Understanding the Cap...

Discussion in 'The Business of Hockey' started by ClosetOilersFan, Aug 6, 2005.

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  1. ClosetOilersFan

    ClosetOilersFan Registered User

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    A brief tour of these forums, and it apparent that a very small minority of members here understand the purpose of the cap.

    The cap is not designed to:

    Keep ALL homegrown players on their respective teams [This would be accomplished by extending the age until UFA... as we know, it's actually been reduced, thus making locking in your players MORE difficult] Yeah, teams with lots of young talent don't like this, but most of them have small budgets and benefeit from the cap; small market teams can't get everything.

    Stop long-term/major signings [related to point below]

    Deflate salaries of Top 20 players [Franchise players will always be in demand, and warrent 5-20% of a team's overall payroll]

    The Cap was designed to:

    Create a FAIR environment where small-market teams such as Edmonton, Calgary, Pittsburgh, etc. could compete with big-city teams. Without the cap, Pronger/Iginla etc would not be with their current teams.

    Under the old system, one of the rich teams would have simply outbid Calgary for Iginla and Edmonton for Pronger [Countless examples, but these are most relevant to me]. For instance, with Pronger, the Blues would have simply paid an extra 1-2 million, but the cap disabled them from doing this.

    The cap's main benefeit is franchise players will be dispursed around the NHL, as opposed to being together on 5-6 teams who could afford 45million+ payrolls.

    It's second benefeit will be that the average salary will in fact, go down. [It actually already has... people are forgetting that guys like Pronger would have earned MORE than 6.25 million under the old CBA; same goes for Iginla and Khabibulan [sp?]]

    The top players will always earn top dollar, but at the end of the day, when teams can't go over 39, many players are going to have to accept lower salaries to play.

    The cap WAS DESIGNED to increase profit and competition [thus the appeal of hockey to fans outside of big-city teams]. Now that teams such as Toronto have an excuse for not signing the big UFA's, they save on salary - their profit will go up [let's be realistic, the big-market teams aren't going to lose many fans over this; most that are lost probably don't make them much anyway...]

    Trust me, the cap is already accomplishing this.

    Fans of Edmonton, Calgary, Pittsburgh, etc. are already estatic and there's more than 60 days until hockey!
     
  2. ClosetOilersFan

    ClosetOilersFan Registered User

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    I forgot another point within a cap system.

    Salaries will eventually go down, simply by natural balance of mathematics.

    If a team decides to over-compensate one guy, they must at some point under-pay someone else.

    Now of course, the ability for smaller teams to pickup a franchise player will naturally increase their payroll [which most have planned to do under the new CBA environment], and will slow down this natural process of balance.

    Furthermore, it may take a few years before the this process completely takes place. For instance, if all the teams are signing this high-pay, long-term contracts, they will have little or no space next year or the year after when other free agents are available. This will lead to less competition for UFA's, and even RFA's, and will naturally deflate income.
     
  3. joepeps

    joepeps Registered User

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    You are fogetting the part where Toronto and other profitable teams are paying for the small markets teams players lol....
     
  4. GSC2k2*

    GSC2k2* Guest

    Give it up. Without the rest of the league, Toronto is playing with itself. Mind you ...
     
  5. ClosetOilersFan

    ClosetOilersFan Registered User

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    gscarpenter2002 - Well put, lol.

    joepeps - The way it works is simple, the money is in major TV deals [look at the NBA/NFL]. In order for the NHL to ever get a strong, high $ deal, every team must be drawing fans. In an environment where half the teams are about to go bankrupt, the TV deals are lower, costing the big-market teams far more money than revenue sharing ;) Once again, look into the NFL.

    There is a reason powerful teams within the NHL such as New York [the rangers] and Toronto agreed to the deal. Long-term, it's more profitable for them.
     
  6. Resolute

    Resolute Registered User

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    And despite this, Toronto and the other "profitable" teams (which apparently excluded the Red Wings and Rangers in 03-04, but included the Oilers and Flames, go figure) will make larger profits than before, and they still get to be highly competitive...

    ...assuming they have competent management.
     
  7. ClosetOilersFan

    ClosetOilersFan Registered User

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    Resolute - Competent management and scouting is going to crucial for success under the new CBA, the way it always should've been. I'm looking forward to the increase in management strategy :)

    It'll be exciting for once knowing that the small-market teams will be able to make noise, so things will be much less predictable.
     
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