24% rollback

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Kid Canada

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Proposal was according to the Fan 590:

Luxery tax starting at 45 million (20 cents) then 50 million (50 cents) and then 60 million (60 cents)

A joke of a luxery tax in my mind.
 

hockeytown9321

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PecaFan said:
*sigh*. Payroll is not 1.5 billion. It's far less than that, it's slightly over a billion. The 1.5 billion figure is *player costs*, not payroll. Per diems, travel, insurance....

No math majors here obviously. Sportsnet and vanlady comes up with $500 milllion is 24% of 1.5 billion. The real number is around $280 million.

Is it enough? It's a couple of years of breaking even, instead of losing. I'd say no.

But at least it does show the PA is finally starting to believe.

24% of $1.5 billion is .24*1,500,000,000 or 360,000,000. to get to the $5 or $6 billion figure they are also adding in the other parts of the proposal.
 

incawg

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While I'm impressed with the size of the rollback, it really does nothing to address the fundamental problem facing the league. A 1-time stopgap is not what this league needs. To me, the luxury tax is the significant part of the proposal and, although it's not nearly enough, at least it is a step in the right direction. Overall, I'm just glad to see that the PA is making some concessions and that negotiations are taking place.
 

TazzMetal

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The 24% Rollback a is a nice start but not a deal closing move. If they keep the same RFA rules and arbitration system, that 24% will be grown back shortly into players pockets and that is even if the General Managers spend wisely.

If they can fix the RFA qualifying offers to something around 90-100% to keep rights and adopt a new revamped arbitration system that is a bit more team friendly, then I say this could possibly work with a medium luxury tax.

The players offered a luxury tax of 20 cents per dollar over 45 millions and an increased amount over 50 millions (rumoured to be 40-50 cents per dollar). That still need some revamping but it is an ok starting point, I guess.

At least there are some solid grounds for future negociations. Nice to see the ball has finally started to roll.
 

HabsoluteFate

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PecaFan said:
Oh my god. Now Sportsnet has adjusted their article to say $600 million.

They are truly idiots. $600 million is 24% of 2.5 billion dollars.
I know salaries are going up quickly, but not that quickly.

They arent idiots...the $600 million is over the term of all existing contracts...some contracts still have only 2 years left and some have 5+ years....
 

hockeytown9321

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TazzMetal said:
The players offered a luxury tax of 20 cents per dollar over 45 millions and an increased amount over 50 millions (rumoured to be 40-50 cents per dollar). That still need some revamping but it is an ok starting point, I guess.


exactly. its a starting point. If the NHl comes back with a very harsh tax proposal which would act as a cap, then they can negotiate. There had to be a starting point, and the players definitely provided one. I don't know how anyone could say otherwise at this point.

the 24% is probably also a starting point. If the league was really insistent, I'm sure that could be bumped up to 30-33% without much trouble.
 

PecaFan

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hockeytown9321 said:
24% of $1.5 billion is .24*1,500,000,000 or 360,000,000. to get to the $5 or $6 billion figure they are also adding in the other parts of the proposal.

$1.5 billion is not salary. That's *player costs*, which includes hundreds of millions of dollars of non salary items.

That doesn't change the fact that Sportsnet is absolutely 100% WRONG when they declare that "24 per cent roll back in salaries, which translates into the owners saving close to $600 million next season."

24% is less than $300 million next season. They've calculated it based on revenues, not salaries.

They've boned the math, and are too stupid too realise it.
 

PecaFan

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HabsoluteFate said:
They arent idiots...the $600 million is over the term of all existing contracts...some contracts still have only 2 years left and some have 5+ years....

Read the quote. They say $600 million *NEXT* season.
 

kerrly

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First of, great job by the NHLPA understanding the league's financial problems finally. Although with that being said, the luxury tax is a joke. This is a good place to start negotiations though. The systemic issues of this need to be revamped, i.e. arbitration, qualifying offers and of course the luxury tax needs to be stiffer.

With this week luxury tax, the owners of big market teams are laughing, it might as well be zero cents. This will allow growth on the rolled-back salaries as soon as they are up, and the free agents to be signed as if nothing had happened. I do think there is a deal to be made here but it will most definitely have to include a much stiffer luxury tax to get away from the hard cap. Like Burke said, I'm sure the owners would be happy to give that roll back back to the players to fix the systemic issues that are the real culprit of the game.
 

HabsoluteFate

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PecaFan said:
$1.5 billion is not salary. That's *player costs*, which includes hundreds of millions of dollars of non salary items.

That doesn't change the fact that Sportsnet is absolutely 100% WRONG when they declare that "24 per cent roll back in salaries, which translates into the owners saving close to $600 million next season."

24% is less than $300 million next season. They've calculated it based on revenues, not salaries.

They've boned the math, and are too stupid too realise it.

Didn't notice the "Next Year" part....either its a typo or they really are idiots ;)
 

TazzMetal

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The exact Luxury tax part of the player's has just been confirmed by TSN.ca .

Among the major points in today's proposal, the NHLPA has offered a 24% rollback on salaries and 20 cent tax on payroll over 45 million dollars. The tax rises to 50 cents on the dollar over $50 million and 60 cents on the dollar over $60 million.

Just wanted to confirm it since the exact amounts were not confirmed in my post.
 

kerrly

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FLYLine4LIFE said:
They can...and they will have to pay with Luxary taxes for going over 45 and very very strick penalties over 60.(Didnt here this yet..buyt that was was rumored) If the cut the salarys back 25 percent then only 5 or 6 teams will be over 40 million.

The roll-back is significant and I give the NHLPA props on that, but without a stiffer luxury tax, that roll-back is almost non-existent, because the bulk of the contracts will find their way back to what they were making within two or three years. There is also the fact that their are numerous players not under contract as of right now, they will not be affected by this roll back. The luxury tax is so insignificant that the players not under contract will be signed to contracts as if nothing happened. Its not about the GM's behaving, its that certain GM's from richer teams will continue spending to build their teams, and thus in turn will affect all of the remaining contracts throughout the league.
 

Trottier

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kerrly said:
The roll-back is significant and I give the NHLPA props on that, but without a stiffer luxury tax, that roll-back is almost non-existent, because the bulk of the contracts will find their way back to what they were making within two or three years.

Fair point, and my reply is admittedly simplistic (since all of the information we have at this point is scant), but riddle me this:

Why exactly would "the bulk of contracts" have to "find their way back to what they were making in two or three years"?

Seems to me that a rollback of such dramatic portions, even on its own, is akin to the NHLPA saying to the owners: "OK, you screwed up bigtime overpaying us over the course of the last CBA. Here's a mulligan. Let's see if you can manage your business more efficiently this time around."

I mean giving back 1/4 of one's salary is huge! More importantly, anti-NHLPA (read: anti-free market) fans shouldn't confuse "cost certainty" with "guaranteeing that an inept businessman will see a profit in his business (NHL franchise)."

Surprise, surprise! (debunking a common myth perpetrated here by the "hardcapistas"): MLB owners have - without a hardcap - exercised common sense and smarter asset management since the institution of their last CBA in 2002. And guess what? The median major league salary has plummeted to $800,000. Of course, the Yankees continue to operate in another economic galaxy, but every other frnachise has managed to operate under the luxury tax threshold. High as that threshold may be, it has ensured an overall slowdown of payrolls. Likewise, in the year leading up to this inevitable NHL stoppage, many franchises were already exhibiting a pullback in spending.

It can be done. A rollback allows smart, disciplined ownwers to do so. Without a draconian, socialistic measure (hardcap).

Just my opinion.
 
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kerrly

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scaredsensfan said:
God you're comments are ridiculous.

The rollback on salaries help set back the wage market for the players. Its only the owners who can **** this up... so why can they not be satisfied, with salaries going back under the level the owners want them at? As you have seen the last 2 years, the old CBA was FREAKING GREAT and the owners contained spending so much that the average salary rose less than 25K over that span.

The players have given enough. No more.

Are you for real? Who cares if it was the owners fault that salaries escalated in the first place. With a one-time rollback and a joke of a luxury tax, the spending will continue. The rolled back contracts will be back to normal as soon as they are to be re-signed again. Without a meaningful tax, teams will continue spend on these players. You're still basing your arguments on who's fault it is, but you have done nothing to solve the problem. Expecting the owners and GM's of rich teams to keep salaries low for the sake of small market teams is very unrealistic and risky. If you want the owners to stop spending like idiots and if that is what you fully expect won't happen, why not put in place a system that will deter them from doing it?
 

MarkZackKarl

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Are you still too dense to realize that the only real "spedning sprees" (which i may add have pretty much stopped) in the NHL occur on UFA players who are over 30, and thus declining. I am a Sens fan, a so called small market team fan, who doesn't give 2 ***** about what washington or new york does in terms of signing UFA's. It doesnt improve their teams and it doesnt affect ottawa's ability to be competitive.

The whole point of this roll back is to reset the market so all the claimed losses that the owners say (which are obvioulsy BS for anyone with a half an ounce of common sense) they incurred are whiped out.

I will concede that there will still be final negotiations with regards to this proposal and the NHls counter proposal before the season is announced somewhere around January 6th, 2005.

Until then its all speculation, but there will be a season, as I've said all along, and the players have offered huge concessions to help out the league from its mismanagmeent. Thats a ton considering the fact that the owners are the ones who let it get to this point.

Once again, instead of making the system idiot proof, why not just get rid of the idiots. The owners of the so called small markets dont have to bid up for players since they can develop their own. The only argument you could make is if one really rich team makes a crazy deal for a RFA and the smaller markets are impacted.. .Gladly the arbitrator looks at what is the norm, and not the exceptional case.

Its seems idiotic how all the pro-owner people point to ISOLATED incidents as if it represents the norm (see Yashin hold out) . HOw dumb is that? Looking at the exception, not the rule, will never give you even close to an accurate and logical position on the state of the league.

I think the luxury tax percentages will be adjusted, probably to 35% of payroll over 45 million and there will be some alterations obviously.

UFA ages will drop a few years, maybe to 29 or 28. I think players (thankfully) reallize that a ridiculously low UFA age would damage the sport, which they care for. The players are team guys probalby more than any other sport (baseball too) and unlike the NFL and NBA, they (for the most part) realize that acheiving the goal through building and experience is a lot more rewarding than a randomized league like the NFL where its just forced mediocrity.

Aight, back to studying for finals.
 

kerrly

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Trottier said:
Fair point, and my reply is admittedly simplistic (since all of the information we have at this point is scant), but riddle me this:

Why exactly would "the bulk of contracts" have to "find their way back to what they were making in two or three years".

Seems to me that a rollback of such dramatic portions , even on its own, is akin to the NHLPA saying to the owners: "OK, you screwed up bigtime overpaying us over the course of the last CBA. Here's a mulligan. Let's see if you can manage your business more efficiently this time around."

I mean giving back 1/4 of one's salary is huge! More importantly, anti-NHLPAfans shouldn't confuse "cost certainty" with "guaranteeing that an inept businessman will see a profit in his business (NHL franchise)."

If you're banking on the owners and GM's acting more responsibly, why not put a system into place where it forces them to act this way?
There is no question that the salaries will go back up to normal. The luxury tax is so insignificant that it will not penalize teams for overspending. The richer teams are hoping this deal is instituted, they'll go ahead and grab free agents for the same size deals. And first of all, this luxury tax will penalize the lower spending teams while in a way make it easier for richer teams. The 20 cents on the dollar is signinficant enough to keep poorer teams from not going over, but also not enough to keep rich teams from going way over. A luxury tax should be a penalty to every team, not just a slap on the wrist.

The reason Goodenow, does not want a cap, a super stiff tax, or cost certainty, is because he knows the probability of getting contracts back up is impossible. The reason the rollback is so insignificant, is because he believes that the players will see the rest of this money within 2 or 3 years. I'm sure the owners would glady give back all of the roll-back too truely fix the systemic issues. Fix these issues correctly and spending is limited and the possibility that contracts get out of hand again is completely whiped from the table. Thats why Goodenow is so against them.
 
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Ismellofhockey

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My thoughts exactly kerrly what do you think GMs will do with the newfound 24% of their budget? Go out and sign all the big name free agents still out there to even more ridiculous salaries because all teams will have enough money to be in the bidding, creating a price war à la Holik.

With that in mind a 24% rollback is almost a bonus for the players, it'll drive the next round of salary negotiations to incredible heights.

The luxury tax they propose is a joke, 20 cents on the dollar? Who's that gonna stop? add revenue sharing to that and suddenly teams like TB, Carolina, Edmonton, Minnesota...etc can afford to enter the bidding wars. It just slows down the big market teams but transfers their buying power to the small markets.

Once again that kind of proposal almost works to the PA's advantage.

They're really not proposing anything significant until you hit 75 cents on the dollar, starting at $40M.
Under the proposed luxury tax, a $50M payroll pays $1M in luxury tax oooh frightening!
A $60M team pays $6M.
A $65M team pays $9M.

Basically it only becomes a deterrent over $60M. How many teams are over $60M, five?
 

vanlady

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It's goona be kind of hard for big market teams to spend what they don't have. The PA is going after significant revenue sharing again.
 

PecaFan

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Trottier said:
Seems to me that a rollback of such dramatic portions, even on its own, is akin to the NHLPA saying to the owners: "OK, you screwed up bigtime overpaying us over the course of the last CBA. Here's a mulligan. Let's see if you can manage your business more efficiently this time around."

Which assumes that it was "screwups" that cause the failure in the first place. Which I don't believe. I believe it was systems that caused the problems. Owners in one market do things which make sense for them, but which affect other owners through arbitration, general negotiations, qualifying offers etc.

Basically, the 24% rolls back the average salary to 1.4 million. When was that? 1998 or so?

I also note that arbititration is still a 100% or 105% system. So all salaries are guaranteed to rise still, until a player hits UFA status.
 

Trottier

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scaredsensfan said:
The whole point of this roll back is to reset the market so all the claimed losses that the owners say they incurred are wiped out.

Bingo! :handclap: While at the same time calling the bluff of the owners who seemingly must be saved from themselves and own lack of business acumen. ;)

Once again, instead of making the system idiot proof, why not just get rid of the idiots.

Exactly! And, unfortunately, some/many of the fans of these so-called "small market" teams (a euphemism for teams incapable of competing for the Cup) seek to make the system idiot-owner proof in the insincere name of "parity". As if Joe Fan cares about Edmonton and NYR's ownership profits being equal. :speechles What the pro-hardcap fan really cares about is finding someway/anyway for their mediocre team to compete for the Cup. Even if it means watering down the competition to his team's level! Weak and thinly-veiled motivation, IMO.

UFA ages will drop a few years, maybe to 29 or 28. I think players (thankfully) reallize that a ridiculously low UFA age would damage the sport, which they care for. The players are team guys probably more than any other sport (baseball too) and unlike the NFL and NBA, they (for the most part) realize that acheiving the goal through building and experience is a lot more rewarding than a randomized league like the NFL where its just forced mediocrity.

So true. Throughout this saga, have read too many posts where fans are misguidedly assigning NBAPA-mentality (me! me! me!) to NHL players.

Great post, IMO.
:)
 
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kerrly

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scaredsensfan said:
Are you still too dense to realize that the only real "spedning sprees" (which i may add have pretty much stopped) in the NHL occur on UFA players who are over 30, and thus declining. I am a Sens fan, a so called small market team fan, who doesn't give 2 ***** about what washington or new york does in terms of signing UFA's. It doesnt improve their teams and it doesnt affect ottawa's ability to be competitive.

The whole point of this roll back is to reset the market so all the claimed losses that the owners say (which are obvioulsy BS for anyone with a half an ounce of common sense) they incurred are whiped out.

I will concede that there will still be final negotiations with regards to this proposal and the NHls counter proposal before the season is announced somewhere around January 6th, 2005.

Until then its all speculation, but there will be a season, as I've said all along, and the players have offered huge concessions to help out the league from its mismanagmeent. Thats a ton considering the fact that the owners are the ones who let it get to this point.

Once again, instead of making the system idiot proof, why not just get rid of the idiots. The owners of the so called small markets dont have to bid up for players since they can develop their own. The only argument you could make is if one really rich team makes a crazy deal for a RFA and the smaller markets are impacted.. .Gladly the arbitrator looks at what is the norm, and not the exceptional case.

Its seems idiotic how all the pro-owner people point to ISOLATED incidents as if it represents the norm (see Yashin hold out) . HOw dumb is that? Looking at the exception, not the rule, will never give you even close to an accurate and logical position on the state of the league.

I think the luxury tax percentages will be adjusted, probably to 35% of payroll over 45 million and there will be some alterations obviously.

UFA ages will drop a few years, maybe to 29 or 28. I think players (thankfully) reallize that a ridiculously low UFA age would damage the sport, which they care for. The players are team guys probalby more than any other sport (baseball too) and unlike the NFL and NBA, they (for the most part) realize that acheiving the goal through building and experience is a lot more rewarding than a randomized league like the NFL where its just forced mediocrity.

Aight, back to studying for finals.

I really don't think the league has been through that much mismanagement when coming to signing players. Of course there are some players seriously overpaid. But the big thing driving up market value is the rich teams can afford to pay players more than the poorer teams can.

I do agree that the roll-back was very significant and in fact I was very impressed by the willingness of the NHLPA to recognize that there are significant problems with the league. The tax needs to be stiffened dramtically. This will allow all teams to have an equal shot be able to dictate what currents contracts should go for, not just a few richer teams spending beyond the rest of the league's limit.

There is a deal to be made here. I think if the tax is stiffened, qualifying offers are tweeked, and arbitration is revamped to provide even more oppurtunities for the team to take players to arbitration.
 

MarkZackKarl

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My thoughts exactly kerrly what do you think GMs will do with the newfound 24% of their budget? Go out and sign all the big name free agents still out there to even more ridiculous salaries because all teams will have enough money to be in the bidding, creating a price war à la Holik.

What the hell? Do you expect the players to hold some type of over-under prediction game based on how stupid they think owners will be? Note :the budget (what a concept eh??? ANHHHH WE NEED A CAP!) is set by the owner. The GM then makes use of the resources available in a way they find to be optimal.

Easy. Owner says " OK, GM, your budget is 47 million. Do not spend more).

You really think that the players are the ones that should concede to a ridiculously restrictive system even more than they are already to try and prevent the owners from being idiots? Why again is it the players fault for the owners inability to keep their budgets in line?


(btw, in case you didnt notice, I really cant see any huge bidding wars last summer in which the GMs and owners reigned in their spending. Why dont they do it every year? PS. Its not collusion since the owners claim they would lose money by offering higher (than what they offer) salaries. )

One final thing: Why on earth do people still think that UFA's make a team competitive??? Only on RARE occassions (Toronto) does it do anything, and Toronto is a peak 2nd round team that can only beat Ottawa.

Big f'ing deal. The teams that win are the teams that develop and trade for players who are under 30 and restricted. End of story. (There are a COUPLE exceptions but they are so rare its not even worth discussing. And once again that would be looking at the exception, not the norm.)
 

FLYLine27*

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The Owners will just mess up ALL Over again and cause the market to skyrocket again.

Maybe they should take all Owners and GMS...FIRE THEM all and get a bunch of guys who can manage money better so the average salary doesnt go from 1 million to 1.9 million in a spam of 5 years.


The players are GIVING the owners a GET OUT OF JAIL FREE CARD for all there horrible spending in the past years but they dont relize this..well maybe they do but dictator bettman calls ALL shots so it doesnt really matter.
 

kerrly

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PecaFan said:
Which assumes that it was "screwups" that cause the failure in the first place. Which I don't believe. I believe it was systems that caused the problems. Owners in one market do things which make sense for them, but which affect other owners through arbitration, general negotiations, qualifying offers etc.

Basically, the 24% rolls back the average salary to 1.4 million. When was that? 1998 or so?

I also note that arbititration is still a 100% or 105% system. So all salaries are guaranteed to rise still, until a player hits UFA status.

Your first paragraph nicely articulated a point that I've been trying to make in my posts but I couldn't say it quite so simply and effectively.
 

Trottier

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PecaFan said:
Which assumes that it was "screwups" that cause the failure in the first place. Which I don't believe. I believe it was systems that caused the problems. Owners in one market do things which make sense for them, but which affect other owners through arbitration, general negotiations, qualifying offers etc.

Funny, neither Calgary, nor TB felt forced to raise their payrolls anywhere near to the levels of the big spenders, and both played well in June. Proof it can be done.

Now, if one wants to suggest that payrolls will continue to rise, albeit at a slower pace, no doubt. But that's Economics 101, as you know.


Basically, the 24% rolls back the average salary to 1.4 million. When was that? 1998 or so?

I'm sure any of us would gladly roll back our salaries to 1998 levels (read: nearly seven years ago!) without so much of a thought, eh? ;) I'm not casual about my own earnings, so I'll never to be casual about someone else's, even if they make millions more than me. But that's just me.

I also note that arbititration is still a 100% or 105% system. So all salaries are guaranteed to rise still, until a player hits UFA status.

Not if an owner walks away from the arbitration process (prior to a hearing). Has happened many times in MLB in recent years. Players effectively become free agents. Discipline.

:)
 
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