It's time to institute a luxury tax

[Svechhammer]

I am truly convinced that some people would be happy if the NHL was just a 4 team league of teams in Toronto, NY, Boston and Montreal because in an era of luxury tax those are really the only markets that would be able to outspend everyone every year.

Baseball is ruined with the same teams spending to win every year. Basketball is just as bad.

Hockey has it great because anyone can win any year, and with good management any franchise can be a contender within 5 years. Allowing bad management to buy their way out of mistakes won't make the NHL better.

 

[Steamy Ray Vaughn]

I am truly convinced that some people would be happy if the NHL was just a 4 team league of teams in Toronto, NY, Boston and Montreal because in an era of luxury tax those are really the only markets that would be able to outspend everyone every year.

Baseball is ruined with the same teams spending to win every year. Basketball is just as bad.

Hockey has it great because anyone can win any year, and with good management any franchise can be a contender within 5 years. Allowing bad management to buy their way out of mistakes won't make the NHL better.

I don't think the NHL will ever become that way. I am also not advocating for an abolition of the salary cap. Under my idea, the most I would be allowing a team to go over the cap without severe punishment is 50%, which yes is a lot but given how much I would tax and how unpredictable hockey is and the fact that the punishments would be very severe, I don't foresee anyone going that far in such a system. I would also eliminate LTIR given there's no need for it with a luxury tax.

The idea that the cap is keeping parity is just untrue, others in this thread have agreed. The salaries are increasing at a rate that is not being supported by the cap, the NHL is way behind in generating revenues next to the NBA, MLB and the NFL. Maybe there is something to be said for giving bigger markets a leg up?

 

[Svechhammer]

I don't think the NHL will ever become that way. I am also not advocating for an abolition of the salary cap. Under my idea, the most I would be allowing a team to go over the cap without severe punishment is 50%, which yes is a lot but given how much I would tax and how unpredictable hockey is and the fact that the punishments would be very severe, I don't foresee anyone going that far in such a system. I would also eliminate LTIR given there's no need for it with a luxury tax.

The idea that the cap is keeping parity is just untrue, others in this thread have agreed. The salaries are increasing at a rate that is not being supported by the cap, the NHL is way behind in generating revenues next to the NBA, MLB and the NFL. Maybe there is something to be said for giving bigger markets a leg up?

Luxury tax is basically a cap for every team that isn't super rich. It doesn't do anything to curtail spending to win. The leagues that have something like that set up (MLB with the luxury tax, NBA with Bird Rights) see the teams in the wealthiest markets far outspending everyone else, and many, many organizations falling into a rut of continually selling off good players because they know they have no hopes of retaining in FA because those large markets are willing to spend sometimes triple the payroll of others.

The best thing is what we have. Everyone plays by the same rules. The super rich teams aren't allowed to buy titles, which helps pull up everyone else because everyone has a legitimate chance.

There are better ways of closing up the LTIR loopholes than to institute a luxury tax that really only benefits those who the cap is supposed to reign under control. We already saw in the 90s with Toronto, NYR, Philly, Detroit, etc spending gobs of money every year, it legitimately held back competition. The league would have died had we continued down that path.

 

[Steamy Ray Vaughn]

Luxury tax is basically a cap for every team that isn't super rich. It doesn't do anything to curtail spending to win. The leagues that have something like that set up (MLB with the luxury tax, NBA with Bird Rights) see the teams in the wealthiest markets far outspending everyone else, and many, many organizations falling into a rut of continually selling off good players because they know they have no hopes of retaining in FA because those large markets are willing to spend sometimes triple the payroll of others.

The best thing is what we have. Everyone plays by the same rules. The super rich teams aren't allowed to buy titles, which helps pull up everyone else because everyone has a legitimate chance.

There are better ways of closing up the LTIR loopholes than to institute a luxury tax that really only benefits those who the cap is supposed to reign under control. We already saw in the 90s with Toronto, NYR, Philly, Detroit, etc spending gobs of money every year, it legitimately held back competition. The league would have died had we continued down that path.

The problem with this reasoning is that it assume that the more money you spend, the more championships you win but that's not the case. For every Vegas last year you'll have a team fire of all cylinders at just the right time and cause an upset. Hockey is a game of inches, of chemistry, having a strong defense, hot goaltending and good coaching can take you farther than just signing a lot of really expensive talent. It's unpredictable. Also you can't play the stars for 60 minutes a game, or even 45 minutes. 20+ minutes is considered a lot for an offensive players, more than 30 is extremely rare for a defenseman (not including OT of course). By comparison, a basketball game has 48 minutes of clock time and you'll often see stars playing at least 30 minutes a game. There's also no goaltender in basketball, which means even the best defense is vulnerable to a good shooter.

A luxury tax would simply allow teams to better protect star talent and get a little farther in the playoffs. The problem is not retaining the best players, that's already happening, it's finding good second tier players that can compliment the stars and take a little bit of pressure off. Those guys now cost too much money with the cap at the level it is so you're stuck trying to find a square peg to put in a round hole.

The cap is about revenue sharing, not about parity.

 

[Svechhammer]

The problem with this reasoning is that it assume that the more money you spend, the more championships you win but that's not the case. For every Vegas last year you'll have a team fire of all cylinders at just the right time and cause an upset. Hockey is a game of inches, of chemistry, having a strong defense, hot goaltending and good coaching can take you farther than just signing a lot of really expensive talent. It's unpredictable. Also you can't play the stars for 60 minutes a game, or even 45 minutes. 20+ minutes is considered a lot for an offensive players, more than 30 is extremely rare for a defenseman (not including OT of course). By comparison, a basketball game has 48 minutes of clock time and you'll often see stars playing at least 30 minutes a game. There's also no goaltender in basketball, which means even the best defense is vulnerable to a good shooter.

A luxury tax would simply allow teams to better protect star talent and get a little farther in the playoffs. The problem is not retaining the best players, that's already happening, it's finding good second tier players that can compliment the stars and take a little bit of pressure off. Those guys now cost too much money with the cap at the level it is so you're stuck trying to find a square peg to put in a round hole.

The cap is about revenue sharing, not about parity.

Its not about the teams at the top. Its about making sure you don't let the smaller franchises get to a point where they are incapable of ever competing because they don't have the means to spend at the rate of the others.

In baseball, sure you have some teams who aren't on the top tier of spenders going deep into the playoffs every year, but those teams who spend are always there. It puts a ceiling on what most franchises can do outside of a fluke run or getting unbelievably lucky in the draft. And even then, those teams lose all their players when their contracts run out because they can't afford the salaries that teams like the Yankees, Red Sox, Mets, Dodgers, etc can pay while going way over the luxury tax.

 

[Steamy Ray Vaughn]

Its not about the teams at the top. Its about making sure you don't let the smaller franchises get to a point where they are incapable of ever competing because they don't have the means to spend at the rate of the others.

In baseball, sure you have some teams who aren't on the top tier of spenders going deep into the playoffs every year, but those teams who spend are always there. It puts a ceiling on what most franchises can do outside of a fluke run or getting unbelievably lucky in the draft. And even then, those teams lose all their players when their contracts run out because they can't afford the salaries that teams like the Yankees, Red Sox, Mets, Dodgers, etc can pay while going way over the luxury tax.

Again, very different sport. You can build a super team and win in baseball because chemistry and playmaking aren't an issue. You're not skating around the ice trying to make a play. You have one guy trying to hit a ball and one guy trying to strike him out. If the ball is hit, then it's a game of physics. Either someone can catch the ball before it hits the ground or they can't.

Hockey has so many more variables, a super team just doesn't guarantee you a win.

 

[LPHabsFan]

The cap is about revenue sharing, not about parity.

Incorrect. The cap is about cost certainty.

 

[Steamy Ray Vaughn]

Incorrect. The cap is about cost certainty.

That was implied but yes. Cost certainty and revenue sharing between players and owners and between smaller and bigger markets. Hard to share revenues if you have no system in place to track costs.

 

[Yukon Joe]

Because NTCs make things unfair. How is Winnipeg supposed to compete with around 33% percent of the league has them on their list? "Parity" is a ruse.

They compete the way they do compete - draft and develop, identify players who are willing to be traded there (or willing to waive their NTC). Paul Stastny waived his no-trade twice to come to Winnipeg. If you have a competitive team, and a player-friendly environment, you'll still be listed on some no-trade lists, but it doesn't make it impossible to compete.

I mean I know the Avs series hasn't gone the way the Jets wanted, but the team still finished 4th in the league, 2nd in the west so it's not like they aren't competitive.

 

[Melrose Munch]

They compete the way they do compete - draft and develop, identify players who are willing to be traded there (or willing to waive their NTC). Paul Stastny waived his no-trade twice to come to Winnipeg. If you have a competitive team, and a player-friendly environment, you'll still be listed on some no-trade lists, but it doesn't make it impossible to compete.

I mean I know the Avs series hasn't gone the way the Jets wanted, but the team still finished 4th in the league, 2nd in the west so it's not like they aren't competitive.

But will they ever have "that guy" a Matthews, a McDavid, a MacKinnon? The answer is probably not. McDavid plays for Edmonton, but he was drafted. He will probably leave when a UFA.

 

[Yukon Joe]

But will they ever have "that guy" a Matthews, a McDavid, a MacKinnon? The answer is probably not. McDavid plays for Edmonton, but he was drafted. He will probably leave when a UFA.

Well to get "that guy" you need to be lucky and not only get the #1 spot in the draft lottery, but win #1 in a year where the consensus #1 is a massive talent. Best Jets have done so far was #3 to get Laine (who they flipped for #2 in the same year PLD, and now both of whom seem to be pretty disappointing).

McDavid and Edmonton is a good example though - Edmonton also shows up on a lot of "no trade" lists, yet the Oilers signed McDavid to a long-term deal.

 

[Barclay Donaldson]

Because NTCs make things unfair. How is Winnipeg supposed to compete with around 33% percent of the league has them on their list? "Parity" is a ruse.

The nature of income tax makes things unfair. There are a multitude of things which make competing in the NHL as an organization unfair.

I think you're taking your eye off the ball by saying "might as well institute a luxury tax because things are already unfair" instead of saying "by nature there are things that are unfair, let's institute a (hard cap) system which makes things as fair as possible"

 

[KevFu]

And yet the NBA dwarfs over the NHL in terms of revenue, not even close. Hockey is such an exciting sport but the NHL under Gary Bettman has gone about it all wrong. People like seeing David beat Goliath, but nobody really cares about David versus Paper goliath.

Due respect, but I think you're completely silly if you think THAT'S the reason the NBA revenue dwarfs the NHL's. It's not "soft cap dominant teams" vs "hard cap parity" that's the reason.

The NBA as a league-wide, team-game, all-for-one enterprise is a GARBAGE PRODUCT. But the NBA selling STARS is a huge entertainment business.

- The best players in the NBA are on the court 90% of the time.
- The best players have the ball in their hands 75% of the time.
- SOMEONE has the ball in their hands 98% of the time, they're chasing it like 2 minutes per game total.
- Every fan knows where the ball is at all times.
- There's 5 guys per team on the floor most the time, and like 7-8 total guys playing the game.
- They don't wear helmets and you can see their faces.
- They're closer to the camera/action, you don't need jersey numbers to ID them.
- The best players are having like 25-30 chances per game to do something amazing that gets put on a poster.

Basketball is about the stars and NBA fans will watch the stars. It's a CELEBRITY business.
Hockey is a team game. Your team is tribalism and each team is a business.


You're not going to win more fans to hockey by making it more like basketball. (This is something Rob Manfred needs to learn). You sell hockey by showing people who like other sports what hockey has that's similar to what they love, and how it has other things that are above and beyond that. Hockey can be supplemental to the sport they're already passionate about, and then when they watch it, they realize "This is actually BETTER than what I love..." because you CAN'T take a knee in hockey, you can't hit a guy but never have to face getting hit yourself, it has drama like the end of a basketball game the entire game and not just in the last 20 seconds; It's fast and hard-hitting without being 2.5 hours of commercials during a 3 hour game, etc, etc.

 

[CTHabsfan]

The title of this thread should be "I root for a big-market team who can afford to spend a lot of money and I want to make it easier for them to win".

 

[patnyrnyg]

I am truly convinced that some people would be happy if the NHL was just a 4 team league of teams in Toronto, NY, Boston and Montreal because in an era of luxury tax those are really the only markets that would be able to outspend everyone every year.

Baseball is ruined with the same teams spending to win every year. Basketball is just as bad.

Hockey has it great because anyone can win any year, and with good management any franchise can be a contender within 5 years. Allowing bad management to buy their way out of mistakes won't make the NHL better.

Have you looked at which teams have won World Series the past 25 years? Dodgers for all their spending have won one since 1988 and that was in a short year. Yankees had the dynasty from 96-00 and have won once since.

As a Rangers fan, the salary cap has saved the Rangers from themselves!

 

[patnyrnyg]

Due respect, but I think you're completely silly if you think THAT'S the reason the NBA revenue dwarfs the NHL's. It's not "soft cap dominant teams" vs "hard cap parity" that's the reason.

The NBA as a league-wide, team-game, all-for-one enterprise is a GARBAGE PRODUCT. But the NBA selling STARS is a huge entertainment business.

- The best players in the NBA are on the court 90% of the time.
- The best players have the ball in their hands 75% of the time.
- SOMEONE has the ball in their hands 98% of the time, they're chasing it like 2 minutes per game total.
- Every fan knows where the ball is at all times.
- There's 5 guys per team on the floor most the time, and like 7-8 total guys playing the game.
- They don't wear helmets and you can see their faces.
- They're closer to the camera/action, you don't need jersey numbers to ID them.
- The best players are having like 25-30 chances per game to do something amazing that gets put on a poster.

Basketball is about the stars and NBA fans will watch the stars. It's a CELEBRITY business.
Hockey is a team game. Your team is tribalism and each team is a business.


You're not going to win more fans to hockey by making it more like basketball. (This is something Rob Manfred needs to learn). You sell hockey by showing people who like other sports what hockey has that's similar to what they love, and how it has other things that are above and beyond that. Hockey can be supplemental to the sport they're already passionate about, and then when they watch it, they realize "This is actually BETTER than what I love..." because you CAN'T take a knee in hockey, you can't hit a guy but never have to face getting hit yourself, it has drama like the end of a basketball game the entire game and not just in the last 20 seconds; It's fast and hard-hitting without being 2.5 hours of commercials during a 3 hour game, etc, etc.

The exact argument I make when people complain about the NHL not marketing their stars the way the NBA does. Lebron James plays the whole game (Although, I did go to pitt for rangers-pens when crosby was a rookie. Guys behind us did not understand why they kept taking Sidney off the ice and how players didnt automatically score on breakaways). The offense runs through Lebron every time down the court. Finally, even if he has a bad game (in his prime) he was still going to score at least 20 points. You can go to a Penguins game and see Crosby not score a goal, have an assist, or even get a quality scoring chance. That is not going to happen in basketball.

 

[Svechhammer]

Have you looked at which teams have won World Series the past 25 years?

World Series matchups since 2000

Yankees over Mets
Arizona over Yankees
Anaheim over SF
Marlins over Yankees
Red Sox over Cardinals
White Sox over Astros
Cardinals over Tigers
Red Sox over Rockies
Phillies over Tampa
Yankees over Phillies
SF over Rangers
Cardinals over Rangers
SF over Tigers
Red Sox over Cardinals
SF over KC
KC over Mets
Cubs over Indians
Astros over Dodgers
Red Sox over Dodgers
Washington over Astros
Dodgers over Tampa
Braves over Astros
Astros over Phillies
Rangers over Arizona

Of those listed, the only ones you can really say that weren't big spenders were Arizona (x2), Tampa (x2), KC (x2), Angels, White Sox, Rockies, and maybe the Marlins and Nationals. But even then, the Marlins were big spenders then, with Loria gutting the team immediately afterwards to be able to cut costs again.

But even then, you're talking about maybe 10-12 teams out of 50 who aren't big spenders in the World Series over the last 25 years. The big spenders absolutely have a leg up.

 

[Yukon Joe]

Of those listed, the only ones you can really say that weren't big spenders were Arizona (x2), Tampa (x2), KC (x2), Angels, White Sox, Rockies, and maybe the Marlins and Nationals. But even then, the Marlins were big spenders then, with Loria gutting the team immediately afterwards to be able to cut costs again.

But even then, you're talking about maybe 10-12 teams out of 50 who aren't big spenders in the World Series over the last 25 years. The big spenders absolutely have a leg up.

So I'm a big KC Royals fan for historical reasons.

I was absolutely entranced with their 2014 and 2015 seasons with back to back WS appearances, including winning in 2015.

But as a small market team their business model is to pretty much suck, hope that your prospects can all hit at the same time and then make a run for it. Because other than 2014 and 2015 they were never competitive in the last 25 years, which makes it kind of hard to be a fan.

 

[CTHabsfan]

Have you looked at which teams have won World Series the past 25 years? Dodgers for all their spending have won one since 1988 and that was in a short year. Yankees had the dynasty from 96-00 and have won once since.

As a Rangers fan, the salary cap has saved the Rangers from themselves!

The Dodgers made the playoffs in 2004, 2006, 2008, 2009, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020 (won the World Series), 2021, 2022 and 2023. The Yankees haven't won the World Series since 2009, but they did manage to make the playoffs in 2010, 2011, 2012, 2015, 2017, 2018, 2019, 2020, 2021 and 2022.

The Dodgers have only two below .500 seasons this century, while the Yankees don't have a single year without an above .500 record. How many small-market teams compare favorably?

 

[edog37]

As we know, Pittsburgh needs all the help they can get so people come...

This is patently false at this point. The cap is for cost certainty, not parity. As long as the NTCs and NMCs exist, the playing field will never be fair.

Pushing a false narrative doesn’t make it true. Plus, dont act like Chicago always sold out either. They were lousy before 2010

 

[mouser]

World Series matchups since 2000

Of those listed, the only ones you can really say that weren't big spenders were Arizona (x2), Tampa (x2), KC (x2), Angels, White Sox, Rockies, and maybe the Marlins and Nationals. But even then, the Marlins were big spenders then, with Loria gutting the team immediately afterwards to be able to cut costs again.

But even then, you're talking about maybe 10-12 teams out of 50 who aren't big spenders in the World Series over the last 25 years. The big spenders absolutely have a leg up.

Arizona was a big spender in 2001 when they won the World Series, 8th overall in the MLB. Splurged a lot of money on Randy Johnson and Curt Schilling among others.

 

[edog37]

When that player is McDavid, you deal with it. Despite the actual number being high, he’s still one of the best contract values in the league.

Those teams haven’t failed in the past because they’re overpaying the RFA guys that win Rocket, Hart, Norris trophies. It’s the other dudes in the middle that they aren’t getting sufficient value from. Nurse and Campbell combine to make more than McDavid. Those are UFA deals. That’s been their general issue and not really one deserving of a bailout.

McDavid’s & Draisatl’s contracts have hamstrung Edmonton. Their values are terrible.

 

[edog37]

I am truly convinced that some people would be happy if the NHL was just a 4 team league of teams in Toronto, NY, Boston and Montreal because in an era of luxury tax those are really the only markets that would be able to outspend everyone every year.

Baseball is ruined with the same teams spending to win every year. Basketball is just as bad.

Hockey has it great because anyone can win any year, and with good management any franchise can be a contender within 5 years. Allowing bad management to buy their way out of mistakes won't make the NHL better.

100%. Also, funny how the NFL gets by just fine & doesn’t have a luxury tax. It’s a non-starter for the NHL.

 

[tucker3434]

McDavid’s & Draisatl’s contracts have hamstrung Edmonton. Their values are terrible.

Are you joking?

 

[Leafsfan74]

I searched the forums and couldn't find anything recent where there was a discussion of this topic but I know it's been raised before. I think the NHL needs to institute a luxury tax on top of it's current salary cap system. I know already some will say that it shouldn't be done because it would "Hurt parity" but let's look at it like this:

Since the implementation of the cap, 12 different teams have won the Stanley Cup. Of those 12, 5 of them have won it multiple times. Markets like Vegas, Tampa Bay, Boston, Chicago, Los Angeles, Pittsburgh and Detroit have been the most successful and apart from LA, these were not the first time those teams touched the Cup. 11 teams have participated in a cup final without winning, so out of 32 teams, 25 of them have made it to the Cup final at least once. 2 teams have won back to back cups that being the Penguins and the Lightning.

There have been 18 seasons since the Cap was installed (this is currently the 19th underway). And in the 18 seasons prior, there are been 10 teams that won the cup. 11 different teams made the finals without winning at least once, so out of 30 teams (which was the number as of the year 2000) there had been 21 teams that have made it to the cup finals at least once. In those 18 years the NHL expanded from 21 to 30 teams. 2 teams won back to back cups in those 18 seasons the Penguins and the Red Wings.

The sport of hockey is not one that lends itself to Super team dominance given the number of team and the fact that chemistry plays a big part of it. If it were all about who spends the most money, we'd expect to see teams like Montreal, Toronto and New York win championship after championship, yet the last time that happened was in 1994, 30 years ago. If the problem was just big markets outspending the smaller ones, we'd be seeing a lot more of the same teams in the finals and winning championships. yet the numbers are very similar.

The idea of the cap (apart from controlling escalating salaries) was that it would allow more parity because teams wouldn't be able to sign their big stars and hence you'd see more superstars emerge in non-traditional markets, helping the game grow. However, what's actually happened is that because teams prioritize retaining their stars above all, it's lower level free agents that are hitting the market. Guys who are good players but not necessarily game changers on the levels of a McDavid, Matthews, Crosby and many others. If you didn't draft a superstar or can't swing a trade for one, you have to overpay to get these guys and so this inflates salaries all around the league. The cap isn't rising fast enough to meet demand and so you end up with some of the greatest players in the NHL not being able to reach the finals, much less touch Lord Stanley himself. This is a problem. Wouldn't it be great for the NHL if Connor McDavid could go on ESPN with the Stanley Cup? Or Auston Matthews?

I think the NHL should add a luxury tax on top of the salary cap. The idea would be that teams can go over the cap but pay a penalty equivalent to how much more they spend:

For the first 10% over the cap ceiling, it'd be a 100% equivalent penalty. Meaning if you are $4M over the cap, you must pay an extra $4M to the other teams in the league who didn't go over the cap. 10-25% would be 150%, 25-50% would be 200% and if you go over 50%, it's 500%+forfeiting your 2 next available 2 first round picks. The money would have to come out of ownership's profits, not Hockey related revenues. This is therefore extra money owners would have to pay.

This would allow big markets to retain their players IMO. It wouldn't hurt smaller markets because there's really only so much you can spend and as I've pointed out, spending more money doesn't mean you will win championships. It'd be a way to give the teams that have more money a bit more flexibility in building their rosters, possibly allow them to make the playoffs more often or stay in them a little longer. As for smaller market teams that can't go over the cap would get a way to be more competitive. It wouldn't hurt parity because there's many factors that go into a player choosing to sign with a team such as location, ice time, teammates, the organization and more.

I look at a team like the Leafs and they have 4 of the best offensive talents in the league but can't get out of the first round because their depth sucks. Leafs games in the playoffs bring in money not just in Toronto but everywhere as Toronto fans will travel to see the team. That means more revenue in the league pie and the cap can rise thus making the Luxury tax a bonus.

I think the current system hasn't really worked in making the overall game better. Given that there's only so much top talent and so much ice time, there will always be parity. How about just giving your biggest markets a little shot in the arm given they already have to finance other teams?

What hockey fans don't understand is that the Luxury Tax would benefit the smallest market teams. You take the money the Leafs will overspend, a franchise that couldn't win the Cup anyways when they could spend a Billion a year on salaries before the Cap; and divide that money among the have-nots. Maybe a team such as Arizona or even Buffalo could benefit from this.

Cap scenarios are not real-world. I believe in the free market, limited regulations. In this case, a small market team can and will be more viable. In the past the Leafs spent gobs of money but didn't need to pay a tax to do so to assist other teams (unless my memory is incorrect), now they will have to.

Look at baseball and the success of teams even if they don't have the highest payroll. Hockey was far more intense rivalry wise and players will be on the move far more often, big trades more likely. That keeps the sport fresh