New Idea: Free Agent Salary Cap

Discussion in 'Fugu's Business of Hockey Forum' started by coolboarder, Apr 14, 2011.

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  1. coolboarder

    coolboarder Registered User

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    This quote was made by someone, I forgot the screen name but I saved the quote on my notepad.

    While I agree that teams should not lose their key roster spots due to the team salary cap. When I read that, an idea just came to me. I thought that it was a great idea so I was saving up the idea to right time when I am fresh and alert. Now, here is it.

    Scrap the team salary cap of $59 million. It is no longer exist to all teams in the league. Salary cap don't count to their home grown talents by draft picks. Retain the rookie cap or ELC in their current CBA to new CBA. In other words, there's unlimited payroll to those type of players. Teams' payroll cannot go below $35 million floor salary ceiling. Here is the twist: Institute the "Free Agent Salary Cap". "What is this", you may ask?

    Free Agent Salary Cap is a free agent signing to the new team. That player is subjected to the "Free Agent Salary cap". The team's free agent salary cap can be up to $10 million. It counts against them for up to 5 years. Once the 5th year is up, the resigning of that player is not subjected to the salary cap anymore and can be considered as "home grown talent" because he has been with that team for more than 5 years. The free agent contract signing has a length limit up to 5 years and cannot exceed to more than 6 years, "see Hossa". The free agent signing can sign for one season but should they decide to resign that same player, he is still subjected to the FA salary cap for another 4 years. The contract length cannot go beyond the length of 5 years.

    *Note: the length of the players subjected to the FA salary cap can be negotiated between the owner and the union. It can be between 3 to 5 years worth of the cap. I am only making the example of the idea I just made.

    It would reward the teams that worked hard to scout and pick that player by the draft and be able to keep their players unlimited salary according to their team budget. So whenever they sign a free agent, they are counted to the FA salary cap. That way, we would be more careful to sign any players off from their team to give them a chance to retain their homegrown players.

    Keep the RFA and UFA rules. Teams that matches the RFA contract offer by other team is not subjected to the FA salary cap. However, should they failed to match the contract, that team should be compensated by draft picks. However, that team who got that player is subjected to the FA salary cap for 5 years. That players status can still be RFA after 5 years of cap depend on their age as agreed by CBA but is not compensated if they loses him but has a right to match but is not subjected to the FA cap anymore. Exemption: that team that just traded for him is always compensated if they lose him by RFA status to other team and decides not to match their offer.

    Now, what about trades? Will that counts against the new teams that just acquired that players who just signed the free agent? Yes. It is still subjected to their cap but their length of the cap clock won't reset to zero because of the trade. If that team that just trade away his free agent could free up the FA salary cap to acquire another FA player from other team via trades.

    For example, Hossa signed with Chicago for a 5 years contract and he has been with the team for 3 years but Blackhawks GM decides to trade Hossa to Red Wings. After the trade, Red Wings must have their Free Agent salary cap available or the trade is void. Teams can trade their FA salary cap provided it does not exceed $10 million cap. The Red Wings kept Hossa until the contract expires. If Hossa wants to resign a new contract with Red Wings, he is NOT subjected to the Free Agent salary cap anymore because of the trade and is considered a homegrown players via trades, however, should Hossa decides to sign with Blackhawks, he is again under subjected to the Free Agent Salary cap again because the Blackhawks traded him away.

    What about wavier? There is a new twist to the wavier rules: whenever a new player that just signed to a contract via free agent and is subjected to the cap but he failed to make the team or demoted to the minor. Any team can claim that player without any penalty to their own FA salary cap. In other word, any player that is claimed by someone is not subjected to the FA salary cap and is considered a "homegrown talent" because they scout and found the player they wanted. However, that team who signed him to a free agent must pay for their "mistake" and is counted against the FA salary cap, even though they lose him to the wavier for the whole season, so in other word, it is harder to acquire the trade to a trading partner to acquire other player that is subjected to other team's FA salary cap. After that season, whether that player is still under contract to other team for another few years is not subjected to the team that just lost him via wavier is not subjected to the cap anymore and has a room in their FA salary cap once the season is over.

    I think that should cover any scenarios I could think of to the idea I just had. What do you think of those idea that could solve the problem that loses their talents away to other teams due to the salary cap restrictions? Any questions? Feel free to put recent example of signings and the roster make-up of the new season and how that FA salary cap works.
     
  2. Sanderson

    Sanderson Registered User

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    I think all that forgets about one fundamental concept, teams didn't get that talent through sheer scouting genius, they got it because they were handed high draftpicks. You can't complain about the cap (and thus the league) taking away talent from a team, while you ignore that it was the draft (and thus the league) which was the reason they got that talent in the first place.

    I'm really tired about the complaint you quoted, because it's just rubbish. No one forced Chicago to spend an unhealthy amount of money on free agents like Campbell, Huet and Hossa. If those contracts cost them their own talent, so be it, it's their own fault. They got a Cup out of it, so they won't complain, but it's ridiculous to suggest they should have been able to keep their team together, when they are the only reason why they weren't able to.

    While your concept doesn't sound that bad, it isn't really necessary. Teams can draft and keep their talent just fine, as long as they don't throw their money at free agents as well. Heck, you can even do both, if you don't take it to the extreme. One can hardly expect anyone to feel sorry for a team that threw lots of money at players other teams drafted and developed.
     
  3. sh724

    sh724 Registered User

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    I like the general idea but I think it could use some more work. There should not be a limit on the length of the contracts players should be allowed to sign for as many years as they want. The salary cap should work the same was as the current one except only include players on the roster that did not sign an ELC with that team, that way undrafted signees wont count against the team. But it should include all players that did not sign an ELC with their current team no matter how they were obtained and no matter how long they are with said team. However this would drastically reduce the amount of talent available through free agency as the rich teams will keep every player they want to keep and the poor teams will continue to lose their prospects for more money somewhere else.
     
  4. TheMoreYouKnow

    TheMoreYouKnow Registered User

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    Sorry to say but really how far do you want to go in micro-managing teams' financial affairs because of some subjectively perceived "problem" with how teams' rosters look.
     
  5. mouser

    mouser Business of Hockey

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    I'm kinda confused on what the objective of a change like this would be?

    By my count Chicago lost only two players from last season that they drafted or signed as undrafted free agents. Byfuglien and Niemi. Most of the roster turnover was not "homegrown" talent.
     
  6. kdb209

    kdb209 Registered User

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    Righting the perceived "injustice" to big market fans - that their teams cannot use their innate financial advantages to as great an effect as in the halcyon pre-cap days.
     
  7. tarheelhockey

    tarheelhockey Highest Boss

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    So when a player is traded, through no fault of his own, his potential earnings are reduced from infinity to a fraction of what he would make under even the current system.

    Good luck getting that one by the PA.
     
  8. seanlinden

    seanlinden Registered User

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    What's the point of this ridiculous idea beyond appeasing the people on hfboards who think they deserve something extra for developing their own talent?

    The NHL has no stake and has no reason to encourage this. For one, player movement is good for the league, as is preventing dynasties. The last thing that the NHL needs is a team who drafts really well for a couple of years to spend the next 15 years at the top of the league. For some reason, people think Chicago losing all of those players is a bad thing -- it's not. They completely mismanaged their cap and deserved to lose those guys. It creates parity in the league which is essential to it's competitiveness.

    The other thing -- everyone wants to change the salary cap in one way or another. People forget that the NHL has a cap which is problably the envy of all the major sports leagues with the exception of the NFL. Baseball allows the big spenders to ensure the little guys never make the playoffs. Basketball is so convoluded that it's nearly impossible to make trades.

    Of course, there are problems, but would-be dynasties losing players is not one of them. The ~10 teams that can't afford to spend to the cap is a problem, as is a cap team potentially having to ice 17 skaters because they can't afford to bring one up. To me, the solution to both of those is simple. With the discrepancy, increase revenue sharing and reduce the $16m window. With not enough roster players, change the way the cap is calculated so that only the amount each player earns above league minimum ($500k) is counted against the cap, so a team can have as many $500k players as they want and the 23 man roster will allow. To bring up a guy who makes $600k, they only need $100k in cap space.

    So basically, instead of a $59.4m cap this year (and $43.4 cap floor), the cap would be $59.4 - (23 x .5) = $47.9m while the floor would be $31.5m. Contracts would be negotiated as "amount above league minimum", with there being a $500k baseline salary for anyone who plays in the NHL.
     
  9. SlappyMcGee

    SlappyMcGee =w=

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    My problem with this is that it basically forgets the reason the salary cap was invented; not to ruin or uphold dynasties, but rather, to make teams like, say, Phoenix, have the ability to be competitive even if they don't have the ability to pay players exorbitant amounts of cash (Like, say, the Rangers.)

    This system presumably preserves homegrown talent unless - wait! You draft a Crosby. Crosby is homegrown so he doesn't count against your cap. That's awesome! He's asking for a very reasonable 7million, and your team, due to financial difficulties, cannot afford to pay him that in addition to your other contractual obligations. What happens?

    1) You lose Crosby.
    2) You are now basically punished for letting a player of that caliber go. If you want to sign talent to replace him, you are pushed under a constricting cap.
    3) Another team, in addition to being able to draft great players and sign them to huge contracts because they are making mad cash, signs Crosby. Your ability to be competitive suddenly hinges on your geographical position.

    Drafting is awesome, but trading for pieces you need is good too. The fact that Chicago, who won the Stanley Cup last year (and for the purposes of discussion, are thus the best team in the league) wasn't able to keep all of their players means that the league becomes a little more balanced this year. And I think that's great for hockey.
     
  10. coolboarder

    coolboarder Registered User

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    The whole point of this idea is no salary cap for those players that has been with the team from the beginning, ie: drafts or non-draft free agent signings. I will give you an example on Crosby. When he was drafted by Penguins, and he was resigned to an contract after his ELC, the contract does not count to the salary cap. The teams can pay their own home-grown players any amount of dollars. Crosby will not count to the salary cap on Penguins.

    Now, if Crosby decides that he wants to play for other teams, he can sign with Montreal but he is subjected to the salary cap on his new team and is subjected to the years he is counted as I proposed in my OP, (5 years). Once he fulfill the contract and he is no longer subjected to the cap to that team and he can sign for more money without worrying about the cap.

    The purpose is to restrict the team from stealing other players via free agent for more money than the team can afford but he is free to earn more money on his own team without the cap restrain. It would allows for good players to sign with other teams for less money and pay their dues.

    Example:
    2011-12
    Crosby signs with Montreal for 5 years for $7 millions. (Montreal has only $3 million left). Montreal offered Schenn $3 million for 1 year contract.

    2012-13
    Montreal has only 3 million dollars left in cap space since Crosby is on hook for another 4 years and decides to sign 1 forward and 1 defenseman 1.5 million. Clowe and Mitchell decides to sign with Montreal. Clowe signed for 2 years for 1.8 million each year while Mitchell signed for 1 year 1.2 million.

    2013-14

    Montreal has only 1.2 million left in cap space since their free agent signing still with the team, Crosby (3 years left) and Clowe 1 year left. They choose to sign with 2 minimum wage for 5 years. Montreal has no salary cap left.

    Fast Forward to 2016-17
    Crosby has fulfilled his contract and choose to resign with Montreal for 3 years for 30 million dollar and his contract is no longer under subject to the and Montreal's cap is freed about 9 million dollars to sign since two free agent signing from 2013-14 is still under subjected to the cap.
    Crosby is finally considered a home-grown talent since he has been with the team for 5 years.

    Before 2012-13, Penguins could have signed Crosby without being subjected to the cap for 10 million. He choose Montreal for less money, $7 million.

    I hope that it will gives you some idea on how Free Agent salary cap works.
     
  11. kdb209

    kdb209 Registered User

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    It's a solution in search of a non-existent problem - a problem that exists only in the minds of some big market hfboard posters.

    The owners would never except it - it completely guts the purpose of the Salary Cap (cost certainty and, to a lesser extent, competitive balance).

    The players would never accept anything that treats two otherwise similar players differently, based on the fact that one may have been traded. The mere fact that a player may be traded (something that the player has no control over) would effectively be taking money out of the players pocket.

    And all this ignores the 54-57% Players Share. Unless the owners also agreed to eliminate that (they won't) - every extra dollar spent on a team's own free agents without a cap would come out of the pockets of every other player in the League through escrow.

    If the owners had wanted a convoluted half-assed ineffective cap system, then maybe they would have come up with this idea - but, hint, hint, they didn't.
     
  12. Zil

    Zil Shrug

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    I don't think the op has presented a viable solution, but the cap system really should make allowances for keeping your own players. A certain amount of player movement is beneficial, but at the same time it's good for teams to have identities based around maintainable cores that fans can grow a genuine connection to. Otherwise, as others have mentioned, we're just rooting for laundry.

    I personally would prefer a soft cap which would allow teams to go over the cap to keep their own guys. This doesn't really create an advantage for big markets, because those teams over the cap would not be allowed to sign free agents. If they mismanaged their squads, then they would be forced to fill out the team with only guys from their system. So any big market team that went over the cap to keep players would be automatically kept out of the free agent market. The key difference between this and the NBA is that there would be no mid-level exceptions or sign-and-trades allowed.
     
  13. Pure West

    Pure West Registered User

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    I think you guys are missing the point of the cap. Its meant to keep player costs at a certain percentage, so if this was implemented, it would of course have to be linked to overall league revenues. I don't see this doing anything but increasing player costs.

    One of the best features of the cap from a fan's perspective is the competitive balance. Theres only about 1/3rd, maybe half of the league that is even really able to exceed the cap. Its just gonna create a wider gap.

    Cap exceptions WILL NOT WORK!!
     

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