Owners and a Hard Cap

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SwisshockeyAcademy

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vanlady said:
There have been a handfull of players return, many of them were out of shape when they went over and didn't take playing in europe seriously. Yes some players are having trouble adjusting but if what was discussed during the Modo Fajrstead game comes to pass, money won't be much of an issue.
OK what was mentioned in the Modo/Fajrstead game?
 

Wetcoaster

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quat said:
Where did you get this from? Even the PA is past arguing this.
Pardon????

The reason there can be no hard cap is the the NHLPA cannot trust the figures being peddled by the owners. Hence a luxury tax.
 

vanlady

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SwisshockeyAcademy said:
OK what was mentioned in the Modo/Fajrstead game?

Many of the european owner have been discussing a european super league. Before this the owners haven't had the money, however, with the windfall provided by the lockout, including TV contract from North America, They may now have the capital to go ahead with there plans. European owner hope the lockout goes the whole season.
 

Wetcoaster

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quat said:
My point is that even the PA is no longer arguing about the numbers or trusting books, etc. They know there is money lost and that something needs to be done about it. Blue fin is was a red herring :D

No it was not.

No faith in the figures - no hard cap.
 

SwisshockeyAcademy

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Wetcoaster said:
No it was not.

No faith in the figures - no hard cap.
So what will it take to garner the players faith in the reporting of revenue? Have Tie Domi go through the books with a fine tooth comb? Have the players said "open your books and then we will talk hard cap"? I seem to recall the some players saying no chance of a hard cap even if its 100 million.
 

vanlady

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SwisshockeyAcademy said:
So what will it take to garner the players faith in the reporting of revenue? Have Tie Domi go through the books with a fine tooth comb? Have the players said "open your books and then we will talk hard cap"? I seem to recall the some players saying no chance of a hard cap even if its 100 million.

If you talk to an accountant about auditing a company that has multiple layers, they will tell you that if the owners are determined to hide revenue, there is not a chance an audit would discover it. A forensic auditor told me that it would take a team of hundreds of accountants the entire summer to get a reasonable accurate number and even then there is no guarentee.
 

SwisshockeyAcademy

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vanlady said:
If you talk to an accountant about auditing a company that has multiple layers, they will tell you that if the owners are determined to hide revenue, there is not a chance an audit would discover it. A forensic auditor told me that it would take a team of hundreds of accountants the entire summer to get a reasonable accurate number and even then there is no guarentee.
Ok so we now know that we can never get to real picture and what do the players intend to do about it? Will Todd Marchant watch the big contract he waited his whole life for go down the drain without collecting a cent? Great move. I agree owners are not saints, they are business men. They are looking for their 10 pounds of flesh after getting about 10 KG's of flesh ripped off some of them for the past 10 years of ludicrous salaries. What i don't like is the lack of a revenue share and the fact fans are going to be gouged as badly as ever.
 

quat

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vanlady said:
There is no guarentee of a 3rd party, as a matter of fact John McCaw quite simply sinks your arguement. Both Aquilini and McCaw have made it very crystal clear that no one but them and the people in there employ will see there books.

Well I'm not sure how you come to that conclusion. As far as I've heard in the media, the PA is still refusing to accept any talk of a cap, never mind the finer points of implimenting it. I'm sorry, but McCaw et al are part of a group in the NHL... he can't decide on his own to ignore a rule put in place by a majority.

I would be curious to hear how you arrived at this conclussion though... if you could post it.

Thanks
 

Wetcoaster

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SwisshockeyAcademy said:
So what will it take to garner the players faith in the reporting of revenue? Have Tie Domi go through the books with a fine tooth comb? Have the players said "open your books and then we will talk hard cap"? I seem to recall the some players saying no chance of a hard cap even if its 100 million.
The NHLPA has said if the NHL is prepared to share revenues at the percentage levels of the NFL then they will talk about a salary cap.

The hook for that is that some owners then have a stake in keeping other owners honest.

Given the creative bookeeping and interlocking related corporations, I am not sure the NHLPA wants to take on the task of auditing the books. The NHLPA tried for 5 years to get the financial information but have been rebuffed.

In the NFL and NBA the books were opened, a formula for revenue was negotiated then the percentage was set. The NHL owners want to skip the first step and say to the players "trust us" - the players do not and with very good reason.

Take a look at the civil racketeering case filed by Dave Forbes, et. al against Eagleson and all the NHL owners and the NHL pension case to see the extent of misappropriation and financial skullduggery.

Wirtz and Ziegler as well as some other owners should have gone down with Eagleson but they cut a deal with the FBI for immunity and testified against Eagleson according to Tim Daly the FBI agent in charge.

To agree to a hard cap would require trust - and the NHLPA simply does not trust the owners.

Given the financial misdeeds of a number of the owners, who can blame them. Just last month Jacobs and the Bruins have been nailed for hiding broadcast revenues from the state of Massachussetts and ordered to pay over $3 million dollars for back taxes. Given that the state corporate tax rate is 9.5%, that is about $30 million in hidden revenue. If Jacobs is prepared to hide revenue from the tax authorities why would he accurately disclose it on a voluntary unaudited basis to the NHLPA via URO's?
 

Russian Fan

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Wetcoaster said:
Pardon????

The reason there can be no hard cap is the the NHLPA cannot trust the figures being peddled by the owners. Hence a luxury tax.

Also because he revenue sharing plan propose by Daly or Bettman or the NHL lawyers is not meaningful enough

I just hope without being transforme as a pro-player that people would realize that the PA is TRYING TO HELP THE SMALL MARKETS HERE.

If a revenue sharing plan would really being offer in the negociations, I think a soft cap to luxury tax to hard cap would be accepted.


We hear Saskin talking a lot about a revenue sharing plan not ''MEANINGFUL ENOUGH'' here.
 

CarlRacki

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Russian Fan said:
Also because he revenue sharing plan propose by Daly or Bettman or the NHL lawyers is not meaningful enough

I just hope without being transforme as a pro-player that people would realize that the PA is TRYING TO HELP THE SMALL MARKETS HERE.

If a revenue sharing plan would really being offer in the negociations, I think a soft cap to luxury tax to hard cap would be accepted.


We hear Saskin talking a lot about a revenue sharing plan not ''MEANINGFUL ENOUGH'' here.

Once again, the revenue sharing issue is being raised by the PA as a red herring. Whatever system is put into place, the players are going to get theirs regardless of revenue sharing. Say the cap is set at 54 percent of revenues. That 54 percent is the same whether there is no revenue sharing or 100 percent revenue sharing. The players have nothing to gain (or lose, for that matter) from revenue sharing.

Wetcoaster ... Saskin never said the PA would consider a cap if there were NFL-style revenue sharing. Here's what he said:
"If Bettman wants to revenue share 70 percent of all their revenues we can look at different mechanisms, but they have made pretty plain to us that they have only the most nominal, nominal notions of revenue sharing. We're the ones who are trying to push the envelope and get more revenue sharing and we are willing to take taxes on player payroll to try to create pools for revenue sharing. I think it's important."

Where does he use the word cap or infer the players would accept a cap? He doesn't. He suggests the players would accept "a tax on player payroll", i.e. a luxury tax. A luxury tax, by the way, could be just as inflationary as it is deflationary, and the PA well knows this. But that's a subject for another thread.

Moreover, Saskin has enough intelligence to know that NFL-style revenue sharing is all but impossible in the NHL because of the league's TV situation. His comments are, at best, disingenuous.

As for the $6 million cap that started this discussion, I agree it's unnecessary. My guess (and it's only a guess) is that the league's trying to win over some of the lower-paid players. If the top dogs can receive no more than $6 million in a $42 million cap, that means more money for the rest of the roster.
 

Liquidrage*

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I side more with the owners in this because of think the NHL is broken atm.


But if I'm the owners I don't go hellbent towards a hard cap, I play with the softcap idea.


What if the softcap was (54% of revenue)/(number of teams) and going over the softcap was a $4-1 ratio. So if the Flyers were 1 million over the softcap they owe the league 4 million and that 4 million is split amongst the other teams.

Now I'm just throwing numbers out there, but I think there's room and a way to turn a soft cap into a virtual hard cap. Teams are really going to think twice before going over a soft cap if there's a real penalty (read: not like baseballs joke penalty) and if the revenue generated from the penalties go to other teams, that have a minimum they can spend, why not just work that system out.

At least it would be more common ground then now.

Right now the players are locked into softcap. The owners are locked into soft cap. The only way to reach an agreement with a side caving is either to make a rediculously high hard cap so as to make it meaningless (no help) or make a softcap that is very hard and actually fixes things (this would help).

I just think both sides at this point don't want to get a deal done based on principle. They both just want the other side to cave.
 

dakota

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Wetcoaster said:
The NHLPA has said if the NHL is prepared to share revenues at the percentage levels of the NFL then they will talk about a salary cap.

The hook for that is that some owners then have a stake in keeping other owners honest.

Given the creative bookeeping and interlocking related corporations, I am not sure the NHLPA wants to take on the task of auditing the books. The NHLPA tried for 5 years to get the financial information but have been rebuffed.

In the NFL and NBA the books were opened, a formula for revenue was negotiated then the percentage was set. The NHL owners want to skip the first step and say to the players "trust us" - the players do not and with very good reason.

Take a look at the civil racketeering case filed by Dave Forbes, et. al against Eagleson and all the NHL owners and the NHL pension case to see the extent of misappropriation and financial skullduggery.

Wirtz and Ziegler as well as some other owners should have gone down with Eagleson but they cut a deal with the FBI for immunity and testified against Eagleson according to Tim Daly the FBI agent in charge.

To agree to a hard cap would require trust - and the NHLPA simply does not trust the owners.

Given the financial misdeeds of a number of the owners, who can blame them. Just last month Jacobs and the Bruins have been nailed for hiding broadcast revenues from the state of Massachussetts and ordered to pay over $3 million dollars for back taxes. Given that the state corporate tax rate is 9.5%, that is about $30 million in hidden revenue. If Jacobs is prepared to hide revenue from the tax authorities why would he accurately disclose it on a voluntary unaudited basis to the NHLPA via URO's?

Wetcoaster might be swaying me a bit... some of these owners dont seem all that trustworthy.... but it would be good for the players to lock them into bed with eachother so they have to be truly partners with all teams and players... wow how come this Jacobs thing did not hit the news on TSN???

EDIT I just found this on Jacobs http://business.bostonherald.com/businessNews/view.bg?articleid=63593&format=

It says most of this is from a few years ago 91-94 and the court found he may actually have a point in what he was arguing... just fyi
 
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misterjaggers

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Wetcoaster said:
54% of what????

There is no meeting of the minds on revenues and the owners refuse to open all the books.

The NHLPA wants no part of percentages given the NHL owners past history. As far as they are concerned it is a mug's game to go down that road unless the NHL agrees to share revenues with one another at an NFL percentage level then there is incentive for the figures to be poiced by other owners.
"Past history" included a corrupt NHLPA boss and his cozy relationship with the league. Alot has changed.
 

CarlRacki

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vanlady said:
Trust is the basis of the whole reason there is no deal, why no trust, money.

So do you believe the players would eagerly accept a salary cap if they were convinced the owners' integrity were beyond reproach? I doubt it, but that's just my opinion.
Trust, IMO, has very little to do with the reason there is no deal. Trust can be addressed through independent audits. Trust is a red herring.

The reason there is no deal is because the players know a cap would deflate salaries well beyond their 24 percent rollback and well beyond a luxury tax. I can understand their position, but I wish they'd at least be honest about it.
 

oil slick

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John Flyers Fan said:
If and obviously it's a big if at this point, the owners manage to get a Hard Salary Cap put into place, along the lines of what they're speaking 54% of total revenues, I don't see how or even WHY they are even worrying about items like:

Individual salary cap
Entry level salary cap and length of years
Arbitration system
etc.
etc.


If a team can only spend to a maximum of $38 million, why should owners or Bettman care how that money is split up ???

If a team is dumb enough to pay someone $10 million or 25% of their allotment, then let them. They'll pay for it on the ice.

If someone wants to pay Sidney Crosby $6 million as a rookie, go ahead.


Well arbitration sure isn't irrelevant. Someone wants to pay Sidney Crosby 6 million, then go ahead, but with certain arbitration systems, Ovechkin is in there getting his 6 million too.

I'd agree with the others though.
 

discostu

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While I do agree with some of your points here (that once a cap is in place, everything else takes on a diminished role) everything will still have an impact on the competitive balance of the league, which in turn, impacts the revenues (of which, both players and owners would want maximized in "linkage" system).

For example, even if there was a cap set at 60% of revenues, you still wouldn't want to see all players get UFA status every year. The player movement every year would be tremendous, and fans would lose interest if there was nearly a complete roster turnover in their team. There also wouldn't be much motivation to develop players over a long term, as you would have little chance of retaining them. I don't think either the owners or players would want a system like that, due to the impact on revenues.

Still though, I do agree the owners seem very caught up in some of the smaller details if they are still so hung up on a cap. It's actually as if the owners are worried that some teams will find ways around the cap very easily, and they want a second set of safeguards to protect them. Either that, or they plan on offering these smaller concessions in the negotiations, but we're at a point where it makes little sense to hold strong on those items if you're planning to give them up. It's go time, and I think anything in the proposal is something that's high on their want list, and they're not interested in giving them up without a fight.
 

me2

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Liquidrage said:
I side more with the owners in this because of think the NHL is broken atm.


But if I'm the owners I don't go hellbent towards a hard cap, I play with the softcap idea.


What if the softcap was (54% of revenue)/(number of teams) and going over the softcap was a $4-1 ratio. So if the Flyers were 1 million over the softcap they owe the league 4 million and that 4 million is split amongst the other teams.


The NHLPA has already rejected those types of schemes.
 

CarlRacki

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vanlady said:
If you talk to an accountant about auditing a company that has multiple layers, they will tell you that if the owners are determined to hide revenue, there is not a chance an audit would discover it. A forensic auditor told me that it would take a team of hundreds of accountants the entire summer to get a reasonable accurate number and even then there is no guarentee.

If the NBA and NFL - both of which are dealing with significantly larger revenues and revenue sources - can manage thorough, independent audits every year, I find it hard to believe that it would require "hundreds of accountants the entire summer" to do so for the NHL. Methinks your forensic auditor is way off base.
 

Greschner4

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John Flyers Fan said:
If and obviously it's a big if at this point, the owners manage to get a Hard Salary Cap put into place, along the lines of what they're speaking 54% of total revenues, I don't see how or even WHY they are even worrying about items like:

Individual salary cap
Entry level salary cap and length of years
Arbitration system
etc.
etc.


If a team can only spend to a maximum of $38 million, why should owners or Bettman care how that money is split up ???

If a team is dumb enough to pay someone $10 million or 25% of their allotment, then let them. They'll pay for it on the ice.

If someone wants to pay Sidney Crosby $6 million as a rookie, go ahead.

I generally agree, but in the NBA before they put in the defined rookie contracts the negotiations with rookies would go:

Agent: I want $30 million for five years.

Team: If we resign Player X and Player Y (free agents), we won't have enough cap room.

Agent: Then give them less money. Better yet, don't resign them.

Naturally the vets like X and Y got mad that their money was getting taken by unproven rookies, and the rookie scale was put in.
 

me2

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John Flyers Fan said:
If and obviously it's a big if at this point, the owners manage to get a Hard Salary Cap put into place, along the lines of what they're speaking 54% of total revenues, I don't see how or even WHY they are even worrying about items like:

Individual salary cap
Entry level salary cap and length of years
Arbitration system
etc.

If a team can only spend to a maximum of $38 million, why should owners or Bettman care how that money is split up ???

If a team is dumb enough to pay someone $10 million or 25% of their allotment, then let them. They'll pay for it on the ice.

If someone wants to pay Sidney Crosby $6 million as a rookie, go ahead.

Individual salary cap

No skin of the owners noses if they don't get this one. If anything you'd think the lesser memebers of the NHLPA would be pushing for it to ensure the stars didn't suck up the all the cap space. Having an individual cap just makes it a bit easier to plan.


Entry level salary cap and length of years

Good for the NHL as a whole. There is still a 30% gap between the $32m payrolls and the $42m payrolls. Some teams will still try and build cheap draft driven teams, others will be prepared to sign 2 or 3 more UFAs. This gives the weaker teams more chance and cuts down on rookie holdouts and players trying to return to the draft. It ensures every team should be able to sign its prospects, at least for the 1st 4 years.

This is good for the NHL as a whole even if it does screw over the young players for one extra year. A healthy profitable league is better for their long term interests.


If someone wants to pay Sidney Crosby $6 million as a rookie, go ahead.


It wouldn't be the end of the world but it also wouldn't be in the leagues bests interestests either.


Arbitration

Arbitration is in because both sides want it. Well the player really don't want the owners to have it but they'll get stuck with that since they want to keep it for themselves.


-----------------------------------------------

At the end of the day the size of the pie won't increase or shrink in a given year. So no matter how they divide it up the players get their 53-55%. If the rookies get screwed for the 1st 4 years, it just means that there will be more pie for the older players. In future years they will be those older players getting more of the pie than the next crop of rookies.

Everyone has to aim to make the pie bigger between years. A healthier NHL means more pie for everyone. If these tweaks make the pie bigger everyone benefits.
 

quat

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Wetcoaster said:
Pardon????

The reason there can be no hard cap is the the NHLPA cannot trust the figures being peddled by the owners. Hence a luxury tax.

I don't think you are correct. The PA didn't want to discuss any kind of linkage, and wouldn't agree to an impartial third party. The NHL chose one, who offered to discuss any findings or questions with the PA. They refused, and then started saying they can't trust the Owners numbers.

It's not that they cannot, it's that they won't. There is a difference.
 

quat

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Wetcoaster said:
No it was not.

No faith in the figures - no hard cap.

If you think that if the PA had complete faith in the figures they would accept a cap, you are crazy. Dude, they don't want any kind of linkage because it slows down the increase in salaries. You make it sound impossible to legally impose trust, which flys in the face of how our whole economic society is organized.
 
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