Are we witnessing the failure of the cap floor?

magnet43

Registered User
May 1, 2011
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LEAFLAND
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 did nothing today, I remember Burke saying "Our draft will be July 1". Then he spends the day overseas & doesn't sign anyone...... Just sayin'

Better than overpaying for a 3rd or 4th line player. It should be Richards, or noone else for Toronto, unless they offer sheet someone. We don't want him pulling another Komisarek , believe me its fine the way its been.
 

MJB Devils23*

Guest
Watching 3rd liners getting $4-6M cap hits is definitely not a reassuring sign for teams trying to re-sign their star players.
 

Ishdul

Registered User
Jan 20, 2007
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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).
I don't even know how this makes sense. The way the cap works, salaries can not outpace the cap by all that much unless teams at the floor decide to spend closer to the ceiling without teams at the ceiling deciding to spend closer to the floor. I don't see that happening this year. I think the spending in reference to the cap will actually go down this season since a lot of teams kept their salaries clear for a chance at Richards while only one team will get him, without a lot of backup options.

And no, the cap floor is not a failure, it was an absolute necessity of the CBA by the NHLPA. The cap floor is just as important to them as the cap ceiling is to the owners. They don't want teams having a $16 million payroll getting significant revenue sharing while contributing relatively little money to the players and harming the success of their market. Maybe you think that 75% of the cap ceiling being the cap floor is too much, but then the comparables of the NFL (where it was 87.6% of the ceiling) and the NBA (where it was 75%) don't show that, and people weren't complaining about the salary floor percentage when the cap was under $40 million. If you can't be a successful team working off the cap floor then maybe there's a problem with your management, or your market, or something else in the organization.

Watching 3rd liners getting $4-6M cap hits is definitely not a reassuring sign for teams trying to re-sign their star players.
Only Fleischmann, Cole, Laich and Leino got $4 million+ for forwards (all got $4.5 million cap hits, actually). Those are all second line players. All of the defensemen who got $4 million are guaranteed to be in the top 4 of their respective teams, too.

And, keep in mind, there are a ton of players who took obvious discounts to stay with their teams which is part of the reason why many of these teams had so much cap space in the first place.
 

deckercky

Registered User
Oct 27, 2010
9,379
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Watching 3rd liners getting $4-6M cap hits is definitely not a reassuring sign for teams trying to re-sign their star players.

Star player cap hits really haven't increased that much since the lockout. You have the Crosby, Malkin and Ovechkin contracts defining the top of the range, but for the most part 6-7M is what elite players are signed to. That's pretty much the same as contracts coming out of the lockout. Second and third line salaries and #2-4 defencemen salaries are the ones that have ballooned for the most part.
 

JSBach

Registered User
May 1, 2010
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Toronto, Ontario
Well, a lot of the teams who are worrying about the maximum and who have to be careful about their signings are teams likely in playoff contention, barring bad contracts. If I were a player I would take the pay cut for a chance to contend.
 

SteenMachine

Registered User
Oct 19, 2008
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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.

Last I checked teams just loaded up on talent like never before.
LA and Columbus picked up top centers,
Buffalo is piling guys onto the roster,
Colorado added a ton of veterans,
NYI added some serious depth for a change (after getting gems out of guys they got on the rebound or developed at their own pace)
Calgary unloaded a bunch of salary only to turn around and become a player for Richards
Minnesota got a lot stronger offensively
Florida's at least putting together a team that could compete like Carolina, Tampa, etc. (it looked like they were just signing people at random based on who was left yet the team still built chemistry and developed a lot of guys into full time top 6 players / NHLers)

Phoenix seemed to be one of the few teams that lost more than they gained but when the league owns the team they're already the exception.

For once, crappy GMs that sit at the ceiling can't just buy out all of the talent and starve bottom tier teams who are trying to build from within from ever getting veterans and heart and soul competitors.

For once, crappy GMs that sit on the cap floor praying for a franchise draft pick have to actually try hard enough to deserve upper tier UFAs instead of making excuses.
 

sh724

Registered User
Jun 2, 2009
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603
Missouri
If every team spends at the cap ceiling players get 57% of Hockey Related Revenue
If every team spends at the cap floor players get 57% of Hockey Related Revenue

See how that works no matter what individual teams spend the players total salaries will equal 57% of HRR. If total salaries turn out to be higher than 57% of HRR the NHLPA writes the league a check for the difference. To prevent total salaries being lower than 57% of HRR teams make periodic payments to the NHLPA.

Whatever group recieves the check (always turns out to be the PA) divides up the payment based on what every player salary is, it is not an even amount that every player gets.

Teams over paying players or underpaying players in the end makes no difference on a league wide basis on a team by team basis it does matter but that is not relevant to the topic. If a team pays a player thats worth $1 mil a year $5 mil and all other players want and get huge raises than salaries will increase much faster than HRR and the players will have to pay more money to the PA to cover the payments back to the owners so in reality they are not making as much money as their contract states. The opposite is also true with players signing for less than they are worth.

The only failure of the cap floor is it is to high for bottom teams to keep up and be profitable, in a perfect world all teams would be extremely profitable and every one would love the NHL but thats never going to happen so please do not counter me by saying if teams moved to better markets bc there will always be bad markets no matter what its called reality and not a fantasy world. The cap ceiling and floor are determined by adding and subtracting $8 million from the answer to a formula. Regardless of what happens ceiling and floor will always be the same $$$ amount apart. That is the biggest flaw with the current system, instead of a fixed +/- $8 mil it should be +/- a % and not a fixed number
 

Stephen

Moderator
Feb 28, 2002
77,841
51,512
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!

I think Dale Tallon's misuse of cap space has been a pretty blatant example of the cap floor not working, turning middle tier players into overpaid, bloated contracts. If anything, this just places more emphasis on the importance of developing disposable home grown talent on ELCs. All you can afford now are a couple of superstars and a bunch of interchangeable parts consisting of reclamation projects, young players and over the hill veterans.
 

taunting canadian

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Jan 3, 2005
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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!

There's no such thing as "inflating the market" as a whole under the current CBA. Total player compensation in real $ is entirely determined by revenue + the player % of revenue as specified in the CBA. The contract numbers thrown around on days like today mean little - if they "inflate" too high, then salary will be held back from the escrow fund to reduce the total player compensation to their negotiated share of total revenue.

If there are teams that cannot realistically afford to field a roster at the salary floor, then the problem is one (or a combination) of 4 things:

1. The league's revenue sharing program is flawed and the owners need to negotiate amongst themselves to adjust that, giving more revenue sharing to the lower revenue teams.
2. Some teams are located in cities or arenas, or have leases or other arrangements that prevent them from being profitable. In this case, the problem lies with the location or the specific lease arrangements that prevent those teams from making more revenue.
3. The player's % of total revenue really is too high. In this case, the owners are going to have to be very convincing when the next CBA negotiation rolls around, because the players pretty much gave the owners everything they asked for last time around, and aren't likely to be in a giving mood next time around. The owners are going to have to prove that they can't increase revenue sharing to low revenue teams, or that they can't find better locations that can support fielding a roster at the cap floor. If they can't convince the players of that, they'll likely have to be willing to go through another lockout to force the players to lower their percentage of revenue.
4. There's also the possibility that the league simply needs to adjust the cap floor/ceiling, increasing the latter and decreasing the former. This will have no impact on the total player compensation. It may or may not impact nominal player compensation (which is irrelevant) but it might make it possible for some low revenue teams to be profitable, at the cost of decreasing parity. Here, the question is whether it's better to sacrifice league parity, or if the problem is better solved by increasing revenue sharing or finding more profitable locations etc.

What we can be certain of is that the problem won't be because of the nominal contract numbers thrown around on days like today.
 

deckercky

Registered User
Oct 27, 2010
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To address the question asked in the title: No. We're witnessing the failure of a lack of max contract length. Star players are signing longterm contracts with artificially dropped cap hits so as to not hamper their teams, and each year that discount is boosted. Those star players don't come to market which creates this problem with the cap floor. If contract length is restricted, there's more free agents each year, and teams who need to spend money to reach the cap floor have to do so on 2nd and 3rd liners.
 

Kane One

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Feb 6, 2010
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Brooklyn, New NY
To address the question asked in the title: No. We're witnessing the failure of a lack of max contract length. Star players are signing longterm contracts with artificially dropped cap hits so as to not hamper their teams, and each year that discount is boosted. Those star players don't come to market which creates this problem with the cap floor. If contract length is restricted, there's more free agents each year, and teams who need to spend money to reach the cap floor have to do so on 2nd and 3rd liners.

Or we can just make it so that the cap hit would be the actual player salary for each year of the contract, instead of the average salary.
 

Jumbo*

Guest
Maybe just kick the poor teams out and eliminate this silly cap already.
 

guyincognito

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Mar 21, 2007
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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.

Um, linkage. You have increased revenues, you have inflation. Cap and floor are going to go up, that's how it works. Now if most of the revenues are a one-time shot, and the economy suffers, if this CBA is largely rolled over... the cap will stagnate or go down. And then the people who signed these deals will have to live with that.
 

guyincognito

Registered User
Mar 21, 2007
31,300
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To address the question asked in the title: No. We're witnessing the failure of a lack of max contract length. Star players are signing longterm contracts with artificially dropped cap hits so as to not hamper their teams, and each year that discount is boosted. Those star players don't come to market which creates this problem with the cap floor. If contract length is restricted, there's more free agents each year, and teams who need to spend money to reach the cap floor have to do so on 2nd and 3rd liners.

Well, like how the owners have to figure out revenue sharing, this is an issue the PA and the agents have to work on themselves.

These deals just hurt the players through escrow as they are getting paid more than their actual cap value. The more of them there are, without the corresponding increases in revenue, the more that gets witheld out of the escrow pie, which hits everyone equally.
 

Hull Fan

The Future is Now
Mar 21, 2007
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You do realize because of this hugely inflated cap floor over 10 teams will be in the red and truthfully if you opened everyone's books to pure hockey operations that I bet that number is closer to 15. The cap floor is a failure because it forces teams in the red and close to the red to spend money they don't have just to start the season. I'm not saying go back to the days without it but the number should be calculated only with revenues of the bottom 15 teams and were they used that number would be below 40 million (my guess) with a percentage basis as opposed to strict 16 million less than the ceiling.

All this is doing is pushing the league to another lockout because teams can't bleed money forever.
 

Hull Fan

The Future is Now
Mar 21, 2007
6,351
641
Arlington, TX
Maybe just kick the poor teams out and eliminate this silly cap already.

How many teams do you want to kick out? Dallas is in this mess because their owner is a moron and the on ice product isn't as good as it was. You want to dump a successful cup winning franchise because of short term (3 year) owner failure? I promise they lost money for 2 seasons in a row and this year will be three because of the increase in the cap. How is that good for hockey? BTW, they aren't alone. Does the league and its fans really want to go back to a 20 team league?
 

guyincognito

Registered User
Mar 21, 2007
31,300
1
You do realize because of this hugely inflated cap floor over 10 teams will be in the red and truthfully if you opened everyone's books to pure hockey operations that I bet that number is closer to 15. The cap floor is a failure because it forces teams in the red and close to the red to spend money they don't have just to start the season. I'm not saying go back to the days without it but the number should be calculated only with revenues of the bottom 15 teams and were they used that number would be below 40 million (my guess) with a percentage basis as opposed to strict 16 million less than the ceiling.

All this is doing is pushing the league to another lockout because teams can't bleed money forever.

It's not inflated, this is how the system works. And will probably be how it continues to work. The players may lose some pennies on the dollar, but the OWNERS have to figure out their own house in this situation. If they don't want to have legitimate revenue sharing and teams can go into business for themselves on certain things, well then there's going to be issues.

If you deflate the floor, you totally screw up escrow because you have no "set" amount of money (okay, originally it was money, now it's cap space with the whacky deals) that HAS to be spent in a given year. Then the teams you're worried about are just going to be cutting extra checks at the end of the season anyway!
 

sh724

Registered User
Jun 2, 2009
2,823
603
Missouri
You do realize because of this hugely inflated cap floor over 10 teams will be in the red and truthfully if you opened everyone's books to pure hockey operations that I bet that number is closer to 15. The cap floor is a failure because it forces teams in the red and close to the red to spend money they don't have just to start the season. I'm not saying go back to the days without it but the number should be calculated only with revenues of the bottom 15 teams and were they used that number would be below 40 million (my guess) with a percentage basis as opposed to strict 16 million less than the ceiling.

All this is doing is pushing the league to another lockout because teams can't bleed money forever.

What teams do and do not make money is a lot more complicated than just revenue minus expenses. Most team owners either own the building the team plays in or own the operating contract and write themselves a check from the teams account for rent. They split all concession sales, parking, and other revenue streams between the team and the arena even if they are the same entity and other similar tactics to make the teams profitability much lower so taxes would me be much lower. One of the Coyotes biggest expenses was travel expense and the travel company they used was owned by the same guy who owned the team. Also the teams that own their arena or operate the arena generally make quite a bit of money on the arena which they would not be operating if they did not own the hockey team. If you want to determine the real profit to the owner of a NHL team you have to look at the total profit for the operation not just the teams finances and you have to look at how much of the teams 'expenses' are being paid to different branches of the same entity and you have to look at how revenues are divided up among the different branches of the entity. Sports teams profitability is no where near as cut and dry as most people think it is.
 

Haj

#CatsAreComing
Apr 6, 2003
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Arlington, VA
I'm not sure what the big deal is. It seems to me the cap floor is a success. The Panthers were horrendous and unexciting last year, this year they are forced to acquire actual NHL caliber players to field a competitive team. The Panthers are also buy time for their prospects to develop. It usually takes 3-4 years for a draft pick to be ready to play in the NHL. No current Florida prospect should be in the NHL. Even Gudbranson could withstand another year in juniors and one year in the AHL.

The Panthers placed themselves in position to have enough cap space to sign players that will improve their roster. They must overpay players to because a discount based on playoff success is not likely. No first line players have signed with team.

The efficacy of these signings will be judged by the performance of the players relative to their contract, which happens regardless of CBA structure of the NHL. Teams that have star players that take up more cap space do not have room to sign these middle aged complimentary players for what they are now worth in the free agent market.


Charging Tallon with "artficially inflating the cost of 2nd/3rd line players" is ********. The cost of a player is what the market is willing to bear. The value of a player is judged by performance relative to cost.

We are witnessing a fundamental shift in the UFA market. The salary floor will force substandard teams to spend money to improve. Therefore, some free agents will be "overpaid." Some will meet expectations and some will not..as with any roster transaction. Since talented teams will focus on utilizing their cap space to sign star players, the salary floor will force complimentary players to become free agents. UFA status now means these 2nd/3rd line players can sign a bigger contract with a franchise that is not as successful.

That being said, this magnitude of "overpaid" UFA signings will only occur during years where one team has a significant ratio of cap space/roster spots relative to other teams. Florida won't be signing many free agents next year, it will be another team that clears cap space and roster spots.
 
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Flames Fanatic

Mediocre
Aug 14, 2008
13,329
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People need to realize something. The cap has gone up nearly 50% from where it was 6 years ago. Would it not make sense that the salaries of players go along accordingly? All of this "x player is overpaid" isn't even close to true half the time simply because people are refusing to realize that this isn't 06 and a 4 million dollar contract isn't 10% of a team's cap space anymore.
 

IceDogsandLeafs

Registered User
Dec 10, 2010
714
0
Niagara Falls, ON
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!

I was pondering the same question this afternoon. It is bad to over inflate the market just so a certain beach team could meet the requirement.
 

Burningblades

Registered User
Apr 13, 2010
651
0
one problem is when the salary cap was first implemented the mid point is decided by revenue then it goes up and down by 8 million on each side,
with a 39 million salary cap 8 mil is 20.5% but on a 64 million salary cap it is only 12.5%. If it was always a 20% deviation the salary floor would be 38.4 million and not 48 million which would be way more manageable.
 

thestonedkoala

Going Dark
Aug 27, 2004
28,169
1,600
And a lot of them were in the name of a certain Eastern Conference team struggling to meet the cap floor.

Let's see:

Florida:
Tomas Kopecky - 4/12 -3 million
Jose Theodore - 2/3 - 1.5 million
Scottie Upshall - 4/14 - 3.5 million
Ed Jovanovski - 4/16.5 - 4.125 million
Marcel Goc - 3/5.1 - 1.7 million
Tomas Fleischmann - 4/18 - 4.5 million
Sean Bergenheim - 4/11 - 2.75 million

COMPARED TO

Buffalo:
Christian Ehrhoff - 10/40 - 4 million
Cody McCormick - 3/36- 1.2 million
Ville Leino - 6/27 - 4.5 million

Montreal -
Hal Gill - 1/2.25 - 2.25 million
Mathieu Darche - 1/700K - 700K
Andrei Markov - 3/17.25 -5.75 million
Peter Budaj - 2/2.3 - 1.15 million
Erik Cole - 4/18 - 4.5 million

Edmonton-
Ben Eager - 3/3.3 - 1.1 million
Darcy Hordichuk - 1/800K - 800K
Cam Barker - 1/2.25 - 2.25 million
Eric Belanger - 3/5.25 - 1.75 million

Washington
Dany Sabourin - 1/525K - 525K
Brooks Laich - 6/27 - 4.5 million
Jeff Halpern - 1/825K - 825K
Joel Ward- 4/12- 3 million
Roman Hamrilik - 2/7 - 3.5 million

Which Eastern Conference team would that be? Washington? Buffalo? Montreal? Or how about the Western conference team of Edmonton?

This is nothing more than 'Sunbelt hockey' bashing under a different guise.

Teams like Washington, Montreal were throwing money around like a bachelor at his own strip party.

3 million for Ward? 4 million for Cole? 4.5 for Leino?
 

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