CBA Proposal

Discussion in 'Fugu's Business of Hockey Forum' started by joechip, Oct 25, 2004.

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  1. joechip

    joechip Registered User

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    In all this talk about the CBA... here are some of my thoughts:

    In specific I'm trying to address a couple of things I see as damaging to the competition in the NHL:
    -- Owners using non-hockey money (other businesses) to buy themselves a winner.
    -- Unequal local resources such as population base, local taxing burdens, etc.

    IMO, there needs to be a budgeting process in place at the start of each season that is based on the previous season's revenue that seeks to provide a baseline amount for the franchise to field a decent team. Then, during the season as things change (attendance rises/falls, performance bonuses kick in, playoffs made or not) there is sufficient wiggle-room to adjust a team's budget accordingly without too much penalty.
    The free spenders will still spend freely, they'll just do it at levels that are somewhat lower than today.
    Comments are certainly welcome.

    1) Significant revenue sharing among the teams.
    -- The total of which should cover 60-75% of the "Salary Cap," defined in Point #2.
    -- There needs to be an equalization of resources to create a baseline competitiveness amongst all teams.
    -- Creates a budget for the NHL.
    2) "Salary Cap" -- Unpenalized Player Salaries less than X% of League Revenues/30, where X is between 50-60%.
    -- Will grow and shrink as NHL Revenues do.
    -- Creates a budget for the individual teams.
    3) Luxury tax, Progressively steeper:
    for every $5 million over the level set in point #2 the tax would be:
    25% on the 1st $5mill (up to $1.25 million in taxes)
    40% on the 2nd $5mill (up to $3.25 million in taxes)
    55% on the 3rd $5mill (up to $6.00 million in taxes)
    70% on the 4th $5mill (up to $9.50 million in taxes)
    85% on the 5th $5mill (up to $13.75 million in taxes)
    100% on all other money spent on salaries.

    -- Luxury Tax money would be counted as part of the Revenue Sharing pool, which all teams that qualify would parkate of, including the team that paid the tax (in effect a small (3.3%) rebate)
    -- Still allows for teams to spend to 'win now' but has the long term consequence of making their future opponents stronger.
    4) A minimum total team salary based on the amount of the Revenue Sharing Pool (~90%).
    -- Ensures that no owner absconds with their RS pool
    -- Protects the players.
    -- Luxury Tax feeds this as well.
    5) Two-Way Arbitration or in lieu of any arbitration... Non-guaranteed contracts are the norm.
    -- Guaranteed Contracts, for example, are still negotiable on an individual basis.
    6) Lower UFA age, 27 or 28, but Restricted FA's are qualified at 50% of current salary.
    -- Qualifying offer's primary job is protecting the team's development costs
    -- Should not be a player welfare system, as the current 10% raise is.
    -- Gives the drafting team 9-10 yrs. of service from draftees.
    -- Allows players to maximize their return while in the prime of their careers.
    -- Restricted FA is still quite lucrative.
    -- No more Group V FA is needed.
    7) Performance Bonuses paid are considered to be a part of the Total Salary and subject to luxury tax.
    -- No limit on bonuses.
    -- Only counted against LT if paid.
    -- Counted against Luxury Tax on a Pro-Rata basis in the case of a trade.
    8) Move Trade Dealine Back to Late February (After 42-45 games played {60-65%}).
    9) 72 game Season. Eliminate Inter-Conference Play, Realign From NE to SW, to equalize travel costs.
    Conference #1: NYI, NJD, Pit, Phi, Was, Nsh, Clb, Car, Atl, TB, Fl, Stl, Dal, Phx, Col)
    Conference #2: Bos, Buf, Mon, Tor, Ott, Det, NYR, Chi, Min, Edm, Cal, Van, LA, SJ, Ana)

    -- All Canadian Teams in the same conference, all original 6 in same conference.
    -- Rekindle old rivalries... lose others.
    10) Move the nets back 2 feet and widen the blue lines to 3 feet.
    -- Do not remove red line.
    11) Remove the point for the overtime loss, still play 4 on 4 in OT.

    Let's plug in some numbers:

    IF

    NHL Revenue = $1.5 Billion or $50 million Mean Team Revenue
    'Salary Cap' = 60% of $1.5 bill/30 = $30 million
    'Revenue Sharing Pool' = 60% of $30 million = $18 million
    -- RSP equals 36% of Mean Team Revenue.
    'Salary Floor' = $16.2 million
    1 - $35 million payroll will generate $41.7K/team in Revenue Sharing
    1 - $40 million payroll will generate $108k/team in RS
    1 - $45 million payroll will generate $200k/Team in RS
    1 - $50 million payroll will generate $317k/team in RS

    The point of the Luxury tax is to leave intact the owners who want to use non-hockey revenue (I.e. revenue
    from other businesses... Little Caeser's, Wal-Mart, Cablevision, etc.) to fund their hockey operations.
    The players should benefit from this and the owners who want to do so still can while at the same time
    strengthening the bottom line of their competitors, who are freer to upgrade their scouting or training depts,
    for example.

    Point #5: 2-way arbitration or allowing for non-guaranteed contracts.
    -- It's important that a guaranteed contract should be bargained for individually, and it rewards those players that are diligent and show up night in/night out, year in/year out by not having to bargain under the auspice of the 'guarantee' if they don't want to.
    -- This along with the much lower UFA age should ensure the players getting the most out of their careers.

    Things I don't know enough about to make proposals for:

    Rookie Salaries... Personally, I don't think there should be a 'rookie cap' but
    Waiver requirements

    Well.... comments?

    Ta,
     
  2. Guest

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    I see a number of holes in the arguement, and some stuff is just too difficult to discuss when you factor what both sides want. It's worth a shot, and at least you've thought about it.
     
  3. thinkwild

    thinkwild Veni Vidi Toga

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    I think one problem is that fans think you can still buy a winner. I dont believe this is the case. So a lot of solutions try and find a way to prevent you from trying to buy a winner. When it is so hard to do, I dont think it really needs to be prevented.

    It is a bit interesting that we talk of them using non-hockey revenue. I think it is always hockey revenue they use.

    Better than preventing spending, neuter its effectiveness. Like make the only players available for purchase over 32 yrs old or something.

    The minute you start proposing a salary floor, ya hafta think you have a pretty screwy system.
     
  4. Onion Boy

    Onion Boy Registered User

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    Even though this has nothing to do with your overall proposal, how can you split up COL/DET and NYR/NYI into difference conferences and then eliminate inter-conference play?
     
  5. coolguy21415

    coolguy21415 Registered User

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    Though I agree with what you're trying to get across, the NHL (to an extent) did the same thing by moving Detroit to the Western Conference(was that in 1994?), thus effectively eliminating Detroit/Toronto games and playoff matchups. As posted above, the conference realignment doesn't make a whole lot of sense, but it's a starting point.

    The proposal overall I think has some good points, and some that need to be reworked. I'm not going to go into the fruitlessness of the effort, but it's an entertaining read, so I thank you for putting in the time. :)
     
  6. joechip

    joechip Registered User

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    GC,

    The Salary Cap as proposed above is just the level at which the Luxury Tax begins to kick in. It is not a line in the sand saying "thou shalt not," it is, however, saying, "if thou dost, then pay to do so." I am certainly open to changing the rate increases from every 5 Mill to every 3 mill.

    The reason the LT is set the way it is is as follows:
    1)The percentage of revenues set by the "Cap" may be too low, therefore exceeding the cap by a small amount may still be very profitable.
    2) By funnelling the money back into the RS Pool, the effects of the LT are offset if 'everyone's doing it.' Net neutral effect.
    3) This system should encourage lower base salaries with expanded 'performance bonuses.' B/C there should be a positive correlation between revenue and team performance. This should hedge the risk of signing 'star players' if they don't perform.

    For example, if by some miracle the Sabres retain Miro Satan for 2005, and instead of signing him for $5 mil, they sign him to $3 mil with $2.5 mil in bonuses, the first 2 LT rates make this a profitable venture for the Sabres (especially if making the playoffs is one of the bonus conditions). Conversely, if Miro has another season like 2003-04 then the Sabres are good relative to their budget/'cap'/RS Pool.

    Arbitration: I'll accept your idea as a 'friendly amendment.'

    Qualify the RFA at 100% current salary or file for arbitration. V.V. good idea.

    The Trade Deadline: I don't wnat it moved back for salary dump purposes. I want it moved for team unity/chemistry purposes. Teams should make personnel decisions prior to being mathematically-eliminated from playoff contention. The deadline where it is now is terribly disruptive to the locker rooms for the teams 'on the bubble.'

    I'll address re-alignment in another post.

    Thanks for your comments. I think it's worthwhile to not just complain that there isn't hockey but to try and understand what is really at stake, and until you think about putting one of these together it's difficult to imagine.

    Ta,
     
  7. joechip

    joechip Registered User

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    You're welcome. :bow:

    Now, back to specifics. This was a first guess at re-aligning the league to try and equalize travel costs and put all 6 Canadian Teams in the same conference. You could go with a geographically scatter-shot approach.

    But, frankly, I grew up a big baseball fan (am no longer) and I think the tension created by the World Series format is still the best. The conferences IMO should play isolated from each other, develop their own style of play, and then we get to see which one works best during the SCF.

    Yeah, this is pretty fruitless, but then again, there ain't no hockey being played either. At least this discussion is better than the name-calling going on in the NHLPA vs. NHL threads.

    Ta,
     
  8. joechip

    joechip Registered User

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    Splitting the NYI and the NYR is a mistake. One easily rectified, just swap the Devils for the Rangers. Det/Col I just don't see as that big a rivalry anymore. ESPN works hard to keep it alive, but with the amount of turnover on both teams it's pretty lukewarm, honestly. the Isles/Rangers thing is wholly a fan-driven phenomenon and one that should continue until everyone's dead. ;)

    Ta,
     
  9. joechip

    joechip Registered User

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    GC,

    As far as the 72 game season is concerned. For the owners it should be revenue neutral. The buildings are less than full, and fewer games and stronger rivalries should bring more casual fans to individual games thereby increasing attendance per game. Also, the quality of each game should be higher, as the players have more rest/practice.

    Here's a quick breakdown on the proposed re-alignment:

    Conf #1:

    East Cent West
    NYI NSH CLB
    NYR ATL STL
    PIT CAR DAL
    PHI TB PHX
    WAS FL COL

    Conf #2:

    East Cent West
    BOS DET CAL
    BUF MIN VAN
    MON CHI SJS
    NJD EDM ANA
    TOR OTT LAK

    Home Division Play: 8 times each per year
    Other Division Play: 4 times each per year

    It looks an awful lot like the NFL doesn't it. It's really not that weird.

    Also, there's always the possibility of play 2 game homestands between the east and the west teams (to cut down on expenses and create localized tension).

    How about this:
    In each conference there is a situation where the weaker draw (or smaller market) will benefit from the division re-alignment in having their barns packed with the rivals fans:

    Tor vs. Buf
    Det vs. Ott
    Phi vs. Pit
    NYR vs. NYI

    Having those teams show up 4 times a year as opposed to twice will be a big boost.

    Ta,
     
  10. wilka91*

    wilka91* Registered User

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    My proposal is simply to cut all the salaries by half!
     
  11. Guest

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    If you are going to mix up the conferences that much, I liken it to my proposal of splitting the league into two leagues MLB style or splitting them into two conferences what have you. You split the top 14 spending teams, the guys most likely to oppose a cap or be able to sustain a higher payroll, and then the other 16 teams would go to a capped league. The 14 spenders would have a salary floor, while the 16 "small market" teams would get a salary cap. Then you would see a big mixup like this with the standings. I like that proposal in a weird way because I think it puts teams in the right places. It allows the spenders to keep spending as they wish, and it allows the smaller market teams to compete among their peers. Then you run the playoffs with each league's champ squaring off for the Cup. NHL should win with increased ratings with more emphasis, and longer lasting, on the bigger market teams. As an example of last year, you probably would have seen a Philly-Detroit final in the spender league, with the Calgary-Tampa Bay final in the cap league. Then a strong Tampa Bay-PHI/DET final to top it all off. Everyone wins.
     
  12. joechip

    joechip Registered User

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    The problem as I see that (aside from the obvious) is that how do you deal with ownership changes, or less drastic, attitude changes within ownership? What if tomorrow Mike Illitch decides he doesn't want to spend insane cash on the Red Wings?

    Basing a a pair of leagues strictly on how much/little that can spend is academically interesting but of little actual value. The same dynamic can play itself out without such a drastic restructuring.

    ta,
     
  13. Guest

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    I disagree. How do you propose that the same dynamic can play itself out without the restructuring?

    There is flexibility within the setup to where teams could jump back and forth between the sides. If teams made a request for one, but also the highest spending capped teams could jump up if they desired or required, to perhaps keep their team intact, and the lowest spenders of the non-cap could drop down to the capped league where they may be more competitive with a lesser payroll.

    The way I look at it, you group the teams amongst their peers. You're not just taking all the best teams for one league and the rest in the other, you are taking the teams in big enough markets that they can afford to spend more than the smaller markets. There has to be flexibility in any setup, and this would allow for growing or shrinking markets.

    Generally the biggest spenders are the biggest markets, so that could generate more interest focusing specifically on those teams. If you split the sides like I proposed, 14 for spenders, 16 for cap, then you get 8 playoff teams from each side. Theoritically, you would see an increased participation in the playoffs from the bigger market teams, which could draw more interest in the sport. You might see some of the Rangers or Blackhawks teams making the playoffs, which might generate more interest from those respective markets in television ratings, etc. If you are generating more interest, then those people might also pick up on the cap side and it carries over. On the cap side, you get teams who aren't competiting with bloated payrolls, so some teams that might normally fall to the big guns advance further and generate more interest due to their playoff runs. As an example, if the Predators hadn't faced the Wings last year, and maybe Edmonton instead, that would have saw one of those two young teams advance which would have helped support either team. As it is, about 1 Cinderella team makes it past the first round, 2 if it's a fluke.

    A big part of it is who you consider the spenders and who you consider the cappers.
     
  14. Guest

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    My proposal might also change the style of the game, as the stacked rosters mostly consist of the spenders. Many of the non-stacked rosters fill their players with defensive guys just to compete with the talented players. If they rarely faced these talented players, the need for the defensive specialists might also decrease a level, and you might see more opportunities given to borderline offensive prospects to help in that area.

    If you look at the start of last season, here is how the payrolls rolled out.

    Detroit Red Wings $ 77,856,109**
    **New York Rangers $ 76,488,716**
    **Dallas Stars $ 68,578,885**
    **Philadelphia Flyers $ 68,175,247**
    **Colorado Avalanche $ 63,382,458**
    **Toronto Maple Leafs $ 62,458,140**
    **St. Louis Blues $ 61,675,000**
    **Los Angeles Kings $ 53,833,800**
    **Anaheim Mighty Ducks $ 53,296,750**
    **Washington Capitals $ 50,895,750**
    **New Jersey Devils $ 48,931,658**
    **Boston Bruins $ 46,569,000**
    **Vancouver Canucks $ 42,074,500**
    **New York Islanders $ 40,865,500**

    **Ottawa Senators $ 39,590,000**
    **Phoenix Coyotes $ 39,249,750**
    **Montreal Canadiens $ 38,857,000**
    **Calgary Flames $ 36,402,575**
    **Carolina Hurricanes $ 35,908,738**
    **San Jose Sharks $ 34,455,000**
    **Tampa Bay Lightning $ 34,065,379**
    **Columbus Blue Jackets $ 34,000,000**
    **Edmonton Oilers $ 33,375,000**
    **Buffalo Sabres $ 32,954,250**
    **Chicago Blackhawks $ 30,867,502**
    **Atlanta Thrashers $ 28,547,500**
    **Minnesota Wild $ 27,200,500**
    **Florida Panthers $ 26,127,500**
    **Pittsburgh Penguins $ 23,400,000**
    **Nashville Predators $ 21,932,500**

    10 out of the 14 teams with the highest payroll to start the season made the playoffs. 6 out of 16 teams who would be in the cap league made the playoffs.

    Theoritically, you would have seen Detroit, Dallas, Colorado, and Vancouver for the spenders west. Philly, Toronto, New Jersey and Boston in the spenders east. Calgary, San Jose, Nashville and Edmonton would have made the playoffs for the capped west. Ottawa, Montreal, Tampa Bay, and Buffalo would have made it for the capped east. St. Louis would have conceded their playoff spot to Edmonton, and the Islanders would have conceded their spot to the Sabres.

    First round matchups of DET-DAL, COL-VAN, BOS-NJ, TOR-PHI, SJ-EDM, NSH-CGY, TB-BUF, OTT-MTL. Second round matchups of DET-COL, PHI-BOS, SJ-CGY, OTT-TB? Third round matchups of DET-PHI, SJ-TB? Cup Finals of TB-DET/PHI?

    It's a small tweak, but it makes a difference I think.
     
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