Issues in NFL labor

[djhn579]

Big market teams would have an advantage because they have the money to sign bigger bonuses. How can Calgary give Iginla a $12 million bonus upfront to match an offer Detroit gave him?

So now all of a sudden (again) the NFL system isn't good enough for hockey, huh? Bet your ass that if the PA came to the league tomorrw and accpted the NFL system, the NHl would agree in a minute(minus the revenue sharing, of course) The loophole won't be closed because the NHL wants (and needs) to ensure that its biggest markets have good teams with marquis players.

Do you know what a loan is? Do you think that big market teams just have cash lying around waiting to be given away as a signing bonus? If the NHL does not count signing bonuses against the cap, they are fools. I personally can't see how they could not count it agaisnt the cap since they are saying all player costs must be below what ever the cap level is set at, not just salaries.

I'll wait until I see what is actually signed before I get too worked up over this...

 

[hockeytown9321]

Some teams will always have a financial advantage over others. This is exactly why a cap helps. It neutralizes, as much as possible, that financial advantage.
This is also why I'm in favor of an NBA-style system. It won't prevent teams from spending as much as they want to spend. If the Rangers want to spend $100 million, then bully for them. Have at it.
But what it will do is a) prevent smaller revenue teams from losing homegrown stars to other teams who can pay more b) install a maximum salary so that the market is not unduly influenced by the spending habits of the rich and famous (i.e. Mark Cuban).

And as I've said all along, the NBA's system is perfectly fine with me. As long as teams have the oppurtunity to keep their players if they develop.

But, since the NBA system also includes significant revenue sharing, the NHL will have no part of it.

 

[hockeytown9321]

Do you know what a loan is? Do you think that big market teams just have cash lying around waiting to be given away as a signing bonus? If the NHL does not count signing bonuses against the cap, they are fools. I personally can't see how they could not count it agaisnt the cap since they are saying all player costs must be below what ever the cap level is set at, not just salaries.

I'll wait until I see what is actually signed before I get too worked up over this...

Yes, teams do have lots of moeny laying(or should I say lying) around.

And on gauranteed contracts, how does any team hang onto its core with them? They can do it in football (though not easily) because contracts are not gauranteed and the signing bonus sytem is in place. No team could keep any semblance of a core together for any length of time with guaranteed deals.

 

[CarlRacki]

And as I've said all along, the NBA's system is perfectly fine with me. As long as teams have the oppurtunity to keep their players if they develop.

But, since the NBA system also includes significant revenue sharing, the NHL will have no part of it.

NBA revenue sharing isn't as vast as you believe. Take away the $4.6 billion national TV contract (which is all shared) and the level of revenue sharing is relatively small. Unfortunately, the NHL lacks that big TV contract to share.

Funny you say the owners would never accept it, since it's the PA that's flatly rejected the concept of a NBA-style system for the NHL.


From a radio interview with Ted Saskin:

When asked how the NBA salary cap as it works would be a bad one for the NHL

"Again, I think what you have to do is you have to look at each sport and look at what is appropriate given the particular facts of the sport. I don't think the NBA for players is particularly good system in hockey. I think there are much better ways of addressing any issues we have in hockey. We've sat with league representatives and tried to reason some of those."

When asked for specifics since NBA players have guaranteed contracts and are well paid

"The NBA deal still is the premise that no matter what market you are in you are going to have the same cap limit. They've had certain exceptions to the cap -- the Larry Bird exception, et cetera. But over time those have been whittled away as they have put in various mechanisms to move everyone towards the same payroll level. Obviously the situation with the Knicks and other teams get into situations where they run out of the cap room. We just think that more appropriate for hockey is not trying to design one level that's the same in Nashville, Toronto, Dallas and New York because the markets are different and they can support different levels and the fans pay for a different level when they go out there and pay their tickets. We think there should be a bit of a range and that's the type of mechanism we think is appropriate to look at. We're prepared to take a lot of restraint on our salaries. That's part of the concessions that we've put forth. We just think that we need to sit down and design a system that makes sense for hockey, not just try to look at another sport and say 'Let's grab that one' and put it into our sport, which may have a whole different set of financial underpinnings in terms of how revenues are shared, et cetera."

http://www.andrewsstarspage.com/11-24-04cba.htm

 

[djhn579]

Yes, teams do have lots of moeny laying(or should I say lying) around.

And on gauranteed contracts, how does any team hang onto its core with them? They can do it in football (though not easily) because contracts are not gauranteed and the signing bonus sytem is in place. No team could keep any semblance of a core together for any length of time with guaranteed deals.

I'll apologize for my gramatical error since we are being so picky. But then, I don't know anything about MOENY laying around either.

I'm not a pro at this, but I would think that with guaranteed contracts, you have to plan a little bit better on how you want to keep your core together. How it will end up being done, I have no idea since no CBA has been agreed to and that would have to come first. I could possibly see some renegotiating of contracts for teams to get under the cap. I could also see teams being allowed to cut players (while still having to pay their salary if they are not picked up by another team) to get their roster under the cap.


Everything depends upon what is eventually agreed to, so again, I'm not going to get too worked up about this until something is actually signed.




P.S. Were you going to give some proof that the people wanting the cap wanted total equality as you stated in your post?

Thas fine. But the fact is the end game of communism is total equality, and thats what small market fans(not owners) want with a cap.

 

[hockeytown9321]

P.S. Were you going to give some proof that the people wanting the cap wanted total equality as you stated in your post?

There's hundreds of posts here that rail on about a cap making the playing filed even, or equal.

btw, I wasn't taking any shots at you on the grammar or spelling or whatever. I type fast and I know I make tons of typos. What I wanted to imply was that the owners are lying about how much money they have.

 

[hockeytown9321]

My guess is the NHL would very willingly take is chances with the big bonus issue the second NHL players abandon guaranteed contracts. Where do you place the chances of that happening?
Conversely, I'd bet NFL players would eschew the big bonus money in a hearbeat in exchange for guaranteed contracts.

The NHL would have no problem with the bonus issue becuase they don't care about competitve balance. If you listen to some here, the NHLPA has no leverage, and whatever the NHL wants, they'll get. And you can damn well bet Bettman will push for non-guaranteed contracts. Why would he stop at just the hard cap if he can implement whatever he wants? Why not go for it all?

 

[CarlRacki]

The NHL would have no problem with the bonus issue becuase they don't care about competitve balance. If you listen to some here, the NHLPA has no leverage, and whatever the NHL wants, they'll get. And you can damn well bet Bettman will push for non-guaranteed contracts. Why would he stop at just the hard cap if he can implement whatever he wants? Why not go for it all?

So let me get this straight ... you're arguing that a cap system without guaranteed contracts and with large bonuses (a la the NFL) would be bad for competitive balance? What about the NFL experience with the identical system has proven that?

 

[hockeytown9321]

I'm not a pro at this, but I would think that with guaranteed contracts, you have to plan a little bit better on how you want to keep your core together. How it will end up being done, I have no idea since no CBA has been agreed to and that would have to come first. I could possibly see some renegotiating of contracts for teams to get under the cap. I could also see teams being allowed to cut players (while still having to pay their salary if they are not picked up by another team) to get their roster under the cap.

Sorry, ment to qutoe this part in the other post too. I don't know what they'd do with existing deals to get teams under a cap. I'm not all that concerned about that right now.

My point is NFL teams can build through the draft and sustain a team in a very limited way right now with non gauranteed deals. There's no way Philly or New England or Indy or anybody else could keep an elite team together without non-gauranteed contracts. And isn't that the NHL fan's concern?

Basically, the NHL has 3 options:
First, gauranteed contracts. No chance to build a team or keep it together.

Second, non-guaranteed deals, no signing bonus loophole. That's fine, but I don't think the league would get too far in court with a proposal that offers the players no oppurtunity for gauranteed money, and like I said before, the NHL knows big market teams have to have marquis players for TV purposes. Atlanta's owner admitted as much.

Third, the NFL system of non-guaranteed deals with the signing bonus loophole. Big revenue teams have an inheret financial advantage over small markets in this case, and will until the small markets get enoguh revenue to compete.

 

[hockeytown9321]

So let me get this straight ... you're arguing that a cap system without guaranteed contracts and with large bonuses (a la the NFL) would be bad for competitive balance? What about the NFL experience with the identical system has proven that?

Simple. Each NFL team has the revenue to pay those bonuses. Each NHL team does not. The NHL teams that can have a financial advantage.

 

[hockeytown9321]

Funny you say the owners would never accept it, since it's the PA that's flatly rejected the concept of a NBA-style system for the NHL.

If the NHL proposed it to them, I would say the PA should take it. The fact is, neither side has any interest in it, both for different reasons.

 

[Jaded-Fan]

There's hundreds of posts here that rail on about a cap making the playing filed even, or equal.

(repost from another thread answer, as it applies)

I do not think that any, even the most ardent of Cap supporters, wants as a goal 'that every team has a relatively good shot at being a contender every year.' Or even that the playing field be made 'even' down to the amount you pay a coach or scout. All that is asked for is to remove the most aggregious of unlevelling influence which creates massive resentment and undermines the credibility of a game as a real sport. When aggregate salaries reach multiples between high spenders and low spenders you are there (in the case of the Yankees the multiple has reached tenfold).

The game ceases to be seen as a competition but more akin to a mile race between you and me where most everything else is equal except that you get to start halfway to the finish line. After a while, I really do not care to race against you even though every once in a while you might trip and fall and I may win. And how 'proud' can you be about your subsidized win? And a sport? Give me a break, non cap sports are a joke, not a sport.

 

[Motown Beatdown]

Profitability? Yes. Comeptitiveness? No. The bottom line remains that some NFL teams - even with all the revenue sharing - make more money than others. If they could those teams would use that advantage in a heartbeat. The cap makes sure they can't.

Sure some teams MAKE more than others, but the key is all teams are making money. Okay Green Bays profits might not be as much as the Redskins. But the point is the Packers are still making money. Teams are no longer running into the red because of profit sharing. And it doesn't effect competitive balance. Because the TV deals pays for the payroll, so tell me how it hurts competitive balance? IT's just some teams PROFIT more than others. It's as simple as that.

Incase anyone is interested, here's a full link to the article. And ofcourxe my favorite part....

“This league was based on people being partners and being together and helping out,†Pittsburgh Steelers owner Dan Rooney said. “It’s one of the strong points of our league – the competitiveness, the idea of ‘on any given Sunday.’ It’s a matter of fairness. We need to address this to maintain the way this league has always worked successfully. Everyone recognizes the problem, (but) the guys with a lot of money don’t want to give (the money) up.â€

http://www.fortwayne.com/mld/journalgazette/sports/10608898.htm

 

[Nomad]

Can anyone tell me how many sports have had success utilizing a CBA with a salary cap but no significant revenue sharing?

Revenue sharing is the key to financial stability in the league. A salary cap does nothing to promote that stability, especially when you consider one with a salary floor like the one proposed by the NHL. It is designed to make the league profitable on paper as a single entity, without concern for the profitability of the 30 teams of which it consists. The only reason that a salary cap is capable of working in the NFL is because every team is provided with enough money before any given season even begins to cover the salary cap for the year. No NFL team can lose money because the revenue sharing is so extensive. If the Bengals don't sell a ticket for any of their home games in the 2005-2006 season, they are going to make a profit.

Conversely, we have the NHL with no real revenue sharing. If the Carolina Hurricanes, playing in a capped system with a minimum salary level of $34.6M but no revenue sharing, they will be in exactly the money-losing position that they are now. Their salary levels are already at that point, and they lose money. And ultimately, doing so is in the best interest of the teams like the Red Wings, Rangers, and Avalanche, because the less money Carolina makes, the lower the salary cap for those teams, which drives up their profit margins. Take away the salary cap, and just institute an aggressive revenue sharing system, and all of a sudden the marketability and profitability of the Hurricanes is in the best interest of those teams, as they share in those profits. And if Carolina is a lost cause, then all the more reason for those teams to gun to have them moved to a better market.

A minor side note: The point regarding the money in any particular division is founded on a bit of a fallacy. Teams play 20 games against their own division, and 20 each against the other two divisions in their conference. The money distribution is fairly even within conferences, and I don't expect that there is all that much disparity between the two conferences.

 

[CarlRacki]

Sure some teams MAKE more than others, but the key is all teams are making money. Okay Green Bays profits might not be as much as the Redskins. But the point is the Packers are still making money. Teams are no longer running into the red because of profit sharing. And it doesn't effect competitive balance. Because the TV deals pays for the payroll, so tell me how it hurts competitive balance? IT's just some teams PROFIT more than others. It's as simple as that.

Incase anyone is interested, here's a full link to the article. And ofcourxe my favorite part....


http://www.fortwayne.com/mld/journalgazette/sports/10608898.htm

I agree with everything you've said, but youre leaving out one key point. The cap largely prevents those teams earning more revenue from using that advantage to outbid lower-revenue teams for the best players. A recent USA Today story (I'll find the link if you want) outlined how the Redskins and Cowboys were making as much as $100 million more per season than the Colts. Does anyone believe for a second that if Dan Snyder or Jerry Jones could have used that advantage to get Peyton Manning away from the Colts they wouldn't have? Of course they would have. That's why the cap is necessary.

 

[hockeytown9321]

Conversely, we have the NHL with no real revenue sharing. If the Carolina Hurricanes, playing in a capped system with a minimum salary level of $34.6M but no revenue sharing, they will be in exactly the money-losing position that they are now. Their salary levels are already at that point, and they lose money. And ultimately, doing so is in the best interest of the teams like the Red Wings, Rangers, and Avalanche

I'm starting to think a little differently about Bettman's motives. I think the NHL knows the cap will not increase competitve balance, and actually make it easier for teams like Detroit, Toronto and New York. The rich teams will be able to pick off superstar free agents right as they enter their prime. I really think this is part of the leauge's plan. Nobody can argue that the league makes more money or is more visable in the US with Iginla in Calgary than if he was in New York.

 

[me2]

I'm starting to think a little differently about Bettman's motives. I think the NHL knows the cap will not increase competitve balance, and actually make it easier for teams like Detroit, Toronto and New York. The rich teams will be able to pick off superstar free agents right as they enter their prime. I really think this is part of the leauge's plan. Nobody can argue that the league makes more money or is more visable in the US with Iginla in Calgary than if he was in New York.

It also makes it easier for Calgary to pick off Detroit's superstars. Imagine that, Yzerman poached from the Wings while in his prime.........

 

[djhn579]

There's hundreds of posts here that rail on about a cap making the playing filed even, or equal.

btw, I wasn't taking any shots at you on the grammar or spelling or whatever. I type fast and I know I make tons of typos. What I wanted to imply was that the owners are lying about how much money they have.

Sorry, I sometimes shoot first and ask questions later...

 

[djhn579]

Sorry, ment to qutoe this part in the other post too. I don't know what they'd do with existing deals to get teams under a cap. I'm not all that concerned about that right now.

My point is NFL teams can build through the draft and sustain a team in a very limited way right now with non gauranteed deals. There's no way Philly or New England or Indy or anybody else could keep an elite team together without non-gauranteed contracts. And isn't that the NHL fan's concern?

Basically, the NHL has 3 options:
First, gauranteed contracts. No chance to build a team or keep it together.

Second, non-guaranteed deals, no signing bonus loophole. That's fine, but I don't think the league would get too far in court with a proposal that offers the players no oppurtunity for gauranteed money, and like I said before, the NHL knows big market teams have to have marquis players for TV purposes. Atlanta's owner admitted as much.

Third, the NFL system of non-guaranteed deals with the signing bonus loophole. Big revenue teams have an inheret financial advantage over small markets in this case, and will until the small markets get enoguh revenue to compete.

I just don't see where you get that the signing bonus is a loophole. Signing bonuses count against the cap. In fact, there is a strong penalty involved if you cut a player that has a large signing bonus in that when you cut him, the remainder of the pro rated signing bonus counts towards the cap the next season. For instance, Vick signed that contract for $130M over 10 years, including a $30M signing bonus. That signing bonus counts as $3M against the cap each year. If Vick is cut after the 5th year, the team takes a $15M cap hit in the sixth year.

Performance bonuses are a little bit of a loophole in NFL contracts in that they only count against the cap if they are considered achievable. To determine if a bonus is achievable, they look at the previous season. If a player gets a bonus for making 1000yds, but they only had 999yds the previous season, the bonus is not considered achievable. That is why most NFL teams are over the cap. The only way to fix that would be to have all bonuses in the contracts count against the cap, but that just means more profit to the owners if the bonuses are not met.

 

[hockeytown9321]

I just don't see where you get that the signing bonus is a loophole. Signing bonuses count against the cap.

Sure. But they're prorated. And they're paid upfront. The small revenue teams do not have the revenue to pay as big upfront bonuses that the big ones can.

Lets say theres a hard cap with non-guaranteed contracts. Calgary offers Iginla a 5 year $30 million deal and a $5 million upfront bonus. Their cap hit is $7 million a year. Detroit comes along and offers him the same deal only with a $10 million bonus. Their cap hit is $9 million a year. Not much different. Where does Calgary get the money to match that bonus? Isn't it kinda likely that Iginla takes less (non-guaranteed) salary from the Red Wings in exchange for double the bonus? Lets say he takes a million per year less, Detroit's cap hit is the same as Calgary's? Which deal would you take?

 

[hockeytown9321]

It also makes it easier for Calgary to pick off Detroit's superstars. Imagine that, Yzerman poached from the Wings while in his prime.........

Where does Calgary get the cash?

 

[CarlRacki]

Sure. But they're prorated. And they're paid upfront. The small revenue teams do not have the revenue to pay as big upfront bonuses that the big ones can.

Lets say theres a hard cap with non-guaranteed contracts. Calgary offers Iginla a 5 year $30 million deal and a $5 million upfront bonus. Their cap hit is $7 million a year. Detroit comes along and offers him the same deal only with a $10 million bonus. Their cap hit is $9 million a year. Not much different. Where does Calgary get the money to match that bonus? Isn't it kinda likely that Iginla takes less (non-guaranteed) salary from the Red Wings in exchange for double the bonus? Lets say he takes a million per year less, Detroit's cap hit is the same as Calgary's? Which deal would you take?

Again, you're making the fantastical leap that the league is going to abandon guaranteed contracts. The league says they're not. The PA says they're not. You saying it over and over again won't change that fact.

That said, why are you assuming Calgary can't come up with an extra $5 million? There are all sorts of revenue streams and places to get capital out there. One would think that in a capped league, Calgary's revenue-producing prospects would be very good, meaning they wouldn't have difficulty securing $5 million for a loan if need be, especially if the bonus offsets future payments to Iginla. Also, the loan would produce additional revenue for the club in that it helps secure the services of its premiere player. Businesses loan money all the time with an eye towards using the capital to invest insomething that ultimately will produce more revenue (i.e. a new factory, new airplanes, etc). Why should this be any different?

 

[hockeytown9321]

Again, you're making the fantastical leap that the league is going to abandon guaranteed contracts. The league says they're not. The PA says they're not. You saying it over and over again won't change that fact.

if they have gauranteed deals, how does an elite team stay together?

That said, why are you assuming Calgary can't come up with an extra $5 million? There are all sorts of revenue streams and places to get capital out there. One would think that in a capped league, Calgary's revenue-producing prospects would be very good, meaning they wouldn't have difficulty securing $5 million for a loan if need be, especially if the bonus offsets future payments to Iginla. Also, the loan would produce additional revenue for the club in that it helps secure the services of its premiere player. Businesses loan money all the time with an eye towards using the capital to invest insomething that ultimately will produce more revenue (i.e. a new factory, new airplanes, etc). Why should this be any different?

If its so easy to get loans, why can't Calagry do it now. There'd be no need for a lockout. And I don't think the league would be all that healthy financially if all the low revenue teams were constantly in debt due to player costs.

 

[djhn579]

Sure. But they're prorated. And they're paid upfront. The small revenue teams do not have the revenue to pay as big upfront bonuses that the big ones can.

Lets say theres a hard cap with non-guaranteed contracts. Calgary offers Iginla a 5 year $30 million deal and a $5 million upfront bonus. Their cap hit is $7 million a year. Detroit comes along and offers him the same deal only with a $10 million bonus. Their cap hit is $9 million a year. Not much different. Where does Calgary get the money to match that bonus? Isn't it kinda likely that Iginla takes less (non-guaranteed) salary from the Red Wings in exchange for double the bonus? Lets say he takes a million per year less, Detroit's cap hit is the same as Calgary's? Which deal would you take?

But as I pointed out before, all teams, big and small are going to be paying these big bonuses the same way - through loans. Using the corporate backing of the other business owned by the team owner, they should be able to get low interest loans. And no owner, big or small has $30M sitting in their wall safe. That much money has to be put to work making more money by being invested. If you had that much money, and knew you could make at least 5% interest on that $30M, would you have it sitting around doing nothing? (5% of $30M is $1.5M, and that does not include compounding...)

 

[CarlRacki]

if they have gauranteed deals, how does an elite team stay together?



If its so easy to get loans, why can't Calagry do it now. There'd be no need for a lockout. And I don't think the league would be all that healthy financially if all the low revenue teams were constantly in debt due to player costs.

1. Are you trying to say that elite NFL teams stay together because of non-guaranteed deals? How many starters did New England waive after the Super Bowl? How many starters has Philly waived the past few years to stay under the cap? How about Indy? Or St. Louis? Those teams lose starters to free agency, of course, but they're not waiving guys left and right as you would have us believe. They key is keeping a core groups of guys together then filling in the role players as best one can under the limitations of the cap. It's called smart management and it's generally what separates the good from the bad in the NFL.

2. I wouldn't necessarily be easy for the Flames to get loans now because of the NHL's current economic system which increases the likelihood of them defaulting on a loan. A capped system would increase, though not guarantee, the chances of profitability, making the club more attractive to the capital markets.

3. Most major corporations owe debt perpetually. It's party of doing business and it does not mean they're all unhealthy. In fact, not owing debt is considered a bad thing in the financial markets.