Is there Really no Room to go to 45.0 mil Cap??

Discussion in 'Fugu's Business of Hockey Forum' started by Mess, Feb 16, 2005.

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  1. Mess

    Mess Global Moderator

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    The Numbers don't lie ..

    Check out the Team Salaries after 24% rollback

    http://www.leaderboard.com/R1131.HTM

    Total Players Salary under contract = 854M
    Total Revenue = 2.1 Billion reported at in the Levitt Report

    Salary Cost after rollback = 854 Mil / 2.1 Bil = 41 % costs of revenue Currently

    $ 42.5 Mil proposed Hard Cap X 30 teams - 1.275 Mil

    NHL Proposal 1.275 Mil / 2.1 Bil = 61 % ** IF ALL TEAMS WENT TO 42.5 max **

    but Currently only 4 teams are above that figure and would need to drop down .. Philly 50.047 Mil, Toronto 46.607 mil , New Jersey 46.320 mil, Detroit 43.377 mil and that is included in the 41%

    Lets Say the NHL went to 45.0 Mil Hard Cap

    Average Salary

    Broken down by expected Salary Range

    5 Teams @ 45.0 Mil = 225 Mil
    5 Teams @ 40.0 Mil = 200 Mil
    10 Teams @ 35.0 Mil = 350 Mil
    5 Teams @ 30.0 Mil = 150 Mil
    5 Teams @ 25.0 Mil = 125 Mil

    30 Teams = Total Salary = $ 1.050 Bil

    Of Total Revenue 1.050 Bil AVE / 2.1 bil Revenue = 50 %

    but linkage was offered at 55% of Revenues in the previous Deal ..So even if Bettman went to 45.0 Mil Cap he would only realistically agreeing to 50% of total Revenue.

    Lets see if he does ..
     
  2. Chayos

    Chayos Registered User

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    Teh flaw to your plan is the revenue amounts will not be $2.1 billion and teh linkage allowed the cap to move with revenues where as a hard cap is constant so if you drop 50% in revenue your player costs go from 50% to 100% of costs.
     
  3. Tawnos

    Tawnos A guy with a bass

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    Payrolls will also rise once this is over because teams don't yet have enough players.
     
  4. Mess

    Mess Global Moderator

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    That here is based on Full teams and their expected Salary Range

    Average Salary

    Broken down by expected Salary Range

    5 Teams @ 45.0 Mil = 225 Mil
    5 Teams @ 40.0 Mil =
    200 Mil
    10 Teams @ 35.0 Mil = 350 Mil
    5 Teams @ 30.0 Mil = 150 Mil
    5 Teams @ 25.0 Mil = 125 Mil

    30 Teams = Total Salary = $ 1.050 Bil

    Of Total Revenue 1.050 Bil AVE / 2.1 bil Revenue = 50 %
     
  5. Chayos

    Chayos Registered User

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    lets change your bottom line there a bit.


    $1.050 billion/ 1.5billion revenue= 70 % of total reveuenes

    or worse yet

    $1.050/1.2 bil revenue= 87.5% of revenues.

    these would be closer numbers to what the reality facing the NHL in the next couple of years.
     
  6. Tuggy

    Tuggy Registered User

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    You are either very naive or completely clueless if you think that the NHL's revenues will be anywhere close to 2.1 billion for the next x amount of years. With the TV deal they have(which is ****), ticket sales(which are sure to drop) and merchandise sales (which I heard were down 85% at Christmas time :eek: ) how will they make anywhere near 2 billion?
     
  7. kremlin

    kremlin Registered User

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    This is not an issue.....season will be cancelled....see you next January. Hockeysfuture.com should also consider a name change given the latest development: Hockeyhasnofuture.com

    Things will get ugly from here on...
     
  8. Tawnos

    Tawnos A guy with a bass

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    Not if they save the season this year. Revenues will stabilize within the next 2 years as long as they settle NOW.

    However, this guy completely made those numbers up.

    There are 13 teams under $25 million right now. San Jose, Calgary, Edmonton, Minnesota, Boston, Carolina, Columbus, Nashville, Chicago, Atlanta, Florida, Washington and Pittsburgh. He really thinks that EIGHT of those teams are going to jump into the $30 million range? Boston will since they only have 11 players signed right now. The rest is up in the air.

    Also, 5 teams at $25 million is not the same as 5 teams between $25 and $30. Let's say those 5 teams are at 25, 26, 27, 28 and 29 (a much more likely scenario). You have $10 million more there than before. So say the actual number of teams in each bracket is right. Let's do this from low to high and use the AVERAGE in each bracket. Also, luxury tax will still count as payroll expenses. Scaling the NHLPA proposal down to 45 million would make it 25% from 36m-39m, 50% from 39m-42m and 75% from 42m-45m. Let's make this easy and say a 35m tax bracket at 25% and a 40m bracket at 50% and a $45mil cap.

    $25-29 million bracket, 5 teams, $27m avg, $0m tax, $135 million
    $30-34 million bracket, 5 teams, $32m avg, $0m tax, $160 million
    $35-39 million bracket, 10 teams, $37m avg, $5m tax, $375 million
    $40-44 million bracket, 5 teams, $42m avg, $5m tax, $210 million
    $45 million bracket, 5 teams, $45m avg, $12.5m tax, $237.5 million
    TOTAL $45 cap, 30 teams, $37.25m avg, $22.5m tax $1,117.5 million

    $1.175b/2.1b=56% of revenue.

    Revenues will go down and the 1.175 is still low.
     
  9. mytor4*

    mytor4* Guest

    Tawnos
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    Originally Posted by Chayos1
    lets change your bottom line there a bit.


    $1.050 billion/ 1.5billion revenue= 70 % of total reveuenes

    or worse yet

    $1.050/1.2 bil revenue= 87.5% of revenues.

    these would be closer numbers to what the reality facing the NHL in the next couple of years.



    Not if they save the season this year. Revenues will stabilize within the next 2 years as long as they settle NOW.

    However, this guy completely made those numbers up.

    There are 13 teams under $25 million right now. San Jose, Calgary, Edmonton, Minnesota, Boston, Carolina, Columbus, Nashville, Chicago, Atlanta, Florida, Washington and Pittsburgh. He really thinks that EIGHT of those teams are going to jump into the $30 million range? Boston will since they only have 11 players signed right now. The rest is up in the air.

    Also, 5 teams at $25 million is not the same as 5 teams between $25 and $30. Let's say those 5 teams are at 25, 26, 27, 28 and 29 (a much more likely scenario). You have $10 million more there than before. So say the actual number of teams in each bracket is right. Let's do this from low to high and use the AVERAGE in each bracket. Also, luxury tax will still count as payroll expenses. Scaling the NHLPA proposal down to 45 million would make it 25% from 36m-39m, 50% from 39m-42m and 75% from 42m-45m. Let's make this easy and say a 35m tax bracket at 25% and a 40m bracket at 50% and a $45mil cap.

    $25-29 million bracket, 5 teams, $27m avg, $0m tax, $135 million
    $30-34 million bracket, 5 teams, $32m avg, $0m tax, $160 million
    $35-39 million bracket, 10 teams, $37m avg, $5m tax, $375 million
    $40-44 million bracket, 5 teams, $42m avg, $5m tax, $210 million
    $45 million bracket, 5 teams, $45m avg, $12.5m tax, $237.5 million
    TOTAL $45 cap, 30 teams, $37.25m avg, $22.5m tax $1,117.5 million

    $1.175b/2.1b=56% of revenue.

    Revenues will go down and the 1.175 is still low.
    --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    so going by what you got above me means that the lower teams won't be able to improve their teams because if they try to then that blows your numbers right out of the water. lets say the bottom 5 teams add 2mil each to their team payroll and then the following yr the next 5 teams decide to improve a little and each also add 2mil each to their payroll, tell me then where do we stand. a lot more than 56% of revenue. with each team trying to improve a little bit the numbers get worst. 42.5 is and should be the limit for this cba. new numbers for the next cba but not till.
     
  10. BLONG7

    BLONG7 Registered User

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    The revenue stream is the great unknown right now, but 80% of hockey fans polled said they would be back if the fiscal side of things were straitened out. Tick,tick,tick.
     
  11. nyr7andcounting

    nyr7andcounting Registered User

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    That % is going to be high in the next year or two no matter what. There is no way around it at this point. The owners knew revenues would shrink when they started this lockout and things haven't changed. If the owners let it go past this season they might be looking at spend 75% of net revenues on players again and that will be the case until they get their revenues up. But, I don't have a problem with that. It's the owners choice to impose this lockout and it's their job to do the best they can to maximize revenues. If they do their job well revenues will be fine in a few years.
     
  12. Sam I Am

    Sam I Am Registered User

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    Let's not be ridiculous. Of course they can--and probably will--go to 45.
     
  13. GKJ

    GKJ Global Moderator

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    Gary Bettman is ridiculous. I wouldn't put it past him to be stupid enough to do this.
     
  14. Enoch

    Enoch This is my boomstick

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    The predictions made were silly - 11 teams last year were over 45 million alone.....We all know the rollback will just be a chance for teams to go out and get more players - if given the chance...
     
  15. Mess

    Mess Global Moderator

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    Well who called the Lockout ??

    Who refused to negotiate starting in September ..

    Now that Fans are pissed of and staying away Revenue is going down ..

    Players Salaries used to be 75% of Revenue ... Way to High I agree ..

    Now I show you that the current deal on the table at even 45.0 Mil Cap puts NHL Salaries at 50% .. That is a 25% reduction ... (75% - 50%) = 25% ..

    Then the players gave back 24% of their guaranteed Salaries ..

    So what does that Mean .. Players have given back 24% & excepted a 25% HARD cap = 49% Old CBA to now ..

    The NHL will throw away the season and 49% is not a good enough correct and now all the pro-owners ...BUT Revenue is going done ... so what do you want the Players to give back 75 % .. ???
     
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