GM's have already gone over budget for 2005

Discussion in 'Fugu's Business of Hockey Forum' started by Captain Ron, Aug 24, 2005.

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  1. Captain Ron

    Captain Ron Registered User

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    Just going through the disclosed salaries on TSN.com and have come up with about $886 million in player salaries. Add in about $60 million for player benefits and you have a grand total of $946 million.

    With that figure player costs would be 55.6% of the $1.7 billion revenue projections. This player cost figure also has not taken into account unsigned RFA's and undisclosed contracts. With these added in the player costs could easily reach $1 billion this season.

    Yes I know that there is an escrow account and that the 54% figure will be achieved. The purpose of this post is to show how GM's still cannot keep there spending under control. Even in the new era NHL.
     
  2. futurcorerock

    futurcorerock Registered User

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    Actually, I'm going to disagree.

    Look at the amount of talent that was on the market, a lot of teams changed bigtime... you basically had two free agency periods rolled into one. Some GM's overpaid, but guess what? There can only be 16 playoff-bound teams this offseason, and atleast one big spender this offseason won't make the playoffs...

    There's a salary cap thrown in there too for good effect. I'd call this a funk year for the CBA, given the irregularity of the times... let's take a look at the NHL in 06-07 to consider all the operating points of the CBA
     
  3. Captain Ron

    Captain Ron Registered User

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    What are you disagreeing with?

    The fact that the league has already gone over the budget for player salaries.

    Or that I think GM's cannot control their spending habits.
     
  4. Crazy_Ike

    Crazy_Ike Cookin' with fire.

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    It's not up to the GMs to worry about the league wide salary number. Their responsibility is their own team, and the "budget" is some number up to ~39 million. By that standard, not only have no GMs gone over budget this year, it isn't even possible for them to do so now.

    This situation was accounted for in the CBA by the escrow, and therefore claims that they "can't control their spending" with this offseason as evidence are bogus. The 39 million is the control, and it appears to be working quite well, thank you.
     
  5. futurcorerock

    futurcorerock Registered User

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    Meh, my bad for not specifying.

    I disagree with shining a light on the numbers at this point in the history of the CBA.

    It's a really funky year.

    EDIT: 2,000 baybee :yo:
     
    Last edited: Aug 25, 2005
  6. Captain Ron

    Captain Ron Registered User

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    That is the same mentallity that got the league into trouble in the first place. One GM's bad signing can spread through the league like a virus. Look at what the LeCavalier contract has been doing.



    Just because the escrow account was put in place to act as a "safety net" does not excuse bad decisions. That is like saying that everybody should be able to drive as fast as they want because there are seat belts to protect people from serious injuries and car insurance to cover damages.
     
  7. Captain Ron

    Captain Ron Registered User

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    I am just shining a light on the numbers because before the free agency period began alot of people were under the impression that the league would spend significantly less on salaries this year. That does not seem to be the case.
     
  8. TehDoak

    TehDoak He sure has a

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    This spending spree is going to hurt the players in the long run. If the cap comes down next season to lets say, 37 million. With the age of free agency going down, your going to see more UFAs on the market, with less buyers. Less bidding=lower salaries. So the unactive teams (Buffalo, San Jose, Dallas, Carolina, Washington, hell, even Detroit and the NYR) will be able to pick up players cheaply at key positions, while everyone else is frantically trying to renogiate/buyout/dump salaries. This year's trade deadline is probably going to be one of the most interesting, as several contending teams WON'T be able to add any players (Philly, NJ, Ottawa, Anaheim, etc) while bubble teams will be able to pick up salary dumps cheap. Strangely enough, players who are UFAs next season might have MORE value than those who have bloated contracts and are 2 or more seasons away from UFA status.
     
  9. missK

    missK Registered User

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    And the Thornton and Nash contracts had nothing to do with setting the market?? Iginla at $7M had nothing to do with it? How quickly you forget!

    Lecavalier, Thornton, Nash and Iginla are all franchise players. Nash just came out of his first pro contract for pete's sake!!! Lecavalier at 25 y/o got a 4 year contract so the Lightning are paying him a premium for the 3 years where he could have been an UFA. Thornton's contract of 3 years only covered 2 years of UFA, same with Iginla and Nash won't be a UFA for 4 more years.
     
  10. Lionel Hutz

    Lionel Hutz Registered User

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    How much out of these salaries is dedicated to 2-way deals and minor leaguers?

    The Cap was set at 39 per, if everyone spends that and then it adds up to too much, I don't really think that's over-budget as it is a risk all parties agreed to.
     
  11. Crazy_Ike

    Crazy_Ike Cookin' with fire.

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    What you seem to be missing is the fact the escrow makes it impossible for ANY signing to be "bad" in the sense of damaging the league. They can only make "bad" signings now that hurt themselves.

    "Bad" signings that the CBA was made to eliminate were those which set salaries into ranges most the teams couldn't afford. There has not been a single signing that qualifies so far, since every team is within the 39 million budget. If it goes over 54%, then all the salaries get reduced. So much for "bad" signings...



    Very poor analogy. To carry it properly, there is no longer any possibility of having an accident in the first place. Makes wearing a seatbelt pretty pointless, doesn't it?

    Why don't you illustrate what you think the effect of "bad decisions" (as you call them) will be? So we can see where your doom and gloom is going to? Because as far as I am concerned, and my opinion would probably be shared by the entire board of governors, if the league's salaries aren't going over 54% after the escrow goes in, then there hasn't been any "bad decisions" in the off-ice sense.
     
  12. Matt Gunning

    Matt Gunning Registered User

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    I agree that next summer could end up being very bizzare if the cap number comes down much at all. Some teams may have to shed established players and go with league minimum players just to get under the lower cap. BTW you can only renegoiate in the final year of a contract so that won't be an option most of the time.
     
  13. Captain Ron

    Captain Ron Registered User

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    I think fans in some markets would not agree with you. If Columbus signs a guy like Nash to a ridiculous contract it affects every other team in the league. Most contracts are tied to precedent. If GM "A" signs a twenty goal scorer to a $5 million contract he increases the market value of every twenty goal scorer in the league. The CBA does not address this subject specifically. It only sets a limit to what can be spent.The cap has not stopped the GM's from overpaying for players.

    The reason I started this thread in the first place was to point out that the GM's were not able to sign all of the RFA/UFA's available within the budget presented. Many thought that player values would be discounted compared to what was being paid pre-lockout. In many instances that has not been the case. In fact I have seen several instances where players got substantial raises over what they were making before the lockout.

    At the end of the day the escrow account will set things right and the league will make its profit. So I have never said there would be a 'doom and gloom' scenario. It was just a way to show that the payroll budget set forth by the league was never going to be attained except through use of the escrow account. An item put in the new CBA to protect GM's from their own stupidity. Because I guarantee that if a cap system were implemented this year without the 'escrow account' clause then the league would still be in financial trouble.
     
  14. X8oD

    X8oD Registered User

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    i may be reading this wrong, but you are implying that "Some teams SHOULDNT be close to the salary cap, so the numbers work out"

    a cap is a cap is a cap. If every team wants to spend up to the cap, so be it. Your saying some teams shouldnt spend their cap space so that the league wide costs stay down.

    If it was ever proven that this was being practiced, not only would the NHL be sued for collusion, but they would lose BIGTIME.
     
  15. Benji Frank

    Benji Frank Registered User

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    What's the big deal? The manager's are spending as they're permitted within the CBA. If teams aproach the cap limit in place (Anaheim & Philly come to mind) they're trading to get below it.

    As for the bar being set high on certain players, the first couple of guys in any specific category might have done ok, but then managers had to tighten up and find simular players for less then the going rate ... it all balances out. Next year, you'll see managers who're stuck with lofty contracts sitting on the sidelines stuck with their mstake while other GM's take advantage of the market correction...
     
  16. FlyerFan

    FlyerFan Registered User

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    Well said Crazy_Ike. :clap:
     
  17. Crazy_Ike

    Crazy_Ike Cookin' with fire.

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    Back in the old CBA I would agree with you. But not now. A 20 goal scorer does not get set to 5 million a year anymore just because someone else pays that. The salary cap looms over every team, and if the agent comes in and says "so and so got so much, we want it too!", the GM can now just lean back and say "that salary is not reasonable under the cap for us, sorry".

    You're arguing precedent, but I think it's too early to claim that. Salary precedents are muddled by the fact every team that has 39 million to spend will try to spend that much getting as much as they think they can.
     
  18. GSC2k2*

    GSC2k2* Guest

    You're kidding, right, Spongebob? Last season salaries were about $1.5 billion; less $66 mil in benefits, let's say $1.45 billion.

    Salaries will be nearly 25% less than that if every team capped out.

    I honestly do not get where the conventional wisdom came about that teams are "going crazy" with player signings. Two thirds of the league needed to be signed. OF COURSE a lot of players are being signed. Of that 2/3, there are an unprecedented number of high quality players. More than there ever has been and, in fact, more than there EVER will be (barring another yearlong lockout).

    I believe this little piece of conventional wisdom is right up there with the dandy one that was floating around just about the time the CBA info was starting to leak out, about how there will be reams and reams of players who will be bought out. Pure nonsense, of course, and it was proved as such, but that did not prevent the conventional wisdom from being spouted ad nauseum around here. Same thing for the "crazy spending" theory. Things are unfolding pretty well as might have been reasonably expected, in my view. Teams are spending what they can, locking up their top players long term where they can, decent (but not superstar) vets are getting squeezed, defencemen who can move the puck are at a premium, and GM's are being treated as fools by fans who can't believe he paid player X so much money 'cause player X sucks so bad. The universe continues to unfold as it should.
     
  19. jb**

    jb** Guest

    Why won't the Flyers be able to add any players at the trade dealine?
     
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