Discussion in 'Fugu's Business of Hockey Forum' started by MHA, Jun 5, 2005.
What's wrong with a salary cap and competitive balance. Why is that bad for hockey?
The Problem is that the gap between the top to the bottom is too great both in Team Salary and Profitability ..
The NHL is trying to set the bar so all 30 teams can compete when everyone knows in all sports that is not reasonable .. You always have rebuilding teams and/or injury riddled teams or just poor seasons that effect parity on the ice ..
That sets the bar so low that then the on ice product will suffer as a result in some markets cause more damage then good in some markets.
The NHL should have set a bar for Parity but tried to make it so that 20 teams are relatively close and allow the bottom 1/3 to rebuild or whatever..
If the bar was set for the top 20 spending teams then we could have had a $45 mil Hard Cap (just $2.5 mil more then the $42.5 Final Offer) with those 20 teams in the $35-$45 range for parity and 1/2 a season..
clearly, even before the CBA cloud loomed, goodenow realized that there were going to have to be major changes to realign the economics of the sport. he probably knew it would require a salary cap, just as 2/3 of the 'Big 3' have.
i don't think the brass of the PA is against competitive balance, by definition. it's a nice notion that any team can draft well, sign some free agents and be very competitive, like the NFL. no one likes the evil in baseball that small-market teams not only have zero chance of winning the world series but aren't even going to come close to making the playoffs (pirates, royals, devil rays, etc) solely because of what type of market they're in.
but the function of the players association is to group the players together and try to impose maximum leverage, in order to extend the monies they'd receive. it's not really goodenow's business to see that the league is balanced and perfectly competitive. it's his job to set up the most favorable conditions for his employers (the players) to get the most $$ possible from owners, whether it comes from entry contracts, qualifying offers, arbitration or unrestricted free agency.
and to tie in what i orginally said, the player's association has made major concessions on all those points from the very beginning. the devil is in the details of just how much the players are going to have to conceded. the head of any union is going to be against a cap mandating how much employers can pay their employees because that automatically sets a limit on how much money can be earned.
whether these concepts are right, wrong, unethical is another issue. but that's what it all boils down to.
How does setting the cap so that all 30 teams can spend at least a similar amount hurt competitive balance? I'm a little lost on that one. Some teams will suck because they're managed bad...but that's how sport is supposed to be. Money just ruins it...it strips all the fun out of it. That's why the NFL is so great. All teams if managed well, can afford to sign good players.
ya the nfl is great - tell that to abc - lousy teams by the number - parody sucks -
That's a great post .. and explains the concept of a union in negotiations very well, as to their intent .
Just to add what I think the PA biggest problem is that the CBA has to be GM/OWNER idiot proof at their expense ..
If the NHL said we need a Hard Cap for Parity sake only .. Pick a number $45 mil and then put the responsibilty on each team to manage their budgets and control their spending habits to remain a profitable business.
That prevents big market free spending .. They could even have put a soft cap/luxury tax into that system that goes to Revenue sharing and helps correct market revenues.
If the PA felt such a system provided a market for all the players they would have no problem ..
** IN THEORY ** the model should work like this .... If you have one team at $65 mil and another at $30 mil that is $90 mil total in player wages .. Divide it by 2 and you have $45 mil for each team ..If the Cap was set at $45 then one team is fixed and the goal is to get the other topped up as close to $45 mil as possible (via revenue sharing, competiveness on ice leading to more fans, TV Deal, local sponsors etc ).
The only qualifier is that those numbers should be based on profitability not spending .. Does no good if a team spends $65 but loses $20 mil to do it ..
That is the same thing to the PA in wages and now you have parity, add more teams and continue the process.
Why should good teams with strong management and a dedication to winning be hindered because some owners are either inept or don't want to spend money to win?
why is an "idiot proof" system a bad thing? It simply guarantees the system will work. that's a good thing....anyone that doesn't want an idiot proof system...simply wants teams to spend more than they can afford too...then once that happens they'll say "well, we didn't force the owner to give him the money"...but that still doesn't fix the fact that it hurts the league. So lets put in an idiot proof system then we don't have to worry about it anymore.
There is no "idiot proof system". There will always be holes in an agreement.
what about a team like Edmonton? They're not managed poorly..they're not inept...they simply don't have the revenue stream to spend with detroit and philly etc....should they be left to become a farm team for the "have" teams in the league? I guess that depends on your opinion.
Is it Colorado's/Detroit's/Toronto's fault they don't have the money?
True enough, but they should be limited as much as possible.
No it's not, so you're saying Edmonton should be a farm team for the Detroits of the league?
But they shouldn't be the reason to turn this league upside down. This is just my personal opinion on these things. I just prefer to let the good teams win and have the crappy teams lose without having things to be evened out. Owners that are willing to spend, and that have money shouldn't be penalized because other teams can't afford to do something.
Interesting, my viewpoint couldn't be more opposite. I'm a Flyer fan (see my tag I think turning the league upside down over this issue is not only worthwhile, it's absolutely needed. I think having an even playing field financially so that the sport is all about how teams are managed would make hockey and any sport for that matter 100 times better. But as you say, I guess it's just as personaly preference.
How balanced do you think it will be?
Just go by the rumoured deal for now, since its all we have to go on.
Why do you need 30 teams ??..
Pick your 20 strongest markets and teams and lets play .. Why turn the league upside down for some markets to try to keep others alive ??
Why is that the only option ??
Those remaining teams would have better talent, higher skill level, be more entertaining almost equivalent to the World Cup.
The NHL is one big CYA for Bettman by blaming the players .. The league is so watered down and non-entertaining that poker ratings are double that of hockey on ESPN ..
Tearing down the strong teams for the sake of the weak is counter productive to success IMO .. Good Businessmen use the strengths of profitable ones as their flag ships to carry the rest and remove the biggest bleeders ..
The Bain group that wants to buy the NHL said it would immediately shut down 6-8 teams .. Why do they make that recommendation and Bettman wants to turn the NHL upside down and inside out and build around those very teams that a 4 bil offer would cut out like it was a bad cancer ..
Great post .
Mucho agreed, was gonna say the same thing in my response. Ultimately, the teams unable to compete, should ideally be contracted. The product is way to watered down. Unfortunately, Bettman wouldn't contract some of the teams that need to be because he brought them in, in the first place.
With a cap floor at around 24 and a ceiling at around 37 million I think that would be okay. Certainly much better than the difference between teams like Nashville and Detroit last season. I'm not too sure what the difference was exactly, but it was close to 50 million I think. I just don't see how that would be good for the league.
I don't think it's terrible for the Mike Illitch either, as he will likely make more money under this type of system even with revenue sharing. The game simply starts becoming more about management and less about how much money a team can afford to spend.
Oh, I have no problem with contraction. Heck, I think it's a wondeful idea! Get rid of Nashville, Carolina, Florida etc etc...I totally agree. But don't keep them around and force them to be farm teams. No good/fun comes from that. But if you want to contract them, by all means!
Well look at the NFL, all the teams are relatively equal, but you have the Patriots dynasty happening right now. You will always have those top tier teams no matter what the circumstances are. I'll bet that we still see, Detroit/New Jersey/Colorado and the teams that are upper echalon now, continue to win the cup consistently
You keep mentioning this, who would force them to be farm teams? Something I haven't heard?
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That's fine...the Patriots and Eagles are managed better....therfore they win more...just how sport should be!...that's great!
Aren't you contradicting yourself then?
If the cream consistently rises to the top regardless of financial circumstances, why all this drama about a cap system tearing down the elite? Why do you even care?
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