Levitt: solution "obvious"

Discussion in 'Fugu's Business of Hockey Forum' started by NYVanfan, Oct 21, 2004.

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  1. NYVanfan

    NYVanfan Registered User

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    Last edited by moderator Buffaloed: Oct 21, 2004
  2. Taranis_24

    Taranis_24 Registered User

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    My take. If it's so obvious and he's this credible type (and I'm not suggesting he isn't) then why not make a suggestion on how the best way to get past this might be?
     
  3. fan mao rong

    fan mao rong Registered User

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    I don't see where your characterization of what Levitt said applies. I see nothing about middle ground in the article. Levitt says it is obvious what needs to be done and a limited # of ways to do it. He does not say the middle ground is obvious. He only mentions not talking about salary caps. If one puts stock in what Levitt says, the question is what does he include in the limited # of ways to do what needs to be done. A salary cap, I believe, would be one, so what does Levitt beleive any other way to do it would be?
     
  4. Volcanologist

    Volcanologist Used Register

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    K, thanks a bunch then Art...
     
  5. NYVanfan

    NYVanfan Registered User

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    "Don't talk [salary] caps because that closes down the discussion," said Levitt. "It is pretty obvious what has to be done and there are a limited number of ways to do it."

    Seems pretty clear to me. His implication is that the harp cap as non-negotiable for both sides is the one that that's keeping them from the bargaining table. Remove that barrier and everything else is on a sliding scale and can be worked. I believe if the owners were to budge on that point the players would have to give a lot of concessions on everything else.
     
  6. NYVanfan

    NYVanfan Registered User

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    I think he means its all about the hard cap.

    If the owners were to remove that from the discussion, could be very much harball with everything else...
     
  7. fan mao rong

    fan mao rong Registered User

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    Well, without the hard cap there is no real way to control salaries, I say, despite what is heard on here. The players have really offered nothing that would even effect salaries, let alone slow the payroll growth, except perhaps for the high end of the large revenue teams. Any luxury tax that actually effects things , I believe, will be termed a cap dressed up as a tax by the NHLPA and rejected as a cap. And the taxes they proposed ( 5% tax on the amount overage in payrolls above 40 million, and a 10% tax on the overage on payrolls above 50 million ) would not inhibit any spending. Even taking the 10% model, if a team decide to exceed the 50 million threshold and go to 60 million they pay a whopping 1 million dollar penalty on the amount from 50 to 60 million, or a 60 million payroll can be had for a total payout of 61 million. Who will that dissuade? If I remember right at 60 million the tax jumps to a 20% rate, so a 70 million payroll will include 3 million in taxes, or 70 million in payroll for a total of 73 million. If a team is willing to have a 70 million payroll another 3 million will not dissuade them. 80 miillion Payroll? I say, after tax is jumped to 30% from 70 to 80 million, would cost 86 million for an 80 million payroll. Now there's the inhibiting factor. Teams might hesitate a bit before going to an 80 million payroll. But, seems to me the highest payroll figure I seen in the league was the Rangers at 80 million, so I don't think there's a whole lot of salary rollback there. And the lower end teams will have to match offers to keep their good players, regardless of what people on here say. If a team's best players leave, the money lost from decreased attendance would probably exceed the cost of overpaying those players. I say, ownership has stated what they need to continue operating, that should be the determining factor. Since the CBA expired they are no longer required to lose money. Why should they? Say a business lost 30 million in a year. They request to be able to make a 10 million dollar profit. The other side says we'll compromise, meet you half way, you'll only lose 10 million under our plan. That may seem like a reasonable compromise to outsiders. But, why would someone work all year just to be another 10 million in debt when they don't have to?
     
  8. Motown Beatdown

    Motown Beatdown Need a slump buster

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    If you have a 100% on every dollar over 40 million it would control a lot. I dont think Mike Illitch would want to pay an extra 37 million at the end of the years. So that 77 million dollar payroll would be 107 million. Especially when the belief is thatt he is already losing money at 77 million dollars.


    The question is would the NHLPA agree to that stiff of a tax? I dont think so.
     
  9. dawgbone

    dawgbone Registered User

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    They wouldn't even consider it.

    I doubt they'd look at anything over 30% on $40mil.
     
  10. copperandblue

    copperandblue Registered User

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    Isn't that what their initial offer included? If so, I would have to think that the PA would both expect and would be willing to see it go up from 30% as part of the negotiations.

    I agree that a dollar for dollar tax would probably be a deal breaker though.
     
  11. Toonces

    Toonces The beer kitty

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    Pick up a phone perhaps?

    I understand they are refering to a starting point contract wise, but right now they arn't even talking to each other.

    :banghead:
     
  12. shadoz19

    shadoz19 Registered User

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    It was 30% on payrolls over $50 million.
     
  13. Papadice

    Papadice Registered User

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    The NHLPA has already gone on record as stating that they will not accept any luxury tax that is so restrictive that in nature it serves as a form of a cap... They aren't willing to accept anything remotely close to what the owners need... :banghead:
     
  14. fan mao rong

    fan mao rong Registered User

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    I don't know where this comes from. The tax, which I got from an E.J. Hradek story on ESPN (the website) shortly after the offer was made, the 2nd player offer would tax the amount over the threshold of 50 million at a rate of 10%. The 30% deal you refer to wouldn't have kicked in until a threshold of 70 million was exceeded. The 1st player offer had a threshold of 40 million and started at a 5% rate of the amount exceeding the threshold. The 2nd offer was 10 % of the amount of payroll from 50 million to 60 million, 20 % of the amount of payroll from 60 million to 70 million, and 30 % of the amount of payroll from 70 million up. If a team wanted to pay out 70 million in payroll they'd pay an extra 3 million. At today's labor rate about the same as adding an average player, maybe a Chris Therien. That wouldn't inhibit a team willing to pay a 70 million payroll. Maybe it might inhibit them from going up to 80 a bit, but those types of payrolls have been rare in the past, and would probably get rarer due to the revenue shrinkages. So these are not much in the way of offers.
     
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