Thanks Mercurial. That's a really tough thing for the PA, I think. And, the problem is made worse by the lockout - it's likely that revenues may even go down next year if there is a next year. Then that annuity keeps growing.
I can see the players' point here.
I just can't see an easy way around the impasse....
The player's don't have a point here. Maybe if their union had bothered to actually calculate the ramifications of their own offer they would.
Here is the problem: if you employ some sort of abstract thought to '50/50', you can come up with all sorts of conclusions, like 'oh it comes out of the player share so it must be bad'. Although that idea is completely and utterly wrong.
Assume flat revenue growth year 1 ($3.2B):
NHL 50/50:
$1.6B each
Vs NHLPA 13% off top: $425M
Remaining Revenue (87%): $2.8B
NHLPA 50/50:
$1.4B each
Actual NHLPA share: $1.4B+$425M = $1.8B = 57%
Note that the share for the NHLPA 50/50 is $200M less than the NHL one.
Ok, so now what's the cap?
NHL: $1.6B/30 teams = median cap = $54M +/- 8M = $46-62M
NHLPA: $1.4B/30 teams = median = $47M +/- 8M = $39-54M
Capgeek LA Kings total cap salary: $62M * 0.87 = $54M So under both proposals this is the amount that needs to fit under the cap. The difference is that the excess 13% is skimmed off the top by the NHLPA, versus being deferred by the NHL. Both proposals pay the face value of the contract.
Notice that the Kings DO NOT fit under the NHLPA cap EVEN after skimming 13% off the top. In the NHL version, they retain 8M in cap space (versus 7M under the old CBA).
Year 2, 5% revenue growth, $3.4B revenue. I used the LA Kings TOTAL deferred monies from Year 1 in this calculation. I also removed the UFA contracts, so the 13% skimmed off the top is ONLY remaining contracts. Otherwise the cap hit would still be $54M ($11M of UFA contracts were freed up).
NHL cap: $49-$65M
NHL cap SPACE: $65M-$43M = $22M - $5M(deferred) =
$17M
NHLPA cap: $41-$57M
NHLPA cap SPACE: $57M-$43M =
$14M
So under the NHL proposal, the kings have $3M of extra money to sign their 9 UFA's plus incoming players, minus anyone who retires.
The NHL 50/50 pays out face value just like the NHLPA 50/50, and it is BETTER for UFA's than the NHLPA 50/50.
The problem with the NHLPA 50/50 is that although it pays face value, it just barely pays them. The actual cap is only 50% of 87% = 43.5%. So for example, if you skim 13% off the teams salary cap from capgeek, you get a median of $53M and average of $52M.
The NHL median for year one is $54M and the NHLPA median is $50M. So under no measure does the NHLPA proposal work with the existing salary structure.