NHLPA: 11-12 cap ~$62M; late May Daly: ~$63.5M cap;

[Hunter Gathers]

You realize even if it did it would STILL be below some team's payrolls in 2004?

Yeah, of course you did.

The cap should have been set high from the beginning. Rather than going with the Pejorative Slured 39 million dollar cap they went with, they should have started in the mid 50s at the minimum. Would have been a much slower climb to where it is today. They fought tooth and nail for such a harsh cap only to see it evaporate as quickly as it has.

 

[Melrose Munch]

You realize even if it did it would STILL be below some team's payrolls in 2004?

Yeah, of course you did.

http://en.wikipedia.org/wiki/List_of_team_payrolls_in_the_NHL#New_York_Rangers


76>70

Fine, that is not a huge gap though.

 

[Melrose Munch]

The small markets? They were the ones calling for the cap like this and now they are going to have to live with what they got. What, should we cater to them EVEN MORE now? They have gotten tons of concessions from the big market teams -- I don't think they should be entitled to anything more. If they cannot compete where the cap floor is set now, than maybe they should not be in business.

Oh I agree, I just wanted an explanation. I think the cap is a joke but what can you really do?

They may acquire a player who has low $$ payout but higher salary cap. (And a prospect and/or good pick in "compensation".)

(Recall that the Sharks got a first round pick for taking on the salary cap hit of a not-retired player from NJ.)

Thanks LS.

 

[MountainHawk]

That represents an increase of $2.8 million from the current $59.4 million cap, or approximately 4.7 percent. This means that, 1) the NHL's "record" revenues have not increased by the 5 percent the players voted to bump the cap for this season; and, 2) the cap would remain flat or even decrease slightly for the first time if the players opt not to adopt the inflator for next season.

Isn't this wrong? The midpoint goes to $54.2 from 51.8M, so that's growth of 5.4%.

 

[razorsedge]

The max and minimum salary cap has done it's job by having all teams on equal playing field. When you have a six point gap between 4th to 11th place in a conferance with 10 games to go, it really adds brings up interest leading up to the playoffs. For me it does anyways.

The teams losing money before the lockout, continued to lose money even when the cap was $39 million. So who cares what it's at now. The opportunity is there to build a winning team, and winnipeg makes money in this league.


I do have a question though. Does the revenue sharing the teams that qualify go up when the cap goes up?

 

[Confucius]

The max and minimum salary cap has done it's job by having all teams on equal playing field. When you have a six point gap between 4th to 11th place in a conferance with 10 games to go, it really adds brings up interest leading up to the playoffs. For me it does anyways.

The teams losing money before the lockout, continued to lose money even when the cap was $39 million. So who cares what it's at now. The opportunity is there to build a winning team, and winnipeg makes money in this league.


I do have a question though. Does the revenue sharing the teams that qualify go up when the cap goes up?

Did you mean winning, was Freud at it again?

 

[Crazy_Ike]

The cap should have been set high from the beginning. Rather than going with the Pejorative Slured 39 million dollar cap they went with, they should have started in the mid 50s at the minimum. Would have been a much slower climb to where it is today. They fought tooth and nail for such a harsh cap only to see it evaporate as quickly as it has.

This is ridiculous. The cap is proportional to revenues. If it started higher, it would be just as proportionally higher now. I find it unlikely that a cap of about 76m today would make things better than the current situation.

 

[Melrose Munch]

This is ridiculous. The cap is proportional to revenues. If it started higher, it would be just as proportionally higher now. I find it unlikely that a cap of about 76m today would make things better than the current situation.

Regardless the floor needs to be lowered.

 

[Hunter Gathers]

Regardless the floor needs to be lowered.

If the floor is lowered, the cap needs to be raised.

 

[Fourier]

Interesting. How frequently can the players vote to use the escalator?

If true, doesn't this put the players in a decent position to not got back the money they put in escrow? Trigger the escalator, and see a decrease in revenue? Doesn't necessarily sound like a good situation. Sounds like the majority of players would be putting salary at risk so a few more can get paid.

But those same players most likely took advantage of earlier decisions to use the escalator. So why stop now?

 

[Fourier]

How much has the CAD appreciated from last year to this year?

There's real growth and then there's currency appreciation. Daly addressed that point last year, iirc.

In this case, I would say that the increase is about 70-75% real growth and about 25-30% currency related, though that is completely off the top of my head. I have not looked at the average value of the $CDN for this year.

(I just looked at the BoC numbers and the currency average for this year so far is $.9898 vs $.9484 from last year. This year's number will rise a little before June 30, perhaps to about $.996. So all of this is inexact science, but I am pretty comfortable with the ratios above.)

 

[macavoy]

Regardless the floor needs to be lowered.

The floor should have remained at 55% of the cap and not switched to the "arbitrary" amount of $16m. Actually, I think 55% was too low and 65% would be a better number. That would make the cap floor $40.5m.

 

[Retail1LO*]

Every year, but the escalator doesn't compound from year to year. Each year they calculate what the cap should be based on the previous season's revenue, then the NHLPA has the option to increase the cap midpoint by 5%. The next year they start from scratch and calculate it again.

So, under what conditions would the NHLPA NOT opt to invoke the escalator?

 

[Hawkscap]

So, under what conditions would the NHLPA NOT opt to invoke the escalator?

In a year, where they believe the cap could go down.

 

[Melrose Munch]

If the floor is lowered, the cap needs to be raised.

Done. Better for us big market fans anyway.

The floor should have remained at 55% of the cap and not switched to the "arbitrary" amount of $16m. Actually, I think 55% was too low and 65% would be a better number. That would make the cap floor $40.5m.

IMO I was thinking 45%. Teams need breathing room.

 

[Fourier]

In a year, where they believe the cap could go down.

At this point I would say exactly the opposite. I would be shocked if they don't use it every year of this CBA but if they were to not do so it would be most fair in a year where the cap rose substantially.

 

[Fugu]

In this case, I would say that the increase is about 70-75% real growth and about 25-30% currency related, though that is completely off the top of my head. I have not looked at the average value of the $CDN for this year.

(I just looked at the BoC numbers and the currency average for this year so far is $.9898 vs $.9484 from last year. This year's number will rise a little before June 30, perhaps to about $.996. So all of this is inexact science, but I am pretty comfortable with the ratios above.)

I was hoping you'd show up since you have the ratios handy. Otherwise I might actually have to calculate things for myself again.


So roughly 3.3-3.5%-ish of real growth. Your earlier entry on this topic, for reference:

As pointed out above, the conversion is based on the July 1 -June 30 average from the Bank of Canada. Also, as a rough estimate, each 1 cent increase in the $CDN vs the $US results in about $8.5-9M in additional HHR. Last years drop cut about 4-4.5% off of HHR, which essentially wiped out all of the natural organic gains.

Here's last year's thread:
http://hfboards.com/showthread.php?t=691083

I was trying to find the discussion by Daly about total growth, and portion attributable to the CAD for last season.

 

[Fugu]

Every year, but the escalator doesn't compound from year to year. Each year they calculate what the cap should be based on the previous season's revenue, then the NHLPA has the option to increase the cap midpoint by 5%. The next year they start from scratch and calculate it again.

Not sure if it was noted here, but the escalator is calculated from the HRR-derived midpoint, not the peak value.

 

[boredmale]

Well this sucks, I want to see a year the cap goes down(even like 1M-2M) and screws over a few teams

 

[Blackhawkswincup]

Yet another reason that the lockout was Pejorative Slured (mod). A shame we wasted a year of hockey due to this waste of a cap. The upper level will hit 70M soon.

Simple

We no longer have NYR/Det having a payroll 4 times the size of small market teams who they used as basically minor league restock stealing all there up and coming young talent they couldn't afford

Also the league is much stronger financially and competitively

The league has cost certainty

 

[Fugu]

Simple

We no longer have NYR/Det having a payroll 4 times the size of small market teams who they used as basically minor league restock stealing all there up and coming young talent they couldn't afford

Also the league is much stronger financially and competitively

The league has cost certainty

Oh, you just took the bait.


The league shut down for a year so that they could stop a handful of teams, probably 5-6, from spending more than $50MM on over-aged veterans. Recall that the best protection [imo] for smaller market teams was restricted free agency until 31-- the age where most players are well along to a decline in performance.

Did it really matter if NYR wanted to pay a 35 yo Jagr $10MM per year (for example)?

And here we are today, where the cap floor is nearly double, or more, the amount that the lowest spenders were spending under the old system. Problem is that revenue sharing does NOT make up enough of the difference. The costs weren't the issue, but revenues were. A CBA cannot really help teams grow their own revenues directly, but that is what needs to happen. I can plug in some numbers later, but as a % of their own HRR, smaller market/earner teams are spending more on player salaries with this system than they did with the previous one-- even after revenue transfer (aka sharing around these parts).

Meanwhile league revenues have not doubled in totality. My rough eyeballing of it is that going from $2.2 billion to $2.9 billion is ~32% increase over 6 yrs.

Jeffrey crunched these figures last year:

Does anyone else find it just a little funny that in the 5 years since the lockout that the Average NHL Team Payroll has grown more than it was prior to the lockout?

League Average Payroll increase:
99–00 : 6.17%
00–01 : 5.74%
01–02 : 13.89%
02–03 : 10.33%
03–04 : 5.87%
04-05 : Lockout
05–06 : -22.73% (Cap introduced)
06–07 : 17.44%
07–08 : 10.12%
08–09 : 15.82%

In the 5 years before the lockout the average increase was 8.4% per year.
In the 3 years since (not including the year the cap was introduced) the average increase has been 14.46% per year.

The average team payroll the year before the lockout was $44M...and now the cap is closing in on $60M with a salary floor of over $40M. So...before the lockout the average payroll was $44M....now the MINIMUM payroll only a few years later will be pretty much the same as that.

I find that funny. A lost season of hockey so that a few years later teams are FORCED to pay what the average payroll was the year prior to the lockout.

But yeah...the NHL really hammered the Union in that CBA!

 

[Dado]

The $16M window between floor and ceiling is more accurately described as profit-certainty for the important clubs, loss-certainty for the bottom-third-(hockey)-market clubs.

Current approach cannot be supported without contraction or MLB-level revenue sharing.

The small US clubs are now being hammered by the inverted dollar as they are not meaningfuly sharing in the revenue increases, but must bear the cost of rising cap floor - it's the inverse of the Canadian clubs being hammered pre-2003 by a weak loonie.

 

[Beukeboom Fan]

Yet another reason that the lockout was Pejorative Slured (mod). A shame we wasted a year of hockey due to this waste of a cap. The upper level will hit 70M soon.

Call me crazy - but the way I understand it league revenues have increased by more than 50% since the lockout ($39+M cap limit first year under new CBA to projected $62M next year). The players get more as the league wide revenues increase.

The real problem with the salary cap is the HUGE discrepency between the individual teams revenue streams. That has nothing to do with the salary cap, and has everything to do with revenue sharing.

 

[Melrose Munch]

Simple

We no longer have NYR/Det having a payroll 4 times the size of small market teams who they used as basically minor league restock stealing all there up and coming young talent they couldn't afford

Also the league is much stronger financially and competitively

The league has cost certainty

I had no problem with that. Smaller market teams are not TV draws.

 

[Dado]

The real problem with the salary cap is the HUGE discrepency between the individual teams revenue streams. That has nothing to do with the salary cap, and has everything to do with revenue sharing.

"Salary cap" in this context is generally short-hand for "CBA" - sounds like many of us are pointing out pretty much the same problem, just using different words.