A combined luxury tax/cap system: use linkage/cost-certainty to determine 'soft' and 'hard' floors and ceilings for team payrolls. No set % of overall revenues dedicated to players.
Here's how it works:
1) Soft floor at 50% of revenues. Soft ceiling at 60% of revenues.
2) Hard floor at 45% of revenues. Hard ceiling at 65% of revenues.
3) Teams spending > their 1/30th share of 60% pay 150% luxury tax on overage amount.
4) Teams spending < their 1/30th share of 50% do not collect a share of the luxury taxes.
5) Teams spending between 50%-60% share luxury taxes equally.
6) Teams cannot spend more than their 1/30th share of 65% hard ceiling.
7) Teams cannot spend less than their 1/30th share of 45% hard floor.
Using projected revenues of $2.032 billion, these means:
1) Soft floor at $33.9 million. Soft ceiling at $40.7 million.
2) Hard floor at $30.5 million. Hard ceiling at $44.0 million.
3) Teams spending between $40.7 and $44.0 pay luxury tax (max tax per team = $5.0m)
4) Teams spendiing between $30.5 and $33.9 don't share luxury tax.
5) Teams spending between $33.9-$40.7 share luxury taxes.
6) Maximum payroll difference is 1/3: $30.5m (min); $44.0m (max).
Basic probability suggests the following outcome:
1) Max. player share is 65%, but only if every team has a payroll of $44.0m (highly unlikely)
2) Min. player share is 45%, but only if every team has a payroll of $30.5m (highly unlikely)
3) 95% probability that player share will be between 48.3% and 61.7% of revenues.
4) 90% probability that player share will be between 50% and 60%.
5) 68% probability that player share will be between 51.7% and 58.3% (most likely scenario).
Thoughts?
Here's how it works:
1) Soft floor at 50% of revenues. Soft ceiling at 60% of revenues.
2) Hard floor at 45% of revenues. Hard ceiling at 65% of revenues.
3) Teams spending > their 1/30th share of 60% pay 150% luxury tax on overage amount.
4) Teams spending < their 1/30th share of 50% do not collect a share of the luxury taxes.
5) Teams spending between 50%-60% share luxury taxes equally.
6) Teams cannot spend more than their 1/30th share of 65% hard ceiling.
7) Teams cannot spend less than their 1/30th share of 45% hard floor.
Using projected revenues of $2.032 billion, these means:
1) Soft floor at $33.9 million. Soft ceiling at $40.7 million.
2) Hard floor at $30.5 million. Hard ceiling at $44.0 million.
3) Teams spending between $40.7 and $44.0 pay luxury tax (max tax per team = $5.0m)
4) Teams spendiing between $30.5 and $33.9 don't share luxury tax.
5) Teams spending between $33.9-$40.7 share luxury taxes.
6) Maximum payroll difference is 1/3: $30.5m (min); $44.0m (max).
Basic probability suggests the following outcome:
1) Max. player share is 65%, but only if every team has a payroll of $44.0m (highly unlikely)
2) Min. player share is 45%, but only if every team has a payroll of $30.5m (highly unlikely)
3) 95% probability that player share will be between 48.3% and 61.7% of revenues.
4) 90% probability that player share will be between 50% and 60%.
5) 68% probability that player share will be between 51.7% and 58.3% (most likely scenario).
Thoughts?
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