Official Cap Numbers Final - Per Leafs Lunch

[ukyote]

While small market teams may be slightly better off with revenue sharing, there's no way these clubs will be able to afford to spend up to the cap. What good is financial stability if it can never translate into a better on ice product for teams such as Phoenix?

On another note, Pittsburg must now stand a good chance of keeping all of their star players surely?

 

[Fugu]

While small market teams may be slightly better off with revenue sharing, there's no way these clubs will be able to afford to spend up to the cap. What good is financial stability if it can never translate into a better on ice product for teams such as Phoenix?

On another note, Pittsburg must now stand a good chance of keeping all of their star players surely?

And this is where people will tell you it's not about helping any team keep all their stars, it is about parity. After the cost certainty. It will certainly cost more than any team can spend under a cap to keep players like Crosby, Malkin, Fleury, Stahl and now Esposito when they reach their primes.

 

[hockeytown9321]

While small market teams may be slightly better off with revenue sharing,

That's just the thing. Even though the revenue sharing is better than it was, its still pathetic. Revenue disparities are the root of all the problems. Until they address it, and address it for real, they will never have a stable 30 or 32 team league.

 

[kdb209]

While small market teams may be slightly better off with revenue sharing, there's no way these clubs will be able to afford to spend up to the cap. What good is financial stability if it can never translate into a better on ice product for teams such as Phoenix?

On another note, Pittsburg must now stand a good chance of keeping all of their star players surely?

How mant times must it be said - the CBA was NOT designed for every team to spend up to the cap. It was designed so the average team spends to the cap midpoint.

And as far as translating into a better on ice product - it is much easier when the delta between a big spending team and small spending team is a maximum of $16M (or if they, aided by revenue sharing, just spend to the midpoint, $8M) than under the old CBA when it could be $60M.

 

[Chazz]

Many people view this increase as a step backwards, fearing that we will go back to the pre-lockout days of crazy player salaries, and owners complaining they are not making ends meet.

In my opinion, i think this increase is great news for the NHL, and all stakeholders involved.

In reading Article 50 of the latest CBA, “Team Payroll Range Systemâ€, I am led to believe that the NHL in general is doing quite fine.

Some key points about article 50:
•The Upper and Lower Limits of the Team Payroll will be subject to annual adjustments.
•There is a Fixed relationship between League-wide Player Compensation and Hockey Related Revenue (HRR).
•League-wide Player Compensation will rise or fall in direct proportion to a rise or fall in HRR in that League year.
•The Upper Limit CAN fall from one year to the next – Teams better think twice about “over spending†on an UFA

For those interested, i copy and pasted this section from the CBA

50.4 League-wide Player Compensation, Players' Share, Escrow Account.

(b) "Players' Share," "Applicable Percentage." For each League Year,
there shall be a Players' Share, which shall be equal to the percentage of HRR that the
Players shall be entitled to earn in the aggregate as League-wide Player Compensation.
The percentage applied to HRR in a League Year to determine the Players' Share shall be
known as the "Applicable Percentage." The dollar amount represented by the Players'
Share in a League Year (i.e., League-wide Player Compensation) shall equal (i.e., shall
never exceed nor be less than) the Applicable Percentage of HRR, as calculated pursuant
to this Article 50.

(i) The Players' Share shall be determined as follows:

(A) For the 2005-06 League Year, the Players' Share shall be
fifty-four (54) percent of Actual HRR.

(B) For any League Year (other than the 2005-06 League Year)
for which Actual HRR is below $2.2 billion, the Players'
Share shall be fifty-four (54) percent of Actual HRR for
such League Year.

(C) For any League Year (other than the 2005-06 League Year)
for which Actual HRR is equal to or exceeds $2.2 billion,
but is below $2.4 billion, the Players' Share shall be a
percentage between fifty-five (55) and fifty-six (56) percent
of Actual HRR, as adjusted pursuant to subsection (ii)
below, for such League Year.

(D) For any League Year (other than the 2005-06 League Year)
for which Actual HRR is equal to or exceeds $2.4 billion,
but is below $2.7 billion, the Players' Share shall be a
percentage between fifty-six (56) and fifty-seven (57)
percent of Actual HRR, as adjusted pursuant to subsection
(ii) below, for such League Year.

(E) For any League Year (other than the 2005-06 League Year)
for which Actual HRR is equal to or exceeds $2.7 billion,
the Players' Share shall be fifty-seven (57) percent of
Actual HRR for such League Year.

 

[hockeytown9321]

Many people view this increase as a step backwards, fearing that we will go back to the pre-lockout days of crazy player salaries, and owners complaining they are not making ends meet.

Lots of owners were complaining they couldn't make ends meet with the cap at $44 last year. Edmonton, Buffalo, Nashville head the list.

Sure the cap is tied to 55% of revenue. The problem is that the top 8 or ten teams account for the majority of the league's revenue. Nashville or Buffalo might get money back due to escrow, but its not enough to offset that they themselves spent more than 55% of their own revenue, even after revenue sharing, on payroll. Meanwhile, Toronto or New York or the Red Wings spend significantly less than 55% of their revenue on salary, and still get to offset some of that with the escrow. The low revenue teams are still financially unstable, but the league on the whole is not losing money.

 

[Chazz]

Lots of owners were complaining they couldn't make ends meet with the cap at $44 last year. Edmonton, Buffalo, Nashville head the list.

Sure the cap is tied to 55% of revenue. The problem is that the top 8 or ten teams account for the majority of the league's revenue. Nashville or Buffalo might get money back due to escrow, but its not enough to offset that they themselves spent more than 55% of their own revenue, even after revenue sharing, on payroll. Meanwhile, Toronto or New York or the Red Wings spend significantly less than 55% of their revenue on salary, and still get to offset some of that with the escrow. The low revenue teams are still financially unstable, but the league on the whole is not losing money.

hockeytown9321, some teams need to realize that they do not necessarily need to spend near the upper limit. There will always be some teams "richer" than others. I believe the $ 16 m gap between the lower and upper limit if fair.

All and all, the increase in the Upper Limit is good news for the league.

 

[hockeytown9321]

hockeytown9321, some teams need to realize that they do not necessarily need to spend near the upper limit. There will always be some teams "richer" than others. I believe the $ 16 m gap between the lower and upper limit if fair.

All and all, the increase in the Upper Limit is good news for the league.

Yes, but in the year before the lockout, you had 7 teams spending below what is the new floor. Where are these teams getting the revenue to increase their payrolls so much?

 

[Chazz]

Yes, but in the year before the lockout, you had 7 teams spending below what is the new floor. Where are these teams getting the revenue to increase their payrolls so much?

If these 7 teams are losing money, they should spend closer to the 34.3 and not the 50.3 million upper limit. If they spend at the lower limit, they will not lose money!

 

[hockeytown9321]

If these 7 teams are losing money, they should spend closer to the 34.3 and not the 50.3 million upper limit. If they spend at the lower limit, they will not lose money!

They were spending less than 34.3M in 2004 and losing money. If Gary is to be believed, they were losing quite a bit. Revenues have not increased enough to explain how they're healthy and stable by spending to the floor now.

I was also mistaken on it being 7 teams. I thought the floor was $33M, not 34. In 2004, there were 10 teams under $34.3, and an 11th $100K over.

http://asp.usatoday.com/sports/hockey/nhl/salaries/totalpayroll.aspx?year=2003-04

Its also interesting looking at those salaries from 04, exactly 1/3 of the league was over $50.3, 1/3 were within the 07-08 payroll range, and 1/3 were under the 07-08 floor.

Also recall that when Gary first started negotiating in the media, his suggestion was a hard cap around $32M, if I remember correctly. At the time, this was the only way to ensure a financially stable league.

 

[Ted Hoffman]

Yes, but in the year before the lockout, you had 7 teams spending below what is the new floor. Where are these teams getting the revenue to increase their payrolls so much?

Revenue sharing and increased ticket prices (which people are actually paying, contrary to what some people SWEAR TO GOD is reality). That's how.

Looking at that list: Minnesota could easily have spent more money - they were making money hand over fist. They just chose not to. Chicago could easily have been spending more - why didn't they? Bill Wirtz.

Nashville? They spent closer to $38 million this past season. Pittsburgh was up near $36 million, Atlanta actually went over the cap in '05-06, Buffalo narrowly missed going over this past season (amazing what making the playoffs will do for team revenues), Florida was dealing with unstable ownership, Edmonton spent closer to $40 million this year after making a run to the Finals, Columbus was over the $36 million midpoint this past season, and Tampa was pushing $43 million this past season.

If teams really thought they needed to cut down on spending, they would have. The fact is, two (2) teams didn't spend more than $36 million last year, and Pittsburgh just narrowly missed that mark.

Again ... there is no, "teams are guaranteed to make a profit" clause in this CBA. It comes down to running operations smartly and taking advantage of the current cap structure and revenue sharing program to make your team as competitive on the ice as possible. Make the team competitive on the ice, and fans will show up - which will increase revenues, increasing the chances of turning a profit. Under the prior system, several teams were already assured of not being competitive because they had to limit spending to under $35 million while other teams could spend $60-80 million or more; that disparity has been dampened, and the have's are required to kick in to help the have not's.

Thinking about how things were pre-lockout and trying to apply them to now is a recipe for disaster, and will make it impossible to understand how the current system is vastly better than what we had.

 

[hockeytown9321]

Revenue sharing and increased ticket prices (which people are actually paying, contrary to what some people SWEAR TO GOD is reality). That's how.

Then why not just put in a luxury tax and enhanced revenue sharing and not cancel the season. Regardless of what Gary's press releases say, the missed season hurt the league tremendously in the US.

Looking at that list: Minnesota could easily have spent more money - they were making money hand over fist. They just chose not to. Chicago could easily have been spending more - why didn't they? Bill Wirtz.

If they chose not to compete, that's their problem. I have to question if everything we went through in 04-05 was worth it for teams that aren't going to compete anyway.

Nashville? They spent closer to $38 million this past season.

And what did Leipold claim as his losses since the cap was put into place? $27M? (I'm really asking, I don't remember off hand, I think $27 is close)

Again ... there is no, "teams are guaranteed to make a profit" clause in this CBA. It comes down to running operations smartly

Just as it did before this CBA.

 

[Ted Hoffman]

Then why not just put in a luxury tax and enhanced revenue sharing and not cancel the season. Regardless of what Gary's press releases say, the missed season hurt the league tremendously in the US.

Probably because the NHLPA objected to it, and because for some teams like Detroit, Colorado, Toronto and the Rangers, they'd pay $40 million to be able to spend $80 million (like the Yankees are doing in baseball).

If they chose not to compete, that's their problem. I have to question if everything we went through in 04-05 was worth it for teams that aren't going to compete anyway.

The lockout wasn't to fix things like you or anyone else want them - it was to level the playing field like small market teams wanted, so that we didn't have the situations of past years where teams that couldn't afford to spend more than $35 million were already screwed when it came to trying to keep their roster together while another team could just swoop in, offer a monster contract, and carry $70 million or more in salaries. The end result was to force all teams to play by the same set of rules and allow everyone the chance to be competitive, not guarantee Cup runs for those who could just spend money like it grew on trees.

In that respect, it appears it's working.

And what did Leipold claim as his losses since the cap was put into place? $27M? (I'm really asking, I don't remember off hand, I think $27 is close)

And this means ....... ? If Leipold can't run a franchise profitably, whose fault is that? The CBA can only help try to make things more even for all teams - it can't fix ineptness or stupidity.

The Blues lost $32 million in 2005-06. Was that the fault of the CBA? No, that was the fault of Bill Laurie for gutting the team trying to make a quick sale, and fans staying away by the thousands in protest.

Just as it did before this CBA.

Thank you for noticing. The owners - all of the owners - wanted linkage between player salaries and team revenues. It's there now. No matter what the Torontos and Detroits of the league want to do, the players in the end are limited to a given percentage of the league's revenues; to help smaller teams, revenue sharing exists to help move money from teams generating $120 million in revenues to those generating $45 million in revenues, so that everyone can at least try to be competitive.

Pining for a lower cap isn't going to happen; if the cap keeps going up, revenue sharing will help cover the shortfalls. After that, it's up to each team to get its financial house in order. If they can't do that, ... well, don't blame the CBA, the NHL, or the NHLPA.

 

[Chazz]

Irish Blues, you raised a great point about teams needing to run their operations smartly. Teams need to make sure they can be profitable in their operations. Some GM's and executives do lousy jobs.

When Bill Wirtz does not want to advertise TV games locally, or when John Ferguson Jr. over pays for Gill, or over pays for Peca, or over pays for Kubina, or trades draft picks for Raycroft, then changes his mind less than a year later and trade another First Round Pick for Toskala, trades 3 of his 4 first round picks, trades 3 of his 4 second round picks, etc... its hard to make ends meet.

Should other GM's pay the price for Bob Gainey over paying for Sergei Samsonov to a$3.5m/year and leaving him as a healthy scratch in the press box, when players in the same caliber as Samsonov are asking for $3.5/year, but are really worth 2.1 or 2.3 m ?

Just like in the real world, if a company cannot handle day to day operations, they will fail. I am tired of these same 5 or 6 teams always complaining that they cannot makes ends meet, just find a way to be profitable or quite complaining and close operations, simple as that.

The current CBA has levelled the playing field, now it is up to team management to be successful. They are given the opportunity to be profitable now, but it is up to them to make it happen.