Little fella says no to luxury tax

[YellHockey*]

Well recently I'd say guys like Hasek or Cujo or even Whitney. Lidstrom when he re-signed stands out. Hatcher. These are certainly the more recent signings.

Then you are clearly ignorant about how the CBA works.

Unrestricted free agents' contracts have no effect on any other contract in the NHL.

The Red Wings haven't caused any salary escalation in the NHL and for you to suggest it is assinine.

 

[Motown Beatdown]

Part of what makes your position mistaken is the idea that particularly Detroit and Philadelphia are working in markets that would yield the same kind of revenue as most any other NHL market. if each of the 30 NHL markets reached their revenue maximum, Detroit and Philly would more than double the revenue of more than half the teams in the league.

What you are basically saying is that because the Red Wings and Flyers got into the league early and got the best markets that they should have a spending advantage over teams that came later and had to take smaller markets.

But thats not really true, Detroit hockey was dead when Illitch bought the team in 82. He resorted to giving away cars to get people in the stands. The old joke in Detroit was someone stole my left but left my Red Wings tickets on the curb.

 

[Brent Burns Beard]

What you are basically saying is that because the Red Wings and Flyers got into the league early and got the best markets that they should have a spending advantage over teams that came later and had to take smaller markets.

thats correct .. its just logical that a market like DET which has been developed for over 50 years provides more revenue than a new market like NSH. Why should NSH have in 5 years what it has taken DET 75 years to get ?

not only that, but the great thing about the NHL is that a spending advantage does not translate into a winning advantage.

so who cares if DET can spend more than NSH, it doesnt do anything but cause Mike Illitch to lose money. boo hoo.

DR

 

[SENSible1*]

not only that, but the great thing about the NHL is that a spending advantage does not translate into a winning advantage.
DR

Answer me this.

With the Leafs dismal drating and development for most of the past 10 years, how were they able to transfer themselves from playoff possibilty to playoff lock and cup contender?

Wouldn't have anything to do with their pocketbook, right?

Keep burying your head in the sand if you like, but the rest of us will choose to deal in reality.

 

[Brent Burns Beard]

Answer me this.

With the Leafs dismal drating and development for most of the past 10 years, how were they able to transfer themselves from playoff possibilty to playoff lock and cup contender?

Wouldn't have anything to do with their pocketbook, right?

Keep burying your head in the sand if you like, but the rest of us will choose to deal in reality.

yup .. look at all those banners for TOR. sure has translated into on ice success.

dr

 

[txpd]

But thats not really true, Detroit hockey was dead when Illitch bought the team in 82. He resorted to giving away cars to get people in the stands. The old joke in Detroit was someone stole my left but left my Red Wings tickets on the curb.

The fact that Detroit in the 80s or present day Chicago are underperforming NHL markets is not the point. The point is that markets like Edmonton, New Jersey, Washington, Ottawa and others can max out their revenue earnings potential in their markets and only be 50%-60% at the revenue maximum for Detroit and Chicago. For instance if the Rangers were managed as poorly in 24 markets as they have been the last 10 years in NYC, they might be bankrupt by now. but their market is so big that even with a terrible hockey team they are able to remain in the top 5 in revenue every year. the rangers worst performance starts out better than the best case scenario of 15 to 18 NHL teams.

Same goes for Detroit. their worst case revenue scenario ranks ahead of 10 to 15 NHL team's best case revenue scenario. that is all about market capacity. Detroit is a maximum $150m annual revenue market(a random number chosen for conversational purposes) while the bottom half of the nhl max's out at no more than $75m. That means that if the Wings only sell 50cents on the dollar in a given year, they have already made more money than several teams that have drained every dollar out of their market.

 

[Brent Burns Beard]

The fact that Detroit in the 80s or present day Chicago are underperforming NHL markets is not the point. The point is that markets like Edmonton, New Jersey, Washington, Ottawa and others can max out their revenue earnings potential in their markets and only be 50%-60% at the revenue maximum for Detroit and Chicago. For instance if the Rangers were managed as poorly in 24 markets as they have been the last 10 years in NYC, they might be bankrupt by now. but their market is so big that even with a terrible hockey team they are able to remain in the top 5 in revenue every year. the rangers worst performance starts out better than the best case scenario of 15 to 18 NHL teams.

Same goes for Detroit. their worst case revenue scenario ranks ahead of 10 to 15 NHL team's best case revenue scenario. that is all about market capacity. Detroit is a maximum $150m annual revenue market(a random number chosen for conversational purposes) while the bottom half of the nhl max's out at no more than $75m. That means that if the Wings only sell 50cents on the dollar in a given year, they have already made more money than several teams that have drained every dollar out of their market.

well, this has nothing to do with the players. if the owners would like to share revenue so that all are equal markets, they are free to do so.

its a non issue.

dr

 

[txpd]

thats correct .. its just logical that a market like DET which has been developed for over 50 years provides more revenue than a new market like NSH. Why should NSH have in 5 years what it has taken DET 75 years to get ?

not only that, but the great thing about the NHL is that a spending advantage does not translate into a winning advantage.

so who cares if DET can spend more than NSH, it doesnt do anything but cause Mike Illitch to lose money. boo hoo.

DR

how many years should nashville be in the NHL before they should be allowed to compete for a championship??

you say, "not only that, but the great thing about the NHL is that a spending advantage does not translate into a winning advantage." who told you that? a spending advantage in the NHL is just about required in order to win. where have you been?? in the last 10 years, only tampa bay has won the stanley cup from outside the top 10 in payroll. in fact most of those ten cups went to teams solidly in the top 5 in payroll, Detroit, Colorado, Dallas. You may choose any of the low budget cinderella teams that made the finals only to loose in the period, Carolina, Anaheim, Washington, Calgary and you will find where the winning advantage is with a bigger payroll. Detroit Colorado and Dallas havent won the cup every year, but among them only missed the playoffs once. Carolina has no made the playoffs since they made the finals. Same with Anaheim and Washington only once. Calgary had to miss the playoffs seven straight seasons before last season.

thats a clear winning advantage for the team with money.

 

[txpd]

well, this has nothing to do with the players. if the owners would like to share revenue so that all are equal markets, they are free to do so.

its a non issue.

dr

what it has to do with is why the nhl needs a salary cap.

 

[Brent Burns Beard]

how many years should nashville be in the NHL before they should be allowed to compete for a championship??

you say, "not only that, but the great thing about the NHL is that a spending advantage does not translate into a winning advantage." who told you that? a spending advantage in the NHL is just about required in order to win. where have you been?? in the last 10 years, only tampa bay has won the stanley cup from outside the top 10 in payroll. in fact most of those ten cups went to teams solidly in the top 5 in payroll, Detroit, Colorado, Dallas. You may choose any of the low budget cinderella teams that made the finals only to loose in the period, Carolina, Anaheim, Washington, Calgary and you will find where the winning advantage is with a bigger payroll. Detroit Colorado and Dallas havent won the cup every year, but among them only missed the playoffs once. Carolina has no made the playoffs since they made the finals. Same with Anaheim and Washington only once. Calgary had to miss the playoffs seven straight seasons before last season.

thats a clear winning advantage for the team with money.

- good teams cost money, its no suprise high payroll teams win. duh.
- CGY has had some of hte worst managment in the NHL in the last 10 years, they should be losing money and games. the CBA didnt make them give away MArtin St Louis and JS Giguere. The CBA didnt make them draft Tkazchuk, Fata, Sunbland and Dingman. The CBA didnt make them give Roman Turek a 16m dollar deal. The CBA in fact helped them ! If there was a cap, COL would never have given them Regehr for Fleury and DAL wouldnt have given them Iginla for Neiwendyk.

DR

 

[Brent Burns Beard]

what it has to do with is why the nhl needs a salary cap.

a salary cap does not give NSH more revenue or equal revenue to DET. It just means DET, NYR, TOR and PHI put more of their revenue into their own pockets.

problem of revenue disparity is not solved.

dr

 

[SENSible1*]

yup .. look at all those banners for TOR. sure has translated into on ice success.

dr

Measuring on-ice success by banners alone is foolish.

The simple fact, that you would prefer to ignore, is that a spending advantage can be used to translate into an on-ice advantage, even if the team is run poorly from a drafting/players development perspective.

You can advance your case much further by simply admitting that the advantage is real, but overstated. Then again, that would imply that you'd have to stop spouting rhetoric and start dealing in reality.

 

[Beukeboom Fan]

a salary cap does not give NSH more revenue or equal revenue to DET. It just means DET, NYR, TOR and PHI put more of their revenue into their own pockets.

problem of revenue disparity is not solved.

dr

I hate to say it, but I think that I've been converted by the dark side! (The NHLPA is your father!)

To be effective, a hard cap will have to have SUBSTANTIAL revenue sharing, which will be more painful to owners than a harsh luxury tax.

What is the problem with the Av's paying their players $55M in salaries, paying $15M into a pool of funds to be distributed to the teams under the luxury tax limit, and having paying a total of $70M for payroll if they chose? If 6 teams do that, that is $90MM in revenue that will be redistributed to teams below the cap, which is pretty substantial IMO.

 

[Brent Burns Beard]

I hate to say it, but I think that I've been converted by the dark side! (The NHLPA is your father!)

To be effective, a hard cap will have to have SUBSTANTIAL revenue sharing, which will be more painful to owners than a harsh luxury tax.

What is the problem with the Av's paying their players $55M in salaries, paying $15M into a pool of funds to be distributed to the teams under the luxury tax limit, and having paying a total of $70M for payroll if they chose? If 6 teams do that, that is $90MM in revenue that will be redistributed to teams below the cap, which is pretty substantial IMO.

exactly .... the NHL says a luxury tax isnt the answer. well then the question must not be revenue disparity.

secondly, if a luxury tax is going to work, it cant be too strict. if its to strict that not one exceeds it, then how does it help the low revenue teams if there is no luxury tax to share ?

dr

 

[tantalum]

exactly .... the NHL says a luxury tax isnt the answer. well then the question must not be revenue disparity.

secondly, if a luxury tax is going to work, it cant be too strict. if its to strict that not one exceeds it, then how does it help the low revenue teams if there is no luxury tax to share ?

dr

revenue disparity is one issue that leads to unreasonable salary growth. it isn't the ONLY factor. As well a luxury tax in does not guarantee an end to 1) revenue disparity and an even playing field and 2) "guarantee" we'll see a limit to inflationary contracts.

If the luxury tax is too strict, the threshold reasonable and no one exceeds it then everyone is on the same playing field. I.e. a cap.

 

[Motown Beatdown]

revenue disparity is one issue that leads to unreasonable salary growth. it isn't the ONLY factor. As well a luxury tax in does not guarantee an end to 1) revenue disparity and an even playing field and 2) "guarantee" we'll see a limit to inflationary contracts.

If the luxury tax is too strict, the threshold reasonable and no one exceeds it then everyone is on the same playing field. I.e. a cap.

Can't there be both though? Revenue sharing thru a luxury tax and revenue sharing thru ticket sales and local TV and Radio sales?

If a luxury tax lowes payrolls who can argue against it? Now we dont know if it will happen but i do expect it will curb some spending. Under the newest proposal (if true) Mike Illitch would have to shell out over 100 million dollars on payroll and taxes. There's no way in hell he would do that.

 

[tantalum]

Can't there be both though? Revenue sharing thru a luxury tax and revenue sharing thru ticket sales and local TV and Radio sales?

If a luxury tax lowes payrolls who can argue against it? Now we dont know if it will happen but i do expect it will curb some spending. Under the newest proposal (if true) Mike Illitch would have to shell out over 100 million dollars on payroll and taxes. There's no way in hell he would do that.

Of course their can be both no one has said any different. In fact pretty much everything the NHL and the "supporters" of the NHL have said is that there needs to be increased revenue sharing. The amount is open to negotiation. If the players want to see major sharing like the NFL that would be a major concession on the owners part. They would have to respond in kind and make a major concession. A simple luxury tax with no relation to percentage of revenues that does not float with the health of the league is not that concession. A cap like that in the NFL is that concession.

The fact that you also say that you don't know how it will curb spending is EXACTLY the leagues point in a luxury tax that essenitally has an arbitrary value assigned to it and there is no upper limit to payroll. You can't really predict what a plain luxury tax system is going to do and the owners at this time don't feel they can gamble on that unknown when other sports have managed to negotiate a share of revenues with their players. Now a truly punitive tax (and 0.75 is getting there but it is still too short) would act like a cap (again the players have said they won't accept that) but let's pretend they think it does function as a cap and the players believe it would. Why the aversion to setting a high payroll hard cap on top of that if that's the case?

Is this a good proposal from the players? No I don't think it is as it doesn't address the major issues as well as they should be addressed IMO. I think this is an attractive on the surface offer by the players designed to try to get some owners to start breaking ranks. I don't think it'll work. I do think the NHL would be silly to be the ones to walk away from the table and to dismiss this outright. It is a start and now that the players ahve proposed something reasonably significant in the tax aspects the league has a much easier time looking at the union and saying "we believe that your $45 mil threshold is too low and we'd like to see it at $40 mil. But we want to define that $40 mil as XX% of our revenues. That way in three year the threshold may be $50 mil if our sport grows." The players should be looking at that percentage and locking that in and negotiate the revenues...after all according to them the revenues are much higher than reported so that xx% will lead to a threshold more than $40 mil (of course in actuality I believe the NHLPA has no real problem with the NHL numbers hence why they've moved away from that argument instead switiching to the free marketplace strategy).

 

[Motown Beatdown]

The fact that you also say that you don't know how it will curb spending is EXACTLY the leagues point in a luxury tax that essenitally has an arbitrary value assigned to it and there is no upper limit to payroll. You can't really predict what a plain luxury tax system is going to do and the owners at this time don't feel they can gamble on that unknown when other sports have managed to negotiate a share of revenues with their players. Now a truly punitive tax (and 0.75 is getting there but it is still too short) would act like a cap (again the players have said they won't accept that) but let's pretend they think it does function as a cap and the players believe it would. Why the aversion to setting a high payroll hard cap on top of that if that's the case?

Wouldn't a little common sense on the part of the NHL show this type of tax would work. If the Wings are losing 16 million dollars on a payroll of 77 million add another 27 million dollar worth of tax penalty on top of that. I think we all know he would trim payroll, i know Illitch loves to win, but is it worth losing 43 million dollars a year? Same can be said for all the team well over that 40 million dollar mark. I bet there are owners willing to lose 5-10 million dollars at the chance to win a cup, but would they fell the same if that cost was 30-40 million dollars a year?

 

[hockeytown9321]

Hmm... I believe you intentionally try and find anyway to disagree with people who you deem to hold a different opinion than your own.

First, maybe you should read my post about Germany again, because you don't seem to understand what I wrote. Perhaps I wasn't very clear. It relates to the effects of the "punishment" Germany recieved for attacking it's neighbours. Since you seem to equate it with something rather spurious, I thought it worth commenting on. But rereading your post, the comment is rather off the cuff, and it's not really totally clear what you intended by it. Anyhow, no big deal.

Second: A poster said that New York and Detroit were responsible for inflating salaries. You responded to that post with a comment about Detroits drafting ability. I pointed out that your post didn't deal with the posters comment. Now you come back talking about Bettman, his cap and your own.

I'm stating that you answer peoples posts with comments that have little or nothing to do with what they wrote. It's really annoying, because one never gets a chance at resolving what's being discussed.

If you disagree with his point that the Rangers and Detroit are responsible for rising salaries, then let us know why. Please don't come back with indignant comments about something unrelated, such as their drafting, or the players wives or how Bettman is a troll.

Very simple.

Of course I disagree with people who have a different opinion than mine. If they disagree with me, they're obviously wrong. Please do note the sacrasm.

I've argued nicely for months. some people don't care for facts and see things the way they want to see them.

I presented my cap proposal not because its what I want, but to prove a point. Everyone says the league is being reasonable in their different cap offers and that a cap is necessary. My point was that if the PA came to the league with my offer, do you think the league would take it? If you do, then the arguments about Bettman caring about competitive balance are out the window. If you don't, then how could you say the league is willing to compromise?

If I ignore people's comments, its because they are so irrational that they don't deserve argument. But by nature, if I read something so irrational, I have to point it out.

the final word on Germany. I did read what you wrote, I understand the argument. But my point was not about the effects the punishments had on Germany but the fact that they were punished. Sorry if that was unclear.

 

[tantalum]

Wouldn't a little common sense on the part of the NHL show this type of tax would work. If the Wings are losing 16 million dollars on a payroll of 77 million add another 27 million dollar worth of tax penalty on top of that. I think we all know he would trim payroll, i know Illitch loves to win, but is it worth losing 43 million dollars a year? Same can be said for all the team well over that 40 million dollar mark. I bet there are owners willing to lose 5-10 million dollars at the chance to win a cup, but would they fell the same if that cost was 30-40 million dollars a year?

Would the union guarantee it would work? That no team will spend more than $xx million in payroll? That that tax room won't be used to unreasonably prop up player values and affect the rest of the league? They wouldn't as they wouldn't guarantee the "savings" in their last two offers. That's the problem with a simple luxury tax from the owners point of view. 5 years ago perhaps they accept that and see if it works and move from there. Right now the league does indeed need a SURE fix (whether you believe Levitt or Forbes or whoever) not something that MIGHT work. Like it or not soem owners get stupid and the players are going to pay the price in guarding against that stupidity. ON the flipside the players most likely get to keep all 720 well paying jobs and not lose a 200-300.

 

[hockeytown9321]

Wouldn't a little common sense on the part of the NHL show this type of tax would work. If the Wings are losing 16 million dollars on a payroll of 77 million add another 27 million dollar worth of tax penalty on top of that. I think we all know he would trim payroll, i know Illitch loves to win, but is it worth losing 43 million dollars a year? Same can be said for all the team well over that 40 million dollar mark. I bet there are owners willing to lose 5-10 million dollars at the chance to win a cup, but would they fell the same if that cost was 30-40 million dollars a year?

Alot of people have a misconception on the Red Wings payroll. Last year had very abnormal circumstances due to Hasek. If the season were going on, the RedW ings would be around $65 million.

I don't think they ever intend of having a payroll over $70 million again, probaly closer to $60 milllion. If there's a 100% tax starting at $40 million, the most they'd spend is $50-55. Even if thats still on the high end, the imaginary competitive balance will be closed alot.

 

[Motown Beatdown]

Like it or not soem owners get stupid and the players are going to pay the price in guarding against that stupidity. ON the flipside the players most likely get to keep all 720 well paying jobs and not lose a 200-300.

I agree with that, but like i posted in another tread owners will find a way around the cap. The NFL hard cap is 80 million dollars. But because of loopholes the Redskins are paying around 110 million dollars this year (signing bonus included) Now it will come back to bite the skins in the arse in the long run but it shows it can happen.

In the NBA the soft cap is set around 44 million dollars, but take a look at what the teams payrolls truely are...

http://www.hoopshype.com/salaries.htm

 

[PecaFan]

I agree with that, but like i posted in another tread owners will find a way around the cap. The NFL hard cap is 80 million dollars. But because of loopholes the Redskins are paying around 110 million dollars this year (signing bonus included) Now it will come back to bite the skins in the arse in the long run but it shows it can happen.

In the NBA the soft cap is set around 44 million dollars, but take a look at what the teams payrolls truely are...

http://www.hoopshype.com/salaries.htm

Yup. 25 out of 30 teams in the NBA over a $44 million cap. Caps simply don't work. Teams that want to spend will spend.

And that's why the NHLPA is insane to be fighting this. Give the owners their cap, then start raking in the bucks when they stupidly overspend.

 

[quat]

Then you are clearly ignorant about how the CBA works.

Unrestricted free agents' contracts have no effect on any other contract in the NHL.

The Red Wings haven't caused any salary escalation in the NHL and for you to suggest it is assinine.

For you to suggest that the Red Wings don't bear some responsibility for the escalation of player contracts is beyond assinine.

Prices paid to players defines the market. If you want a player Detroit has their eye on, you've got to out bid them. Gee, that's really difficult to understand. Why do you think the NHLPA is happy to post UFA player salaries? OH, because they have no effect on anything. riiiight. Why not actually think about things outside your little tiny box, it might actually help you understand how the world functions.

 

[hockeytown9321]

For you to suggest that the Red Wings don't bear some responsibility for the escalation of player contracts is beyond assinine.

Which ones?