = $390 mil player costs

So ... $390 mil team spending / $750 mil total revenue = 52% total.

Now you are left with the 20 teams in the middle and you still are below the 54% mark at the moment and again 1/2 used to be above and 1/2 below that mark.

If you take out Calgary, Ottawa, Chicago, Minnesota, SJ and Vancouver which are at break even so play no factor or a wash if you prefer.

You are left with 14 teams only, still below the 54% ..

To me it looks like the escrow account will be adjusted very little in fact if all teams spent to the cap ceiling.

The small revenue markets that would be overspending their budgets to do it will not get very much in return and show a loss on the books as a result.

Then the escrow is divided by all 30 teams when either keeping or returning money to the players. So again small market would have to not only lose money in the process but return most if not all of the escrow account .. Only thing that could effect this is if the projected 1.7 bil that determined the 39 mil is way out of wack ..

Is this wrong ??

 

[GSC2k2*]

So with 1/2 the league above 54% and 1/2 below 54% if all teams would spend to the ceiling of 39 mil ..

What is going to be the effect on the escrow account ??

If you took the top 5 teams and said they would be around $100 mil = (5 X 100 mil) = $500 total revenue & 5 bottom teams and say they have hockey revenue at $50 mil total .. then (5 X $50 mil) = $250 mil ..

So total hockey Revenue combined = $750 mil for the 10 teams combined.

If all 10 teams spent to the max of $39 mil ( 10 teams X $39 mil ) = $390 mil player costs

So ... $390 mil team spending / $750 mil total revenue = 52% total.

Now you are left with the 20 teams in the middle and you still are below the 54% mark at the moment and again 1/2 used to be above and 1/2 below that mark.

If you take out Calgary, Ottawa, Chicago, Minnesota, SJ and Vancouver which are at break even so play no factor or a wash if you prefer.

You are left with 14 teams only, still below the 54% ..

To me it looks like the escrow account will be adjusted very little in fact if all teams spent to the cap ceiling.

The small revenue markets that would be overspending their budgets to do it will not get very much in return and show a loss on the books as a result.

Then the escrow is divided by all 30 teams when either keeping or returning money to the players. So again small market would have to not only lose money in the process but return most if not all of the escrow account .. Only thing that could effect this is if the projected 1.7 bil that determined the 39 mil is way out of wack ..

Is this wrong ??

Yup, it is.

It does not appear to take into account revenue sharing, which throws off all of your percentages.

 

[kdb209]

So with 1/2 the league above 54% and 1/2 below 54% if all teams would spend to the ceiling of 39 mil ..

What is going to be the effect on the escrow account ??

If you took the top 5 teams and said they would be around $100 mil = (5 X 100 mil) = $500 total revenue & 5 bottom teams and say they have hockey revenue at $50 mil total .. then (5 X $50 mil) = $250 mil ..

So total hockey Revenue combined = $750 mil for the 10 teams combined.

If all 10 teams spent to the max of $39 mil ( 10 teams X $39 mil ) = $390 mil player costs

So ... $390 mil team spending / $750 mil total revenue = 52% total.

Now you are left with the 20 teams in the middle and you still are below the 54% mark at the moment and again 1/2 used to be above and 1/2 below that mark.

If you take out Calgary, Ottawa, Chicago, Minnesota, SJ and Vancouver which are at break even so play no factor or a wash if you prefer.

You are left with 14 teams only, still below the 54% ..

To me it looks like the escrow account will be adjusted very little in fact if all teams spent to the cap ceiling.

The small revenue markets that would be overspending their budgets to do it will not get very much in return and show a loss on the books as a result.

Then the escrow is divided by all 30 teams when either keeping or returning money to the players. So again small market would have to not only lose money in the process but return most if not all of the escrow account .. Only thing that could effect this is if the projected 1.7 bil that determined the 39 mil is way out of wack ..

Is this wrong ??

You don't need to look at it on a team by team basis. If every team spent to the cap, player salaries would be $39M * 30 = $1.17B. This would be 69% of an estimated league revenues of $1.7B. 54% of $1.7B is $916M. So in this case, in order to not exceed the league wide cap, $254M would have to returned from the players to the owners.

Based on a revenue estimate of $1.7B, the average team salary cannot be more then $30.6M ($1.7B * 54% / 30 teams) before the escrow mechanism kicks in to return money to the owners. If every team signed $39M in contracts, after the escrow rebates, there real player costs would only be $30.6M per team.

What happens in the everybody-spend-to-the-cap scenerio, where the total that would need to be returned to the teams ($39M - $30.6M = $8.4M = 21.5% of player salaries, based on the $1.7B revenue estimate) is greater than the amount held in escrow (15% of player salaries) is uncertain. It would be funny to see the responses if the players each had to write a check back to their team.

 

[Mess]

You don't need to look at it on a team by team basis. If every team spent to the cap, player salaries would be $39M * 30 = $1.17B. This would be 69% of an estimated league revenues of $1.7B. 54% of $1.7B is $916M. So in this case, in order to not exceed the league wide cap, $254M would have to returned from the players to the owners.

Based on a revenue estimate of $1.7B, the average team salary cannot be more then $30.6M ($1.7B * 54% / 30 teams) before the escrow mechanism kicks in to return money to the owners. If every team signed $39M in contracts, after the escrow rebates, there real player costs would only be $30.6M per team.

What happens in the everybody-spend-to-the-cap scenerio, where the total that would need to be returned to the teams ($39M - $30.6M = $8.4M = 21.5% of player salaries, based on the $1.7B revenue estimate) is greater than the amount held in escrow (15% of player salaries) is uncertain. It would be funny to see the responses if the players each had to write a check back to their team.

The Million dollar question is will teams even be permitted to do this ..

In order to set the floor and Ceiling the NHL came up with a more complecated method then straight math ..

Taken from an earlier NHL proposal..

FLOATING TEAM PAYROLL "RANGE"

-- The parties agree that the applicable Payroll Range for each team in any given year should be representative of the League as a whole, and should not necessarily be engineered either toward the lower payroll teams as a group, or to the higher payroll teams as a group.

-- To effectuate this philosophy, the following Floating Team Payroll "Range" is being proposed.

-- For purposes of establishing the starting Team Payroll Range, each of the top five and bottom five Clubs (ranked in terms of Total Team Payroll for the 2003-04 season) will be entirely excluded from the analysis (Teams 1-5 and Teams 26-30).

-- The low-end of the Floating Team Payroll Range will be established by averaging the Total Team Payrolls (as adjusted to reflect the 24% Salary Rollback) of the ten (10) Clubs ranked immediately below the League mid-point (Teams 16-25). Using that calculation in Year 1, each Club will be obligated to spend no less than the Floor

-- The high-end of the Floating Team Payroll Range will be established by averaging the Total Team Payrolls (as adjusted to reflect the 24% Salary Rollback) of the ten (10) Clubs ranked immediately above the League mid-point (Teams 6-15). Using that calculation in Year 1, no Club will be permitted to spend more than ceiling

-- The mid-point of the Floating Team Payroll Range will be adjusted on an annual basis to reflect changes in League-wide revenue, with corresponding changes to both the low-end and the high-end of the Floating Team Payroll Range.

-- Enhanced and meaningful revenue sharing pursuant to which all 30 Clubs (assuming an appropriate level of business performance within their respective markets) would be provided the ability to afford a League-representative Team Payroll, which would be established at a point within the prescribed Floating Team Payroll Range.

Why implement this method rather then straight math ??

 

[kdb209]

Originally Posted by kdb209
You don't need to look at it on a team by team basis. If every team spent to the cap, player salaries would be $39M * 30 = $1.17B. This would be 69% of an estimated league revenues of $1.7B. 54% of $1.7B is $916M. So in this case, in order to not exceed the league wide cap, $254M would have to returned from the players to the owners.

Based on a revenue estimate of $1.7B, the average team salary cannot be more then $30.6M ($1.7B * 54% / 30 teams) before the escrow mechanism kicks in to return money to the owners. If every team signed $39M in contracts, after the escrow rebates, there real player costs would only be $30.6M per team.

What happens in the everybody-spend-to-the-cap scenerio, where the total that would need to be returned to the teams ($39M - $30.6M = $8.4M = 21.5% of player salaries, based on the $1.7B revenue estimate) is greater than the amount held in escrow (15% of player salaries) is uncertain. It would be funny to see the responses if the players each had to write a check back to their team.

The Million dollar question is will teams even be permitted to do this ..

In order to set the floor and Ceiling the NHL came up with a more complecated method then straight math ..

Taken from an earlier NHL proposal..

FLOATING TEAM PAYROLL "RANGE"

-- The parties agree that the applicable Payroll Range for each team in any given year should be representative of the League as a whole, and should not necessarily be engineered either toward the lower payroll teams as a group, or to the higher payroll teams as a group.

-- To effectuate this philosophy, the following Floating Team Payroll "Range" is being proposed.

-- For purposes of establishing the starting Team Payroll Range, each of the top five and bottom five Clubs (ranked in terms of Total Team Payroll for the 2003-04 season) will be entirely excluded from the analysis (Teams 1-5 and Teams 26-30).

-- The low-end of the Floating Team Payroll Range will be established by averaging the Total Team Payrolls (as adjusted to reflect the 24% Salary Rollback) of the ten (10) Clubs ranked immediately below the League mid-point (Teams 16-25). Using that calculation in Year 1, each Club will be obligated to spend no less than the Floor

-- The high-end of the Floating Team Payroll Range will be established by averaging the Total Team Payrolls (as adjusted to reflect the 24% Salary Rollback) of the ten (10) Clubs ranked immediately above the League mid-point (Teams 6-15). Using that calculation in Year 1, no Club will be permitted to spend more than ceiling

-- The mid-point of the Floating Team Payroll Range will be adjusted on an annual basis to reflect changes in League-wide revenue, with corresponding changes to both the low-end and the high-end of the Floating Team Payroll Range.

-- Enhanced and meaningful revenue sharing pursuant to which all 30 Clubs (assuming an appropriate level of business performance within their respective markets) would be provided the ability to afford a League-representative Team Payroll, which would be established at a point within the prescribed Floating Team Payroll Range.

Why implement this method rather then straight math ??

But the Floating Payroll Ranges were based on the previous years payrolls. Once a cap is set for the year, you can't tell certain teams that they can spend to the cap and others that they can't. Of course the result in this case would be that both the floor and ceiling the next year would be the same - either $39M or $30.6M (after escrow rebate).

I think a revenue percentage (51%/57%) or a fixed spread ($16-18M) around the 54% midpoint is a much better scheme than the one from the leagues Feb 2 proposal. That scheme over time reduces the spread between the floor and the cap untill eventually they become the same. The cap would always be lower than the top 5 teams from the previous year and the floor always higher than the bottom 5 - the cap would be the avg of #6-#15 and the floor the avg of #16-#25.

 

[Mess]

But the Floating Payroll Ranges were based on the previous years payrolls. Once a cap is set for the year, you can't tell certain teams that they can spend to the cap and others that they can't. Of course the result in this case would be that both the floor and ceiling the next year would be the same - either $39M or $30.6M (after escrow rebate).

I think a revenue percentage (51%/57%) or a fixed spread ($16-18M) around the 54% midpoint is a much better scheme than the one from the leagues Feb 2 proposal. That scheme over time reduces the spread between the floor and the cap untill eventually they become the same. The cap would always be lower than the top 5 teams from the previous year and the floor always higher than the bottom 5 - the cap would be the avg of #6-#15 and the floor the avg of #16-#25.

Also the escrow account must have rules or there would be a flaw in the system if there was no checks and balances .. NO??

Lets take big market team and a small market .. The big market team is capped at $39 mil which is far less the 54% and a small market if they spent to the ceiling would exceed it budget by way more then 54% ..

So if all teams spent to the cap then all 30 teams lets say for argument could keep the 15% escrow from the players ..

Aren't we now saying that the ceiling for big market team players is now 15% less?.

No matter what their team does they are controlled by others..

So if the small markets can't control their spending then Joe Sakic and Nik Lidstrom and Mats Sundin are guaranteed 15% pay cuts each year. These same teams that provided revenue sharing are now contributing to overspending of the other teams .. The NHL's best players because of the biggest salaries lose the most.

There must be something we are missing with either the escrow account or the Revenue sharing rules here .. as this wouldn't make sense ..

So even if small markets get to keep the 15% they spent more 54% and will show a loss on the books .. Big markets that generate in excess of $100 mil and are at the ceiling are now only at 40% .. They too now get to keep and additional 15% from their players ..

I am having trouble grasping this with the concept that this CBA is intended to make all teams competitive and profitable ..

This if all teams spent to the cap concept would make many small markets lose money and big markets would be making $$$$ hand over fist as a result of 15% rebate when they where profitable to start with at the cap ceiling ..

Look at it this way a big market team is rumoured to contribute $ 6-8 mil as revenue sharing for the league to help the small markets.. If we pick NYR or TO and say their market is 100 mil revenue then that means they are contributing 6 - 8 % as revenue sharing .. However in this all teams spend to the cap concept then big markets get a 15% rebate from escrow which is nearly twice as much as they contributed to the revenue pot .. Basically then it means that Big market owners make the profit and big market players are paying the revenue sharing to the small markets out of their pockets because they have no business sense ..

Something is wrong here ..

I believe that the true intention of the Escrow account is to protect the owners if league revenue drops .. They set the floor and ceiling for the next year based on previous year final totals and if the market changes and suddenly league revenue come in lower then expected , then the owners are allowed to withdraw funds from the escrow account to even up the 54% partnership so that both parties are responsible equally for the difference. This rewarding excessive over spending by small markets purposely must be outside that scope of intent of escrow account.