My Solution

Discussion in 'Fugu's Business of Hockey Forum' started by hockeytown9321, Sep 16, 2004.

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  1. hockeytown9321

    hockeytown9321 Registered User

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    Here is a way to guarantee owners don't lose money, and players don't have to accept a cap:

    1. 5% paycut across the board. This instanly reduces last year's losses by roughly $75 million, which would put them at $149 million.

    2. 50% luxury tax starting at $40 million, 100% at $50 million. Within two years, the average payroll will be no more than $40 million, $1.2 billion overall. The tax is only to be paid by teams over the limit if point #3 below does not cover losses. this forces owners to be within that tax threshold, otherwise, they are subsidizing each other's loss.

    3. The PA establishes an escrow fund, with each player contributing 10% of their salary. In the event the owners lose money, they take the money from this escrow fund to cover them. After the paycut, this would amount to roughly $120 million, plus interest. The interest will be given back to the players at the end of each fiscal year.

    4. If the league makes a profit overall, 20% of that profit is given to the players a bonus.

    I know there is still a $29 million loss that hasn't been covered, but thats less than $1 million per team, and I think that would be gone as soon as the average salary settled in around $40 million.

    The players would be subsidizing the owner's losses, so they would be forced to be more responsible as well.

    Players can save face because it is not a cap, and owners can save face because they are guaranteed not to lose money.
     
  2. Puckhead

    Puckhead Registered User

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    This is well thought out Hockeytown, but why should the players take a pay cut? I understand the way you put it, it is like a concession, but the point remains, that there are a lot of players who earned their money last season. Maybe not on the ice, but with Jersey sales, getting people to want to take in a game live etc. My big problem is why should Forsberg have to give back $500,000 and some stiffs who don't truly deserve to share the same ice wth the true talents of the league loses $40,000. I know it is all relative, but 1-they would never give back money they have already been given, and 2-the problem is across the board, but you can't treat all these players the same each one is a unique situation for his team and the league.
     
  3. Atma

    Atma Registered User

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    Why not? Save the league they, for the most part have trained to play in all their lives. 5% of 1,000,000 is 50k. That's probably chump change to the majority of them.

    I think the rest of the ideas will require some kind of grace period, X years for the luxury tax to kick in, and all current contracts under the now expired CBA do not have to contribute to the escrow fund.
     
  4. degroat*

    degroat* Guest

    If your goal is to have teams fold in the near future, then your deal is perfect.
     
  5. hockeytown9321

    hockeytown9321 Registered User

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    I know, it is a big concession for the players. But it is not a cap, and I think they'd accept it. I revised it a little so that the 10% contribution only comes in the first 3 years, and after that its 5%. That way the players who made the most under the old CBA are the ones helping the game the most. I also bumped up their share of profits to 50%. I think the profit sharing would really encourage low-mid level guys to not demand huge raises because they can make more if there's a profit.

    I went through the numbers last night, the league would have to lose an additional $100 million per year (on top of what they lost over the last CBA) over 10 years for this plan not to work. And frankly, if that happens, I don't think anything can save the league.
     
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