Brooks-NHLPA wants to reduce the cap

Discussion in 'The Business of Hockey' started by RangerBoy, Jan 22, 2006.

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  1. RangerBoy


    Mar 3, 2002
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    New York
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    to save on the escrow

    Mark Brender of THN wrote about this topic last month but I thought there was no way the NHLPA would accept a lower cap :shakehead

    In the first 5 months of an agreement,the players want to change the agreement because they don't to pay into an escrow account :shakehead

    Hockey players are not very bright.An entire season was pissed away because they first wouldn't consider a cap and then wanted a $49 million cap and now want to lower the cap after getting a $16 million gap instead of the NHL's $10 million gap

    They drink the kool aid and it ruins their judgement
  2. Fugu

    Fugu Guest

    I don't think it is as easy as you make it out to be. Even if the players were "educated" on the escrow- and I'm certain their agents are fully versed- they have no control over what every individual contract ends up being, collectively speaking.

    So every agent and every player has an interest to get the maximum they can from a club. If every club has a payroll above the midpoint of the cap, all that money goes back to the clubs.

    There is no escrow is if (a) they all spend to the midpoint, or (b) the average of all 30 is the midpoint. If the average of the clubs' spending was below the midpoint, the players would get money from the clubs. That will never happen because teams will compete for talent, and the more aggressive will be tempted to spend to the maximum. Additionally, the cap has an automatic 5% increase built in, so if revenues aren't keeping up, realistically that money goes back to the clubs.

    Tightening the band is really the only way the NHLPA can get a more realistic payroll system (based on their maximum take at 54% of revenues). Players will still get 54% of league revenues, but there is less chance for teams to collectively exceed the midpoint (the "magnet effect").
  3. Fugu

    Fugu Guest

    One more thing...

    I know that those opposed to the NHLPA's move to lower the band believe this ultimately hurts the NHLPA. There is a case to be made because if most teams do spend more than the median, it shows that they are both able and willing to spend more. This would imply that 54% linkage is too low. Maybe the NHLPA should have tried this tack first, but....

    On the other hand, there are still a handful of teams that can barely get up to today's median value. The revenue gap remains too broad and absent significant revenue sharing, will not go away anytime soon.
  4. GKJ

    GKJ Global Moderator

    Feb 27, 2002
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    The teams who are viable should be allowed to spend up to whatever the cap number is. If the teams still can't keep up then their owners are in the wrong business and should be asked to sell the team. This would just be their fault, plain and simple. The big money owners will leave them in the dust, especially for dragging them into the lockout. Bettman did what they wanted, it's up to them to hold up their end of the deal.
  5. Fugu

    Fugu Guest

    I agree with you. However this does go back to the "lowest common denominator" argument. How was 54% picked as the number? And if the majority of teams can and will spend more, somebody was crying wolf...or pulling the wool over our eyes (to keep the sheep theme going). :)

    I still believe the most critical problem was the revenue gap between teams. Even though this CBA seems to fix this, in reality it is pushing the cap back up because the weight of total revenues is making it go in that direction. Linkage is a double-edged sword.

    The escrow system does insure that the players only get the declared percentage (54% for now), but it does not address the fundamental problem if you are a small market team....dragged onwards and upwards with total league revenues.

    I think I've decided now- after responding to your coment - that the NHLPA is again making a critical mistake by treating the symptom and not the cause. Whatever one's opinion of Goodenow was, I don't think he would miss this one....
  6. jamiebez

    jamiebez Registered User

    Apr 5, 2005
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    I agree wholeheartedly. Absense of legitimate revenue sharing (such as gate sharing) will continue to make it more difficult for the smaller revenue clubs to keep pace as the big revenue teams bring in the big dough.

    Could we be seeing resentment on both the owners and players sides with this new system in the years to come?
  7. Drury_Sakic

    Drury_Sakic Registered User

    Jul 25, 2003
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    Maybe its just me, but I honestly don't see a big problem with the current gap between clubs payrolls.

    I will admit it was a problem before, but now?

    Foote and Fedorov to the Jackets? Palfy and Gonchar to Pit? Kariya to the Preds? Selanne and Nieds to the Ducks(not a small market really, but a lesser hockey club)? All the canadian hockey markets viable and playoff contending, if not leading? Tampa Bay spending to the limit? Florida talented? Caronlina is the best team in the league?


    What more do you want?

    Granted, the cap will increase this summer, but I have a hard time seeing the cap over the life of the CBA ever toping 50 million, which is still 10-15 million lower than the 5-8 teams over the last 3-4 years that broke the small clubs banks. If an NHL team cannot mantain a payroll of 28-30 million(unless it is rebuilding) it's owners ability to run the team need to be questioned. Is that still a bit to high(the payroll gap), maybe, but clubs will have to be careful about hiting that high with their payroll as the cap could come crashing down on them the higher it goes, thus teams will be wary of going that high or face the risk of being crushed under it if it drops. And thats to say it ever gets that high.

    Owners that have the financing and the ability to create hockey markets(Denver/Dallas) should be able to use that to their advantage. Likewise, owners who are in natural hockey markets(Chicago, NY, Toronto) should be able to take advantage.

    The cap made the difference less, and thats all that IMO needed to be done.

    A few winning seasons in Pit(hell maybe even a deep playoff run this year) would have gone a long way towards getting a new rink and higher revenues, potentially sparking a dynasty there. And they had the money to do that too this summer....but what happened?

    Rather than going and getting a guy like Adam Foote to lead the blueline, they went out and blew chucks of money towards Gonchar. Then they tossed the cash towards T-bone and Leclair that could have been used to maybe get both Gonchar and Foote and threw their young goalie under the bus. Add to that they expected a new first time NHL coach to lead this team of rookies and former all-stars who had never played together to the promised land.

    Thats bad managment/coaching, not the lack of money/revenue kicking in.

  8. Fugu

    Fugu Guest

    The floor would be $31.55 million, midpoint $36.55 mil, and ceiling at $41.55 mil. (Think back to the first NHL offer of a hard cap at $31 million-- I know, just a negotiation tactic). Now Bettman has allegedly approved a proposal the NHLPA is putting forth to its constituency where the least amount a team could spend is $31.55 million? The weakest teams will have to come up with another $5-10 million to spend on players, but there will be less escrow money to spread around since the big spenders will be limited.

    Oh yes, that $31 million cap proposal was off of a post-lockout adjusted total NHL revenue of $2.3 billion.... and the current proposals are projecting revenues at $2.0 billion. :help:
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