Sportsnet: NHL includes stiff luxury tax in latest proposal

[ColoradoHockeyFan]

http://www.sportsnet.ca/hockey/article.jsp?content=20050506_125209_5728

The proposal is believed to include a stiff luxury tax system, with a tax structure adjustable to accommodate the rate and threshold on how the proposed CBA would be working.

There is speculation among hockey circles of a dollar-for-dollar tax with revenue sharing among the NHL generated from this system.

The luxury tax would trigger a hard cap agreement that is expected to come in with a floor of $25-million and a ceiling below $35-million.

Click to read more...

 

[pittengineer]

Seems like they are close on the structure of an agreement, but the upper and lower ceiling limits seems to still be the sticking point.

 

[Kritter471]

Good boys.

Now meet in the middle at $42.5-$45 million for the top of the ceiling and we're really getting going.

 

[Weary]

The luxury tax would trigger a hard cap agreement that is expected to come in with a floor of $25-million and a ceiling below $35-million.

...the union would accept a payroll range of $30-million to $50-million per team....

That's quite a difference.

 

[tantalum]

That's quite a difference.

True. But you know the union offer is the best they can "hope" for and the league one is the best the league could hope for. They are high and low to leave room for negotiation. I see a minimum of between 25-30 and a max no higher at the 42.5 offered by the league in February.

 

[ColoradoHockeyFan]

28-ish and 40-ish, anyone?

 

[Drury_Sakic]

I think you go 29.5.....42.5
2.50 down to 39.5
1.50 down to 37.5
Doller down tax to 35
.50 tax down to 32

and call it a day fokes..

Come on.. its just not that hard...

 

[Levitate]

The luxury tax would trigger a hard cap agreement that is expected to come in with a floor of $25-million and a ceiling below $35-million.

can someone explain to me wtf this is supposed to mean? a hard cap agreement with a ceiling below $35 mill, AND a luxery tax on top of that? that's the NHL's idea of a CBA? or am i misinterpreting this?



if you have a hard cap that low then there's no point to a luxery tax in that range, but maybe i'm just not understanding what they're trying to say...maybe that the luxery tax kicks in at $35 mill? meh

 

[Luongownage]

Bettman should keep Jacobs and Karmanos out of the room and hopefully Linden will re-enforce the point of dwindleing player patience with Goodenow to Bobby boy. If those two things are accomplished by both of the sides at the bargining table, maybe MAYBE something will come from this new structure that is being reported.

I refuse to believe any hockey will be played in October until Bettman is at a press conference telling us explicitaly otherwise.

 

[RLC]

SO lets do this at, 25 million for the low and 40 million for the high + that dollar for dollar lux tax from 40 - 45 million with the maximum allowable limit at 45 total.
Re-do the arbitration to allow both sides.
Rookies get throwen under the bus as usual
But what if the league come back at a 1.2 billion revenue for 2006, what are your suggestions? anyone?

 

[Drury_Sakic]

SO lets do this at, 25 million for the low and 40 million for the high + that dollar for dollar lux tax from 40 - 45 million with the maximum allowable limit at 45 total.
Re-do the arbitration to allow both sides.
Rookies get throwen under the bus as usual
But what if the league come back at a 1.2 billion revenue for 2006, what are your suggestions? anyone?

I am assuming that the cap is going to be linked..... there is no word in the article regarding that...

The PA can get bigger caps down the road with linkage(revenue will return)....they just have to set favorable triggers to go both ways..

so while it might be a 25-40 range.... that would lower with revenue...(in theory at least)

 

[CGG]

Looks like they're getting closer. But if you're putting in a stiff luxury tax and STILL have a cap of only $35 million, when the players were supposedly looking for a $30 million floor, there might not be a deal any time soon. Or is $35 million where the luxury tax kicks in?

 

[Kritter471]

SO lets do this at, 25 million for the low and 40 million for the high + that dollar for dollar lux tax from 40 - 45 million with the maximum allowable limit at 45 total.
Re-do the arbitration to allow both sides.
Rookies get throwen under the bus as usual
But what if the league come back at a 1.2 billion revenue for 2006, what are your suggestions? anyone?

Two things -

a.) you adjust (but how? do you percentile the player contracts or just the cap? what if a team has $34 committed with $8 remaining to sign players but the cap drops to $35 and they have 15 guys signed? does it include two-way contracts or AHL guys?) - the PA's idea of a floating linked cap per team may have merit in this case.

b.) you make it easily adjustable, as the potential 2005-2006 season would also be an anomoly in its low revenue. Perhaps ignore that season, chalk it up to losses from the lockout and should it be really low, average 2001-2004 revenues to establish a new cap.

 

[SENSible1*]

I see 25 to 37.5 as the final range.

 

[mackdogs*]

can someone explain to me wtf this is supposed to mean? a hard cap agreement with a ceiling below $35 mill, AND a luxery tax on top of that? that's the NHL's idea of a CBA? or am i misinterpreting this?



if you have a hard cap that low then there's no point to a luxery tax in that range, but maybe i'm just not understanding what they're trying to say...maybe that the luxery tax kicks in at $35 mill? meh

I'm with ya. I read it about 70 times and my brain just got more and more sore. No way the PA agrees to a hard capped number below 35. Maybe someone can make sense of what the author was trying to say. This article reminds me of an Eklund post... pure speculation with no substance. Too bad sportsnet has proven to be a bad source of legit information.

 

[Levitate]

But if you're putting in a stiff luxury tax and STILL have a cap of only $35 million, when the players were supposedly looking for a $30 million floor, there might not be a deal any time soon. Or is $35 million where the luxury tax kicks in?

that's what i don't get...this article is worded horribly. get some decent writers, sportsnet

 

[Luongownage]

Maybe with this tax we can stop hearing Healy wine and moan about how the league isn't willing to include 'meaningful revenue sharing'

 

[Pepper]

If it's down to numbers game, I'm extremely optimistic. If the basic system is still up to debate, we're seeing a dejavu.

 

[CGG]

Right or wrong, I don't see the players accepting a cap lower than $42.5 million based on "normal revenues" since that is roughly what the average salary was, and they could have had that last season. Unless they have huge owner concessions in all other areas.

If the cap is initially lower than that to start because of lower revenues, I can understand that, but based on $2.1 billion, you have to be at least at the same $42.5 million.

 

[Crows*]

I don't care about the numbers anymore.

I just want hockey.

 

[Morbo]

We already know the players wouldn't be interested in an absolute ceiling below $35 million. If they were we'd have played this season.

I agree that the article is badly worded...the "trigger" sentence is not really clear.

I would assume that 35 would be the ceiling where you have to start paying the dollar-for-dollar luxury taxes. That would make some sort of sense.

 

[nhlfan79]

Actually, I thought the article was pretty clear. This proposal sounds like a rehash of the NHL's earlier proposal with the four "trigger" points. In other words, the NHL is willing to accept a luxury tax system without a cap (initially) that could convert into a hard cap system if certain financial criteria are met.

At least, that's what I read the article to say. How exactly is this considered moving forward?

 

[GKJ]

Whether anyone wants to do it or not, the final numbers should be between 29 and 44

 

[Pepper]

Whether anyone wants to do it or not, the final numbers should be between 29 and 44

Make it 25-40M with 100% luxury tax starting at $32.5M and we have a deal. Based on 2.1B revenues, changed accordingly.

 

[CGG]

Make it 25-40M with 100% luxury tax starting at $32.5M and we have a deal. Based on 2.1B revenues, changed accordingly.

That ain't gonna fly. The 29-44 numbers make a lot more sense. At 25-40, the absolute max payroll is $1.2 billion, only 57% of the $2.1 billion. And for that to happen, each and every team including Nashville would have to be willing to pay an extra $7.5 million in luxury tax. Lighten up a bit.