did the NHL grossly miscalculate?

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kdb209

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Jan 26, 2005
14,870
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canucks666 said:
Something a lot of people don't know is that the cap isn't 39 million dollars.

The cap is somewhere between 30-35 million (somebody tell me the exact figure so i don't look like a tard) THis was calculated based on the figure of 54% of the "predicted" total league revenue, divided by 30 teams.

It's just that this cap has flexibility - and teams are allowed to spend something like 4-5 million dollars above the cap (up to 39), and the same amount below it. That sets the minimum and the maximum payroll.

But the assumption behind this CBA seemed to have been that over 30 teams the payrolls will average to the mid-point. Some teams will spend close to the maximum. Some will spend close to the minimum and it will all average out.

But that's not how it seems to happen. As far as I see it only <5 teams are actually planning on spending close to the minimum. Every other team has decided that 39 is the cap and are spending close to it. And the salaries that the market established seem to be following the same trend. SURE a lot of teams are saying they plan to be a few milion dollars under the cap once it's all said and done but they're still all over the midpoint!

Once you sum up the total salaries for all 30 teams it seems like it's much larger than the 54% of total league revenue - that is even IF the league meets their expectations which some say are kind of optimistic.

Then what happens? Do the players get screwed? Do the owners? Or will they both find a way to screw us fans again...
And the per team average before the 54% limit kicks in and players start losing their escrow money is actually lower than people think.

Based on the league estimate of $1.7B, the 54% gives an average team player costs of $30.6M, but since the total player costs in that 54% number also includes player benefits (~$2.2M per team), all league paid out bonus money, salaries of injury replacement players who don't count against the team caps, and probably more monies that we don't yet know of, the per team average salary is less than $28.4M.

Based on the team spending we're seeing now, I think it is safe to say that unless revenues significantly exceed the estimates (unlikely) the players will be giving back a chunk of their salaries through escrow.

But the big spenders don't necessarily benefit that much from the escrow rebates. First, a chunk of the escrow returned to the league is used for part of the league's Revenue Sharing plan, and then the rest is split 30 ways.

You can find more details on setting the cap limits and revnue sharing in this thread:

http://www.hfboards.com/showthread.php?t=162356
 
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