Proposal: Is the current Salary cap fair?

[David Chase]

Now, before I begin this isn't a Stamkos didn't come here because of money situation, but I'm going to bring Stamkos contract in Tampa up in this post.

So, Stamkos signs an 8 year 8.5 AAV contract to stay in Tampa, in the state of Florida which has no state tax. If Stamkos were to sign in Toronto instead of Tampa for the same contract, he would lose an additional $1.19 million a season, and over $9.52 million over the course of the contract. That being said, Toronto would have to pay Stamkos that additional amount which would make his AAV $9.69 million per season, and hurt Toronto as a competitive organization more so due to losing an additional $1.19 million in cap.

Now, all that being said it leads to my proposal. I feel that the NHL should change it's salary cap rules based on the teams they have permitted to be apart of the league. Whatever team has the lowest State tax combined with the US federal tax and that should be what's used to calculate salary cap. If Tampa Bay is only having to pay 38% tax, and players are able to sign lesser contracts by using this calculation while giving the team signing them additional cap space I deem that to be unfair, and anti competitive. All teams are playing within a framework that's intended to be fair. Having even one team, capable of having additional funds at their disposal to build and use puts all other teams at a disadvantage.

Something has to be done to make the salary cap fair for all teams within the league and the only way to do that is to change the system, a hard cap set for all teams at whatever the value needs to be on a sliding scale, teams that operate in areas with higher tax rates should have their salary cap increased by that %, and the teams that live in areas that have no state tax should have their max cap reduced by that same %, it's the only fair way to do business in the league.

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[Gallagbi]

Every team has slightly different situations they deal with. Taxes, gate sales, marketability, etc..

You can't remove all of these factors, so you put in a salary range (floor to max) like the league has done.

 

[David Chase]

I understand that, but this isn't about the profitability of the team, this is about having a fair and equal footing within the salary cap to sign players. If a team in Tampa can sign a player for over a million dollars less than a team in Canada, and they get all that extra cap money to spend on other players, how is that fair?

 

[Gallagbi]

The same way it is "fair" that Toronto can spend to the cap max and Arizona will struggle to reach the floor.

 

[Grimmas]

I understand that, but this isn't about the profitability of the team, this is about having a fair and equal footing within the salary cap to sign players. If a team in Tampa can sign a player for over a million dollars less than a team in Canada, and they get all that extra cap money to spend on other players, how is that fair?

it's fair, because he would make more money in Toronto, because it's a bigger hockey market.

 

[Leafsman]

The same way it is "fair" that Toronto can spend to the cap max and Arizona will struggle to reach the floor.

Well, that's a valid point if there ever was one.

I was thinking it was alittle unfair but that sheds a whole new light.

Kodos

 

[Joey Hoser]

Every team has slightly different situations they deal with. Taxes, gate sales, marketability, etc..

Yeah. Get rid of all that and you'll still have things like weather, nightlife... etc.

 

[SprDaVE]

It isn't.

 

[Warden of the North]

No, but I think the taxes thing is a bit overblown.

It didnt stop CHI, PITT, LA, or Boston from winning Cups.

 

[DopeyFish]

They should make the cap based around post tax dollars

Every team has different weights

 

[HoweHullOrr]

Does anybody know if the other Canadian teams and fan bases have a similar thread?

 

[rrc1967]

does anyone actually have a firm grasp of the tax law involved or even how the players are set up or being paid?

I really doubt they are being payed as an employee of the team, but probably more likely as a independent contractor.

it would then be pretty moronic for the player not to have a corporation structure set up to handle things, making this a pretty moot .. whine or point.

where it would come into play is jock taxes, and the like and also when the corporation actually pays out the player directly.

 

[Stephen]

I've said this from the very beginning of the salary cap era that you should simply be able to acquire cap space in the form of a luxury tax.

Let's say you're at the cap max and you need cap relief for $7.5 million. Call up the Arizona Coyotes to acquire their cap, which will cost some percentage in real world dollars, so it puts money in the pocket of the cheap teams, and it allows the rich ones to do something about their busting cap that doesn't involve dismantling everything.

 

[Neil Hamburger]

Is it fair that Steven Stamkos could probably make tens of millions of dollars extra in endorsements (definitely more than any tax differences) if he played in Toronto vs if he played in Tampa?

The salary cap isn't perfect, but it's the best of any North American sports league I can think of - there is genuine parity in the NHL.

 

[Anthrax442]

Stamkos signed in Tampa because he wanted to sign in Tampa, not because of any other BS reasons.

 

[Anthrax442]

But yeah, if I could, I'd abolish the draft and cap altogether.

 

[JonW]

But yeah, if I could, I'd abolish the draft and cap altogether.

The NHL draft is one of the few major sports that actually works properly. The only thing I'd change with it is make all the ELC bonus' identical for everyone.

The cap should be a cap, but there shouldn't be a floor, and teams should be able to buy out more contract space.

 

[Banic]

Very simply cap should be based on after tax dollars and there should be no max number of contracts.

 

[Tie Domi Esquire]

It's not. Seeing Tampa poach players from NYR recently on relatively sweetheart deals was kind of sad to see knowing that it could happen to Toronto if we could ever get good players.

 

[Banic]

The same way it is "fair" that Toronto can spend to the cap max and Arizona will struggle to reach the floor.

This is irrelevant though. If you can't pay to the cap that's an owner issue. Toronto can't change its taxation laws.

 

[David Chase]

People are going off topic, the salary cap is supposed to be the maximum a team can spend to aquire players. Weather, endorsements, any other off issues have nothing to do with the salary cap. As has been mentioned if certain 'poor' teams can't afford to spend to the cap, that's an ownership and market issue, it has nothing to do with the fairness of the cap. I agree with what others have mentioned that the cap needs to be reflective of after tax dollars, or everyone needs to have their %'s normalized to give all teams equal footing. It's not 'unfair' for Arizona to be in a non hockey market spending at the minimum struggling to compete, that's a mistake by the NHL trying to bring hockey to a market that makes no sense. Especially when there are cities and markets that live for hockey that have no team.

Also, as I said in my original post, this isn't about Tampa, or Stamkos, it was just an example used. I'm not whining that he didn't go to Toronto, I'm simply suggesting that the cap system needs to change because the tax situation in various markets (and all the canadian markets) isn't fair. Canadian teams are paying more for players (due to the Canadian dollar), and having to give players higher contracts (due to the increased tax situation in all Canadian NHL teams provinces), and as a result have less cap space to sign players. It needs to be addressed.

 

[indigobuffalo]

It's way too complicated to adjust the salary cap purely on after tax dollars because you have to account for what those tax dollars go towards.

Not everyone is making $70M and so things like free healthcare make a big difference.

$100,000.00 to have a baby vs. $0.00

Crime rates? School systems? Communities... Politics...

There are so many additional factors that would have to be accounted for.

It's just not happening.

 

[colchar]

The same way it is "fair" that Toronto can spend to the cap max and Arizona will struggle to reach the floor.

Different situations. Toronto faces higher taxes because of their federal, provincial, and municipal governments. The Leafs have no influence over that. Arizona struggles to put butts in the seats and that is something they have influence over - find a way to get more people in the building or move the team to a location that will support it.

 

[indigobuffalo]

If state tax was really a factor Edmonton and Calgary would be hotbeds of UFA signings but they aren't.

Maybe we should adjust the cap based on the average temperature of the team's city. Make it fair because who wouldn't want to live in Florida over living in Edmonton or Winnipeg...

 

[GojuLeaf]

I think its fair.
the nhl is a far more balanced league than other major sports.
We never have any 0-16 or 10-72 teams
even our worst teams tend to get 25 wins.