A Solution to the current problems of the CBA

Discussion in 'Fugu's Business of Hockey Forum' started by Columbia*, Oct 31, 2006.

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  1. Columbia*

    Columbia* Guest

    After reading about Dave Nonis' rant on how the current CBA prohibits teams from staying together for longer than a 2-3 year span I started thinking about solutions that would work within a cap environment that didn't necessarily increase the UFA age (which the PA would never agree to in the first place) I suggest that the NHL implement a "cap credit" system, similar to pollution credit system that regulates emissions in the United States. Under such a system, teams will recieve, let's say 5 'cap credits' at the beginning of the year each worth 1 million dollars in cap space. A team can trade these credits like draft picks, so if they trade one away then they lose a million dollars in cap space and if they acquire one then their cap increases by one million. This gives teams who want to compete, and need more cap space to sign their players a chance to trade away picks and prospects for more cap space. Conversely this allows teams who are in a rebuilding mode to trade away some cap space which they probably wouldn't use for assets like draft picks and prospects. This system also facilitates the trade of big-albatross contracts. Say you have player 'x' on your team, who has a huge contract but for whatever reason isn't performing well. In the current system, such players are near impossible to move but if a Cap Credit system is implemented then those players can be moved if Credits are traded along with their contracts. This prevents GM's (see Clarke) from being handcuffed by large albatross contracts to a small extent.

    A system like this has some weaknesses, namely it is prone to abuse. Some markets who never spend at the cap may be more willing to trade their space away and other markets (Detroit, NYR) will always want more cap space, thereby destroying the parity the new CBA created. This can be ammended by limiting the ammount of Cap Credits a team can acquire/trade away. That way the salary disparity will be kept to a minimum.

    I see this move as a 'bone' to throw to the Fans in larger markets who have paid the cost of having their teams basically dismantled to the smaller market teams' benefit.

    What do you guys think?

    - Mike C.
     
  2. Hasbro

    Hasbro Can He Skate?! Sponsor

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  3. GSC2k2*

    GSC2k2* Guest

    The cap is not a "problem" that needs to be "fixed" in this manner.

    That is all.
     
  4. alanschu

    alanschu Registered User

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    I think the fans that got "boned" by watching their teams dismantled will get over it soon enough.
     
  5. Irish Blues

    Irish Blues Present once again

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    I think it's a knee-jerk reaction to what Dave Nonis said. Nonis needs to understand that if other GM's and owners had a problem with the age for free agency dropping to 27, it wouldn't have been in the final version.

    Apparently they didn't see it as that big of a deal ... so he needs to deal with it.
     
  6. Crazy_Ike

    Crazy_Ike Cookin' with fire.

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    I think your idea is an abysmal betrayal of everything we lost hockey for a year for.

    If you want loyalty, then it's up to the players to show it by making their financial demands fit within the cap budget. If they don't want to do this, then... well, you know what their "loyalty" is worth.
     
  7. Brent Burns Beard

    Brent Burns Beard DontTouchMyDonskoi!

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    your system would not guarantee the owners 46% of the revenue and therefore would be nixed without further discussion.
     
  8. Brent Burns Beard

    Brent Burns Beard DontTouchMyDonskoi!

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    oh and this part .... the owners care nothing about the fans when it comes to this issue. if they cared, they would have resolved this without throwing away the season. they cared more about crushing the union then about the game itself and used the naive sheep (fans) to accomplish it.
     
  9. GSC2k2*

    GSC2k2* Guest

    You will never get over this, will you, DR?

    The fans "accomplished" nothing.
     
  10. Columbia*

    Columbia* Guest

    Obviously if a team is willing to trade for cap space they are willing to take that risk. League Salaries are still capped at 46% of total revenues so there is no problem there.
     
  11. Columbia*

    Columbia* Guest

    I think what we have right now is a system that is too restrictive to the big market teams who are willing to spend a bit more money to keep their teams intact. Players are human, and respond to incentives just as we do meaning they will most likely go after the bigger pay cheque. I don't see anything wrong with the likes of Detroit or New York being able to acquire cap space that other teams may not be using. I don't see anything wrong with a team who is rebuilding to be able to trade away their excess cap space affests that will help the rebuilding process.
     
  12. Columbia*

    Columbia* Guest

    The thing is, I see this system as being superior to the one we have currently. It will benefit players (because then all the cap space will theoretically be used up) it benefits owners who can adjust their own cap to a limited extent to which they feel comfortable and it will benefit fans as teams can stay together longer and the rebuilding process for teams in disarray won't last as long.
     
  13. GKJ

    GKJ Global Moderator

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    I think some people (one of them being Dave Nonis) that the players after a whole year of sitting out, would be willing to take a cap and not have something be returned. Wrong.
     
  14. Crazy_Ike

    Crazy_Ike Cookin' with fire.

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    So this has nothing to do with loyalty at all, you simply want certain teams to be able to go over the cap, thereby allowing them access to more or better players than teams not able to go over the cap.

    ...

    :help:
     
  15. Hawker14

    Hawker14 Registered User

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    the nhl is better, and more fair, because of the salary cap. i wouldn't change a thing.

    players moved around before the cap as well. gm's just need to be smarter...like kevin lowe getting ales hemsky to sign a six year deal for under $ 3 million/year, and forego years of ufa. that's a great move that other gm's should be emulating with their young players.
     
  16. kdb209

    kdb209 Registered User

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    No, there is a big problem here - for the players.

    Those tradable cap credits will invariably increase the total $$$'s spent on salary, so the players give back even more through escrow.

    Remember, the current system is NOT designed for all teams to spend to the cap. It has the implicit assumption that the average team spends to the Mid Point, not the Upper Limit. As it is, the average team payroll is significantly above the Mid Point, and the players will very likely be giving a big chunk of change back to the owners. Your "solution" just makes this problem worse.

    But, I agree with others here - the Cap's not a problem, don't fix it.

    While I (like many fans) would have preferred a bit higher UFA age, that was the price the owners had to pay to get basically every damn thing they wanted in terms of dollars - salary rollbacks, salary cap, and linkage. The UFA concession was purely a non-economic one. In the zero-sum world of Cap economics, UFAs do not inflate salaries, they just redistribute them.
     
  17. Irish Blues

    Irish Blues Present once again

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    Your system throws out the idea of "there's a hard cap that everyone has to abide by", not to mention it would mean rewriting provisions in the CBA that prohibit the transfer of payroll room (which was put in there to prevent exactly what you're proposing) and in effect raises the cap by another $5 million (unless these credits are supposed to kick in starting at $5 million under the cap ... you're not clear at all on this). That means teams will likely start racing for the new, higher cap (again, unless these credits kick in starting at $5 million under the cap) and guarantee even higher escrow payments by the players.

    You really think the players are going to go for that?

    You also mention how this system can be abused. Right there should be a huge red flag, even if you try to put safeguards into place. The current system is designed to eventually bring parity to the league by spreading the talent level out among all 30 teams ... giving a team a way to take advantage of the existing system by increasing the amount they can spend is a sure-fire way to encourage the former system to return (and someone will push it to the absolute limit).

    It's a nice thought, but in reality it will encourage the have's to spend away again at the expense of the have-not's ... something the current CBA was designed to prevent from happening again.
     
  18. Alan Jackson

    Alan Jackson Registered User

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    I can see Nonis' point a little, but the reality is that the Penguins have a better chance to keep guys like Crosby and Malkin under this new system than they did previously.

    The Penguins will be able to match any offer for Crosby or Malkin (assuming they have the cap space).

    Its true that under the old system, players like that wouldn't be unrestricted so early, but the have-not teams were still trading away players because they couldn't meet contract demands of players.

    Now that you don't have teams like Detroit, NYR, etc., spending so much more than other clubs, the Penguins will at least have a shot to keep thier young stars.

    That said, I do wonder if some sort of "Larry Bird" exemption might have been a good idea.
     
  19. Irish Blues

    Irish Blues Present once again

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    If you're going to change something, add the "Larry Bird" exemption (you can resign one of your own free agents and not have him count against the cap - in this case, he'd count at some fraction of his actual contract value) or allow teams to designate one of their soon-to-be UFA's as a "franchise player" for one year at 125% of his previous year's salary ... with the provision that a team can only franchise one player at a time and they can only designate that player as their "franchise player" once during the player's career.

    Even with those thoughts in mind, this is Year 2 of the CBA. I don't get why we have to change the way the salary cap works until we've seen it in action for a few more years and teams start developing a feel for how to work within it.
     
  20. Trottier

    Trottier Very Random

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    Irish - I'd be interested in your and others' take on this variation:

    What about allowing teams the caveat of exceeding the cap limit to retain their own players (only)? Or, if that is too liberal, allowing teams to exceed the cap to retain their own drafted players? In both situations the UFA age would remain as stipulated in the CBA, and one could even put a "second" ceiling on limit (%) to which a team could go to retain its own players.

    I do not see that giving unfair advantage to wealthier franchises, certainly not on a significant scale.

    Likeiwse, unless I'm missing something (correct me if I am mistaken) that does not harm the players in any way. In fact, it may "up" their value on the open market.

    Of course, if as some have indicated in this thread, they see no flaw in the current system, then my scenario is a non-starter, so no need for a reply in those cases - we simply have a differing point of view. I'm only interested in those who, like Nonis (and myself) view the UFA age limit and its implications as a potential problem...not for a specific team, but for the league as a whole.

    ***

    Over time, I see the current system devaluing drafting more and more, as teams are essentially drafting and developing young players for benefit of the entire league, as opposed to themselves. Such a lack of continuity may be of no concern to some fans. However, others of us see it affecting the quality of play, as well as fan affiliation. People on the other side of this argument will point to the NFL, with its "mercenary" system of UFA and its overall succe$$ as a highly profitable business. However, that is apples and oranges. The NFL is a sport with a national following, moreso than any other today. Hockey is regional in the States. A semblance of roster continuity and stability is a must in each market to retain (build) fan interest, IMO. This will play out over the years.

    Just my opinion.
     
  21. kdb209

    kdb209 Registered User

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    I don't see the NHLPA ever agreeing to a system that treats two players on the same team - one drafted and the other aquired by trade - differently. Suddenly, just the fact that you were traded can take dollars out of your pocket.

    There is no way that the owners accept any scheme that circumvents the 54% Players Share, so you are still at a zero sum game. A Larry Bird kind of exception may give some extra $$$s to 30 or so players and takes money away from the other 600+. Somehow, I don't see that being approved by an NHLPA wide vote.
     
  22. Irish Blues

    Irish Blues Present once again

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    I agree. The only way that exemption makes sense is if it doesn't count into the players' share of revenues (or counts at a fractional rate) but at the same time becomes something that can't be introduced in arbitration as a comparable for either side. At that point there's aspects neither side likes (the owners won't like that salary not counting against the players share, the players won't like the fact that those contracts can't be dragged into arbitration), but that might actually get it through knowing both sides lose something in this.

    Any 'tagging' scheme has to be focused on a team's on impending UFA's, regardless of whether the team drafted those players or not, and has to have a limited time frame (meaning a team couldn't tag a player over and over again even though the player may be eligible for UFA and want to test the market). Otherwise you have a scenario like with Los Angeles and Jack Johnson - the Kings didn't draft him, so they wouldn't be able to tag him ... or you have something like Pittsburgh (yes, we'll pick on the Pens some more) where say Malkin wants to look around and the Pens keep tagging him so he can't.
     
  23. Trottier

    Trottier Very Random

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    That's a great point and one I overlooked.

    So, in order for a "cap exception" to work (if that is the accepted objective for the sake of this discussion), it would have to include all players on a team's current roster. That is, the team would be able to exceed the cap in order to retain its own players, not just ones it drafted.

    Which leads to your point about owners adhering strictly to the 54% share: how does the NBA get around that? That is, they allow a cap exception for teams to retain their own, yet they still have a fixed annual share of overall revenue that is earmarked for players. Probably a lot more complicated math than either of us care to go over at this point, but I am curious about that.
     
  24. kdb209

    kdb209 Registered User

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    There is no comparison between the NHL and NBA caps. The NHL is a hard cap, calculated on a daily basis. The NBA is a very soft cap, with MANY exceptions and exclusions, that is based on annualized salaries. The vast majority of NBA teams are over the cap which makes in-season trades virtually impossible, since all salaries involved then have to match up player for palyer within 15%. Looking at the NBA cap - you DO NOT want to go there.

    The NBA has a league wide cap and escrow, but it is a max limit, not a guaranteed Players Share. Total salaries are limited to 57-58% of BRI (Basketball Related Income) revenues, but the cap itself is based on only 51.5% of BRI to allow for the myriad of exceptions.

    The closest real comparison to the NHL is the NFL which does have a hard cap - the biggest difference is that NFL contracts are not guaranteed, so you see huge signing bonuses. And BTW, the Franchise Player and Transitional Player tags in the NFL actually have nothing to do with the cap. They are just restrictions on free agency - the salaries of Franchise Players count against the cap, just like any other player.
     
    Last edited: Oct 31, 2006
  25. Hoss

    Hoss Registered User

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    The only problem with the CBA belongs between the ears of protectionist individuals like Nonis. I say we move to a truly capitalistic, market driven economic reality. Illiminate, arbitration, do away with the draft, and stop the serfdom that is agency! All players are free agents and may sign for whatever they can get...limited of course to 20% of max cap space, based on 54% totasl revenues.
     

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