Are we witnessing the failure of the cap floor?

Discussion in 'Fugu's Business of Hockey Forum' started by RyanMac, Jul 1, 2011.

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  1. RyanMac

    RyanMac Registered User

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    Some of the deals signed today are seriously going to inflate the market. And a lot of them were in the name of a certain Eastern Conference team struggling to meet the cap floor.

    Have fun re-signing your middle tier players NHL!
     
  2. Seachd

    Seachd Registered User

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    So if they don't sign in the NHL, where are they going to go?
     
  3. RyanMac

    RyanMac Registered User

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    Wait, what?

    If you disagree with the premise that's fine, but the response has nothing to do with my post. I'm just confused now.
     
  4. RyanMac

    RyanMac Registered User

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    I'm suggesting the market has been severely inflated because a certain team is signing average players to contracts well above their usual value just so they can meet the cap floor.
     
  5. angry_treefrog

    angry_treefrog void

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    Every year during free agency players are signed to above market deals. It's the nature of free agency.

    This year the team doing the overpaying is the "wrong team" so it's an issue.

    You all really need to get over it.
     
  6. octopi

    octopi Registered User

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    I agree.

    The Cap floor shouldn't be this high....
     
  7. Teemu

    Teemu Trick question?

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    I dont think the floor really had much to do with Dale's signings. He was making those one way or another.
     
  8. RyanMac

    RyanMac Registered User

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    I think it had everything to do with those signings. :)
     
  9. RyanMac

    RyanMac Registered User

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    No need for hostility. We are just here to discuss hockey.
     
  10. thecupismine

    thecupismine Registered User

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    The failure of the cap floor has more to do with the fact that its going to make a lot more of the smaller market teams lose money than it has to do with inflation of UFA contracts, as that happens every year.
     
  11. Mathradio

    Mathradio Drive for 25

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    If we could remove the cap floor (or at least lower it) would the league be any better off?
     
  12. redcard

    redcard System Poster

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    No, because teams up against the cap ceiling aren't going to sign players to those deals. This is why the floor is in place, to force teams to spend and acquire "mid tier players" rather than mailing in the season in July. There are many factors that go into a free agents decision, money and competitiveness likely being the 2 most important. If a free agent really wants to play for a competitor and said competitor has a limited amount of cap space the dollar value of a prospective contract will not be inflated by contracts signed by uncompetitive teams.
     
  13. Burningblades

    Burningblades Registered User

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    I think this is showing the success of the cap floor, teams like Florida are being forced to ice a competitive team. And no matter how much money the GMs sign players too they are still getting payed the same amount as a whole. As per the CBA players get 57% of revenue or whatever it is the distribution of this money is just more favourable to non-star players then before.
     
  14. AmazingNuck

    AmazingNuck Registered User

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    Cap floor is implemented because the players are owed a certain % of the revenue, I believe. If anything, the cap floor is a success. It was in on the NHLPA's hands, not the general managers, because the players needa get paid. The only reason the contracts are so imbalanced is because players signed for less than market value back when the cap was lower. You think Fleischmann gets a 4.5m deal if Kesler, Giroux, Ryan, Getzlaf, Perry, etc. all make their own market value? Or rather, you think it looks as bad?

    EDIT:

    Also it appears the players that are benefitting the most are the middling players. Most of the 4th liners are still getting paid relatively little and all the franchise/star players are getting locked up before free agency starts at discounts due to loyalty. The middling players are the ones being let into free agency and have 0 loyalty to their new franchises, thus having no hindrance in starting a bidding war between teams.
     
    Last edited: Jul 1, 2011
  15. Jack Bourdain

    Jack Bourdain ¯\_(ツ)_/¯

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    What OP means is that, if you're going to be paying all your bottom 6/journeyman players a premium of 1-1.5M as a UFA, what are you going to do when good/better players hit the market? That premium will be north of 2M and so you'll essentially be overpaying players by around 25-30% (a number I sorted out of my ass, based on the thinking that a 4M player today would be worth 6M as a UFA, i.e Horton).

    The thing that doesn't add up is that, even if the cap floor and cap ceiling are going up, I doubt they can handle the 25-30% raises in salary, leading to many bloated contracts.

    In summary, cap is going up, player salary is going up, but player salaries are going up by "too much" relative to the cap (that's my bold statement, I have no proof as of yet, we shall see the consequences in a few years).
     
  16. sanityplease

    sanityplease Registered User

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    This, without a cap floor, Atlanta would keep their team. If a team can't afford to spend 48 million, then it should move to a better market. Btw, the average team payroll in 03-04 was 44million.
     
  17. Renbarg

    Renbarg Registered User

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    Well, their contracts are the definition of market value. They are UFAs.

    I think the insane contracts are only a result of high demand (partially as a result of Florida needing to get to the floor) and low supply. When demand goes down next year and supply goes up the salaries will go down for comparable players.

    Actually this is probably a textbook example of a free market at work.
     
    Last edited: Jul 1, 2011
  18. Bear of Bad News

    Bear of Bad News HFBoards Escape Goat

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    Seems pretty good from the players' perspective. When you say "failure", whose perspective are you representing?
     
  19. DracoFulmineus

    DracoFulmineus Out in a storm

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    God forbid. :shakehead
     
  20. Jonas1235

    Jonas1235 Registered User

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    Escrow still comes into play. Yes, the cap floor will be 48 million, but if revenues don't increase this season, then the actual salaries are less.

    Overall, revenue is matching increased costs. So teams really aren't that upset with spending 50 million on salaries when a couple years ago they were paying 40.
     
  21. thenextone

    thenextone Registered User

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    The market did not get inflated. Players who wanted to be overpaid had only one or two destinations this year. Florida was the main one.

    The other teams signed guys for relatively reasonable sums. Players always have a choice...and they can choose big money from franchises like Florida and Columbus that are treading water or goto SJ, Detroit or Chicago which have legitimate teams and a chance at winning.
     
  22. tarheelhockey

    tarheelhockey Highest Boss

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    There are issues with the cap floor, but this isn't one of them.
     
  23. magnet43

    magnet43 Registered User

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    We are also witnessing a step closer through each season to another lockout. The NHL is only hurting itself by raising the salary cap each year. If this is the case, they should've never implemented it in the first place. Having the cap stay constant annually would create greater competition amongst teams and fair value to players.
     
  24. LyNX27

    LyNX27 Registered User

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    Then you never took an econ class. The second they go out on the market again, no matter what they THINK they are worth from their last contracts, what the other teams are willing to pay is actually market price... Seeing as its determined by the market, next time they become FA's they will also be compared against their contracts, and they either accept the ones presented or don't play hockey.
     
  25. sanityplease

    sanityplease Registered User

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    Not sure if you're being sarcastic, or if you think Atlanta should've kept their team..

    If it's the latter, teams should be in the best markets, period. Teams have moved/disbanded/expanded since the beginning of organized sports. It's all about the health/finances of the league.

    To the op, sounds a little like sour grapes as the leafs got nothing today, I remember Burke saying "Our draft will be July 1", sorry that was last year. This year he "vowed to be active in free agency". Then he spends the day overseas & doesn't sign anyone........... Just sayin'
     
    Last edited: Jul 1, 2011

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