My CBA proposal

[MS]

I haven't seen anyone else do anything in detail, so I'll give it a shot. I think the first thing that has to be done is to set goals of what is wanted from the agreement, and then set out ways to try and achieve those goals.

Goals

1) Target average salary of $1.6 million, target average team payroll of $38 million. This represents about the half-way point between the owners' proposed $1.3 million/31 million and the current situation at $1.9 million/$44-45 million. It would immediately generate savings of $180-210 million for the owners, almost completely covering the $224 million in claimed losses in 2003-04.

2) Protect the nature of team-building and organization-building. I think fans like that teams build in cycles, and that rosters are relatively consistent. A quality league should have both elite teams and rebuilding teams, and hard caps prevent that. I don't think the NFL system of having 30 nearly identical rosters, massive player movement every year, and no ability to maintain a great team is a good thing for hockey. Teams like Ottawa and Vancouver, quality-run organizations in medium-sized markets, would have had their talent level pillaged over the past two seasons had a hard cap in the $31 million range been in place, and teams that had trouble developing their own talent would have profited from it. Is that really fair? I think the NHL as we know it is a quality product and the league doesn't need a facelift, just a way to stabilize salaries 15-20% below current levels.

3) Accepting that not every team will make a profit, and that not every team deserves to make a profit. 4 or 5 organizations have huge problems far outside the sphere of the CBA, and need to get their s*** in order before they deserve to be turning a profit. Teams knowing that they have a guaranteed profit in store also lowers the incentive to put out a quality product for fans to enjoy. 80-85% of teams making a profit is a healthy league.

Proposals

1. Luxury Tax

a) i) payrolls under $38 million are untaxed
ii) payrolls $38-43 million are taxed $.50 for every dollar over
iii) payrolls $43-48 million are taxed $1.00 for every dollar over
iv) payrolls $48 million + are taxed $2.00 for every dollar over
ie. a team choosing to run a $50 million payroll will pay $11.5 million in tax
a team choosing to run a $44 million payroll will pay $3.5 million in tax

b) there is a one-time adjustment 3 years into the CBA to ensure the tax is having the desired effect. For every $100 000 the average salary is above or below the $1.6 million target, basic tax levels change by $1 million.

c) the tax changes year-to-year based on growth of total hockey revenue league-wide. For every increase or decrease in league revenues of $100 million relative to 2003-04 numbers, the basic tax levels change by $1 million.


2. Revenue Sharing

a) there is a salary floor of $30 million. Teams may choose to spend under this amount, but if so forfeit any claims to shared revenue. Likewise, teams with payrolls over $38 million have no claim on this revenue.

b) 3% payroll tax on all player salaries. If the average player salary levels at $1.6 million as expected, this will generate approx. $30-32 million to be dispersed.

c) total pool of money (luxury tax + payroll tax) to be distributed amongst those teams with payrolls between $30-38 million having the lowest revenue streams. This combined pool would probably total $50-60 million dollars.

3. Entry-level salaries

a) all players entering the league, regardless of age and draft position, are given identical 4-year contracts, as follows:

i) any player who has yet to be on an NHL roster for 50 games in one season - $500 000 base salary
ii) any player who has been on an NHL roster for over 50 games in one season - $600 000 base salary
iii) any player who has been on an NHL roster for over 50 games in two seasons - $700 000 base salary
iv) any player who has been on an NHL roster for over 50 games in three seasons - $800 000 base salary

ie. a player turning pro at age 20 who spends the majority of his first season in the AHL, then the following 3 seasons in the NHL would earn his AHL salary the first year, then $500 000, $600 000, and $700 000 the succeeding 3 years.

b) all entry-level contracts are two-way contracts, and become one-way contracts when the player has completed 2 NHL seasons

c) clubs may walk away from any player who has played less than 10 NHL games in the first two years of his contract, making that player an unrestricted free agent. (teams should not have to make a 4-year commitment to every failing prospect - otherwise farm teams would become too crowded).

d) bonuses may be achieved for reaching a variety of targets (similar to now). No bonus may exceed $100 000, bonuses may not be connected, and bonuses may not more than double the base value of the contract.
ie. A player in the first year of his contract who hits 8 bonuses would be paid the maximum $1 million, double his 500k base salary.

4. Unrestricted Free agency

a) all players first become unrestricted 12 years after they are first eligible for the NHL Entry Draft, regardless of when they were selected.
ie. a player born June 1, 1975 would be first eligible to become an UFA on July 1, 2005.
a player born November 1, 1975 would be first eligible to become an UFA on July 1, 2006.

b) players age 24+ who have played less than 40 NHL games, and players 25+ who have played less than 80 NHL games also become UFAs at the completion of their contracts.

5. Restricted Free Agency

a) teams must present a qualifying offer representing 80% of the base value of the final year of the player's previous contract, or the player becomes an UFA.

6. Arbitration

a) high-low system - arbitrator must choose either the player's offer or the management offer. If the player offer is chosen, management has the right to walk away, making the player an UFA.

b) either the team or the player can select to go to arbitration.

c) players may go to arbitration no more than twice in their career.

7. Entry Draft

a) players drafted from North American club teams are property of their organization for 5 years, and players drafted from European club teams are property of their organization for 10 years. Players attending college have their rights maintained 2 full seasons following their final collegiate action, if it is more than 5 years after the player is selected.

b) NHL clubs must present an offer of a standard entry-level contract to any draft pick inside of two years of his selection, or that player becomes an UFA. If the player does not agree to the contract, the team must present an offer in each succeeding year to maintain the player's rights for the full 5-season maximum.

__________

What it accomplishes:

1) Covers almost exactly the $224 million in claimed losses last year - cuts $180-210 million in payroll, and raises an additional $30 million in payroll tax.

2) Addresses revenue-sharing and provides a substantial amount of money to be shared amongst well-run organizations with low revenue streams

3) Addresses problems with entry-level contracts, qualifying offers, arbitration, and draft loopholes.

4) Preserves the nature of the game as we know it.

5) Ensures that the vast majority of NHL clubs turn a profit.

Fire away.

Click to read more...

 

[degroat*]

A luxury tax will not fix the problems in the league, which is exactly why the owners are not accepting one.

The only way it would help is if the tax is so strict that it was virtually a cap... and that wouldn't be accepted by the union.

 

[MS]

A luxury tax will not fix the problems in the league, which is exactly why the owners are not accepting one.

The only way it would help is if the tax is so strict that it was virtually a cap... and that wouldn't be accepted by the union.

And exactly why wouldn't a medium-stiff luxury tax fix most of the league's problems?

A luxury tax is the only way to solve this. Players will never accept a hard cap, owners will never accept an open free-market system. A luxury tax is the only middle ground, and the players have shown they're willing to negotiate on this front. The only way this will ever be solved is by using a luxury tax to drag the league average salary to somewhere in between the $1.3 and $1.9 million numbers each side is proposing at this point. And it should be easily doable, if both sides are willing to negotiate.

If you're going to dump on my proposal, at least explain why it wouldn't work for the league, and why most teams wouldn't be making money under this system.

 

[me2]

It contains 2 mandatory elements I like: owner initiated arbitration & 80% qualifiers. Any CBA without a hard cap is going to need these otherwise owners can not lower salaries in bad years. Salary setting needs to be a 2 way street.

Also RFA players that have been released shouldn't become UFAs, they should go back into the draft. Hold the draft after July 1 and that works out. This keeps pressure on RFA salaries.

 

[me2]

And exactly why wouldn't a medium-stiff luxury tax fix most of the league's problems?

Because its a defacto salary cap. The NHLPA only want a weak luxury tax. Under your system you have set an effective hard cap at $48m. I can't see too many teams delving deep into the $2 for $1 range, thats just too heavy a penalty. I like it, the players wouldn't.

 

[Sotnos]

I see where you're going with this (I think), but it seems that it will take a long time for player salaries to come down, since the only type of reduction that's going on is with the entry level contracts and the RFAs.

Just to throw out the team I support as an example, Tampa's projected payroll for 04-05 is around $40mil already without St. Louis signed. The team reportedly made a profit of $3+ mil last year, and that's with an almost full slate of playoff games. First time they've turned a profit in 5 years (again, reportedly). With this plan, Tampa would be paying out money what little money they might make to be distributed to teams that hit the narrow window between $30-$38 mil.

I can see how this would help over the long term, but over the short term, it doesn't sound like something the owners would agree on. If I'm missing something, let me know, please.

 

[MS]

I see where you're going with this (I think), but it seems that it will take a long time for player salaries to come down, since the only type of reduction that's going on is with the entry level contracts and the RFAs.

Just to throw out the team I support as an example, Tampa's projected payroll for 04-05 is around $40mil already without St. Louis signed. The team reportedly made a profit of $3+ mil last year, and that's with an almost full slate of playoff games. First time they've turned a profit in 5 years (again, reportedly). With this plan, Tampa would be paying out money what little money they might make to be distributed to teams that hit the narrow window between $30-$38 mil.

I can see how this would help over the long term, but over the short term, it doesn't sound like something the owners would agree on. If I'm missing something, let me know, please.

With any proposal, though, there will be issues like this, and Tampa seems to be a team that'll fare poorly no matter what. If the league gets their $31 million hard cap, how does Tampa respond? They're already $10 million over that ... they'd probably have to dump at least 2-3 core players to get into that range. I don't think this would be too appetizing to Tampa fans either. Under my proposal, they could take a smaller hit to their talent base (dump one core player), settle into the $37-38 million salary range, and take advantage of revenue sharing to continue making a profit. To me that beats the effects of a hard cap ... they don't lose nearly as much of what they've spent the last few years building.

The choices for Tampa fans are either:

A) take a huge hit to your talent base with a hard cap
B) maintain your talent base, and take small losses for a year or two on a more moderate deal (ie my proposal) until the positive effects start to kick in.
c) take a smaller hit to your talent base and continue to make a profit with a more moderate deal

Either way, TB fans won't be completely happy, but it can't be perfect. IMO my solution is more friendly than what the owners want. There's no way you'll be able to keep your entire team together AND make a profit the next couple years ... at least what I'm saying gives TB ownership a choice of directions.

 

[MS]

Because its a defacto salary cap. The NHLPA only want a weak luxury tax. Under your system you have set an effective hard cap at $48m. I can't see too many teams delving deep into the $2 for $1 range, thats just too heavy a penalty. I like it, the players wouldn't.

Yeah, it's a defacto cap. But it's a hell of a long way from a $31 million hard cap, and I think something along these lines will start to look pretty palateable to the players when they're faced with losing a combined $1.2 billion if the season is cancelled. The fact that the NHLPA has already conceded a weak luxury tax tells me they'll go a lot further on that front. I don't know if they'll go this far, but IMO it's fair, and I don't think it's out of the realm of possibility.

 

[Sotnos]

To me, a $31mil hard salary cap is so unfeasible, it's a non-starter and really shouldn't enter into discussions. I'm not even sure anymore where that figure came from, it was never confirmed by anyone that I know of. Unless there's some type of extreme salary rollback, I don't see how a lot of teams could even ice a full roster. There's no way there can be a hard cap that low unless they're either grandfathering some salaries or starting the League over IMO.

It seems like it would take more than one or two years for us to see the effect of your program on salaries, however. Changing the qualifying offer % and the current arbitration system we have are very needed, I think, as are setting some limits on entry-level contracts. But it will take time to see the effects from that since salaries are so high now to begin with. Several years, not just a year or two. I don't think the owners want to go through several more years of losses, they want immediate relief.

I don't know if everything in your proposal is workable, but you're on the right track and you've given it a lot more thought than most people. Kudos

 

[thinkwild]

It was almost eerie reading your post. I started off rolling my eyes thinking not another proposal when i realized I could of written much of what you wrote almost to the word. I feel i have a unique opportunity to challenge my own ideas. Man you're such an idiot

1) Target average salary of $1.6 million, target average team payroll of $38 million.

Seems like a great target, but this of course would be linking expenses to designated revenues. If that hurdle is overcome, the rest would seem easy.

I think the NHL as we know it is a quality product and the league doesn't need a facelift, just a way to stabilize salaries 15-20% below current levels

Bettman claims they need something different. His claim that the league is not competitive because the Stanley Cup winner comes from a top payroll team, well duh, and others only have cinderella runs, seems a clear lie and makes me think he is holding the weaker position for not saying all teams have the goal and opportunity to become a big enough revenue team to support a multiple cup winner. Even Tampa Bay. Sure, like Colorado, they may have to make some strategic decisions, but the opportunities to make them are there. Not being able to at all times afford all their players I dont think is a sign the system is unfair Sotnos.

1. Luxury Tax

It still seems the intent you have is to punish rather than to raise a little money for robin hood redistribution Like a GST rebate. A child tax benefit.

What is the purpose of the punishment? Certainly not because their spending affects competitivenes. IF you are to accept that there are winning and losing teams, is it fair to manage the margin by which they win by given the actual competitive parity we see.. Yes when Ottawa played Nashville last year, they relaxed their game a bit. But they lost too. And now Nashville has arrived where we cant take them lightly anymore. Exept that they're not divisional games.

The other problem with luxury tax proposals of course is that they really need to be modelled. The owners would say, if you think the result will be what you say, guarantee it, for if the market doesnt turn out as you had anticipated, hardly an improbable idea, the luxury tax was an empty failed gesture. If you make them too strict, it is likely to have a perverse side effect somewhere else.

a) there is a salary floor of $30 million. Teams may choose to spend under this amount, but if so forfeit any claims to shared revenue. Likewise, teams with payrolls over $38 million have no claim on this revenue.

Although the idea of needing a salary floor seems to me we have a poorly conceived marketplace, perhaps add here, spending over $38mil and not having any playoff appearances disqualifies your eligibility, because now they are just being stupid or spending gamblingly at their own risk.

5. Restricted Free Agency

a) teams must present a qualifying offer representing 80% of the base value of the final year of the player's previous contract, or the player becomes an UFA.

Im still struggling with this one. Teams always have the right to offer that player 80% of his salary. Its just no longer an exclusive right. If you have failed as management and gotten a player ahead of his worth, it seems reasonable to waive him if you want to lower his salary. And after all, this is a player you are unhappy with. Why such a worry about protecting his exclusive negotiating rights? Why should you be rewarded with rich rfa compensation for him anymore?

Ottawa lost Bonk because we didnt feel he was worth $4mil. Im sure we would of kept Joe Thornton at that price. But even at a lower price, we werent going forward with Bonk in his role. If someone else wants to, feel free. Is the fear that rich teams will be able to load up with overpaid underachievers?

6. Arbitration

Players eligible for arbitration have had their leverage to negotiate their market value presumably removed. If these players getting too much, perhaps the answer lies in manipulating their leverage somehow.

 

[Sotnos]

Not being able to at all times afford all their players I dont think is a sign the system is unfair Sotnos.

I'm in my thirties, I am well aware that things are not always fair. What I am asking is, how does this plan help in the short term, which (to me) is what the owners are most interested in?

 

[thinkwild]

I'm in my thirties, I am well aware that things are not always fair. What I am asking is, how does this plan help in the short term, which (to me) is what the owners are most interested in?

You strike me as very aware of that, but sometimes I tend to fall into the trap too of thinking if Redden and Chara both get $8mil as UFAs a few years from now, that it would be demonstrating the unfairness of the system if we had to choose just one after we had them for 10 years, or in Tampa Bays case even became champions.. When maybe its more just the unfairness of lfe.

How does it help what though? My vision of good competitive spirit, team building, equality of opportunity, and fairness for all? I think it looks like something that would plant a good framework. Course I dont model my ideas,

Is this the real goal for the owners in this particular conflict you think? Or do they see 10 yrs ahead with some 20-50Billion of revenues up for grabs and would like to salary under duress their commision employees while they go through it.

I dont know if these ideas would address any of the owners real concerns. Which as stated seems to be a negotiated link between revenues and expenses at a rate lower than a marketplace would naturally come to. I have to think they are clever enough to manage their expenses in a marketplace.

If they think fans think a cap will be better, they will want to do it figuring it will sell better. I probably naively feel, if they spent as much time teaching us fans how it works and why they are making the choices they do as they do whining about the injustice of it all, fans would learn to love it and play along. John Cleese could sell string to anybody

 

[jfc]

Slight adjustment........

How about kicking in the luxury tax at 40mil, making the minimum payroll 33-35mil and having the players agree that provided the owners follow the cba, they won't sue the league for collusion damages if salaries don't grow as fast as they'd like?
A collusion lawsuit could force minimum salaries way up, making the cba, in effect, a reverse salary cap. The owners cant really use a hard cap because of the minor league system. If the players don't trust them now, imagine if the owners had that toy to play with! Plus if the tax kicks in at a higher level, it could be made a little more severe, slowing down,but not stopping salary growth

 

[Guest]

I think a strict enough luxury tax is almost as productive as the revenue sharing. Make it so that the luxury tax generated is enough that it substantially raises funds for the lower income teams. You have to have a salary floor as well though.

 

[QuickDynamite]

This is what I hate. Bettman's cap idea is catering to the non-hockey market teams. And will hurt the more sucessful teams who have established themselves as hockey markets. Its ridiculous.

 

[QuickDynamite]

I think a strict enough luxury tax is almost as productive as the revenue sharing. Make it so that the luxury tax generated is enough that it substantially raises funds for the lower income teams. You have to have a salary floor as well though.

Apparantley Gary Bettman proposed a high luxury tax that would make significant changes to salaries. But the NHLPA declined and called it a salary cap.

 

[Spezza]

Good proposal. Like the way entry level contracts are handled, standard across the board.

Seen some of the other stuff before, but I think they're great ways to help control salaries (Qualifying and Arbitration).

 

[free0717]

I like this proposal. I think it has a lot of good merits. A couple of tweaks I would make is a personal salary cap per player. Max salary should be no more than 15%-20% of the salary tax level. This league cannot afford a 10 million dollar player.

Also I would like to see a cap of 50-60% of the average revenue of the top 5 teams. It would give a big market some flexibility to spend over the luxury tax level but still leave a high end cap at say the high 50 million dollar range. The whole point of revenue sharing and luxury tax is to bring the bottom up and the top down.

I dont think the large market teams will accept revenue sharing as this will actually bring the value of there teams down. The small markets would love it because it brings the value of the franchises up.

 

[me2]

Im still struggling with this one. Teams always have the right to offer that player 80% of his salary. Its just no longer an exclusive right. If you have failed as management and gotten a player ahead of his worth, it seems reasonable to waive him if you want to lower his salary. And after all, this is a player you are unhappy with. Why such a worry about protecting his exclusive negotiating rights? Why should you be rewarded with rich rfa compensation for him anymore?

Ottawa lost Bonk because we didnt feel he was worth $4mil. Im sure we would of kept Joe Thornton at that price. But even at a lower price, we werent going forward with Bonk in his role. If someone else wants to, feel free. Is the fear that rich teams will be able to load up with overpaid underachievers?

Yes and no.

RFAs are cheaper than UFAs. If rich teams are able to load up on cheaper released RFAs then it blows salaries apart for everyone. Lets say the Canucks take a stand on the Sedins that they aren't worth the 10% in qualifier becaue their points when down that year. At $1.3 they are cheaper than UFA replacement so Philly cuts Leclair and Amonte and wins the bidding war for the Sedins at $3m/y each. Next contract the Sedins now sign the $3m RFA qualifier. Bingo every young player in the league will now use the Sedins $3m RFA qualifier as leverage. That's bad on teams trying to hold salaries down, what are they supposed to do walk away from all these young players? Umberger for instance got rookie max from Philly because he was a UFA, really he didn't deserve 60-70% of that. Come next deal he'll get his $1.3+10% and every medicore prospect will use that as a bargaining chip.

Also if teams let cheap players walk because they are 10-15% overpaid they have to replace them somehow. That means trading away valuable assets and damaging a team to replace a player over a few $100K. On the otherhand, if they don't do it they end up blowing the salary budget because every player on that team now wants and extra 10-15%. Net effect is simply inflation.

Tom Benjamin's entire argument is that if you should try and build a cheap young team using the fact that younger players are underpaid compared to older players and UFAs. A policy of letting players walk when are up for a 10% raise they don't deserve blows that plan out of the water because you can't replace them for the same price, and if you constantly give in you get too much inflation.

Teams need a way to deflate salaries of underperformers without losing their rights. I'd think the currect CBA could be made to work (with a few minor tweaks such as 100% qualifiers) if there was a salary rollback of 30%+ to restore salaries to appropriate levels. Unfortunately the NHLPA wouldn't agree to that (can't blame them) nor will they entertain ways are allowing teams to stop inflation.

 

[mr gib]

the present cba was working fine - arbitration aside - as soon as jagr pronger and the like are gone they're will be no more 8 - 11 mill guys they just have to sweat bettman out - he's gotta go -
his dream of a national american tv deal was a dream

 

[thinkwild]

Yes and no.

RFAs are cheaper than UFAs. If rich teams are able to load up on cheaper released RFAs then it blows salaries apart for everyone. Lets say the Canucks take a stand on the Sedins that they aren't worth the 10% in qualifier becaue their points when down that year. At $1.3 they are cheaper than UFA replacement so Philly cuts Leclair and Amonte and wins the bidding war for the Sedins at $3m/y each. Next contract the Sedins now sign the $3m RFA qualifier. Bingo every young player in the league will now use the Sedins $3m RFA qualifier as leverage. That's bad on teams trying to hold salaries down, what are they supposed to do walk away from all these young players?

Im glad to see we agree that its a better choice to build a team with the cheap Sedin twins than Amonte and Leclair. Im glad we agree that the "Luxury" of signing Amonte, Reonick and Leclair to big UFA contracts is no advantage at all, and if they had their dithers that much rather swap them all for the cheaper RFA Sedin twins. Not only its it a better business decision, its a better hockey decision. Vancouver has an unfair advantage over Philly because they have good cheap young players. I just dont agree with you that its such an unfair advantage over the big spending teams that we need to make radical CBA changes.

If the Sedins arent worth a 10% raise, this is the problem with the CBA we are now adressing? Its not the $10mil players, its the $1.5mil players?

We are arguing over whether they are worth 60% of what they are worth in an open market instead of the 50% of their worth you wish to pay them at.

I can think of easier ways to address this than a cap.