News: Salary Cap staying at 81.5M

[TheFinalWord]

I'm not arguing anything. I'm looking at what each sides' positions would be.

As you say, the league is within its rights to go to the 50/50 split. The spirit of the rule is that they are in it together.

However, the players could say that the agreement was not made with this type of event in mind. It was supposed to be on the trends, about the health of the league. And, even if it is not ethical, the players have PR power here. All they have to do is raise the issue and the league would want it to go away. Just think of all the crap that owners got into for not paying temporary staff during this stoppage.

edit: and btw, I'm not sure, but what's happening to NBA, MLB pay?

Do you think the PR is the same for millionaire hockey players, as it is for low wage earning staff? Do you think most people would care in the least if the players were upset they had to continue to split HRR 50/50? I doubt this is a PR issue the league is worried about.

 

[Mr Positive]

Neither the players or owners want a 40% cap ceiling reduction. The chaos hurts both sides. What is undisputed is that revenues are to be split 50/50.

The relationship between owners and players is quite good. The players already agreed to forego their last paycheck to buy time for the dust to settle. See article below.

Flat cap is the likelihood solution.

LeBrun Reports NHL Players Postpone Final Paycheck, Cap Reasons

That's a good source, thanks. But it does say they gave up that check because it allowed for discussions to continue to save the season. It is also a great PR move.

But you are right that the players would not drag this out or want it to be a fight. But then, why is there negotiation at all? I think there will be behind the scenes hardball here.

Maybe there won't be much dispute, but just like how the players were so generous in giving up their final check, don't be surprised if the owners are so 'generous' that they will give the players more than 50% revenue for just one season. Even if it is 55%

 

[deckercky]

The players will grumble, but accept their 50% because that's what was agreed. Work stoppages significantly impacting league earnings aren't even abnormal for the NHL.

 

[Mr Positive]

Do you think the PR is the same for millionaire hockey players, as it is for low wage earning staff? Do you think most people would care in the least if the players were upset they had to continue to split HRR 50/50? I doubt this is a PR issue the league is worried about.

idk, like I said, it might depend on how the other major leagues are paying their players.

 

[Junohockeyfan]

That's a good source, thanks. But it does say they gave up that check because it allowed for discussions to continue to save the season. It is also a great PR move.

But you are right that the players would not drag this out or want it to be a fight. But then, why is there negotiation at all? I think there will be behind the scenes hardball here.

Maybe there won't be much dispute, but just like how the players were so generous in giving up their final check, don't be surprised if the owners are so 'generous' that they will give the players more than 50% revenue for just one season. Even if it is 55%

the only decision / agreement is to determine a cap ceiling and escrow percentage that minimizes chaos while at the same time sets a reasonable escrow contribution. They could agree to spread losses over a 3 year period as a vehicle to this goal.

or, they can tally up the revenues, make the split/paybacks and then agree on an artificial cap ceiling based on a projected 2020/2021 revenue rather than based on the disaster that is 2019/2020.

 

[Mr Positive]

the only decision / agreement is to determine a cap ceiling and escrow percentage that minimizes chaos while at the same time sets a reasonable escrow contribution. They could agree to spread losses over a 3 year period as a vehicle to this goal.

or, they can tally up the revenues, make the split/paybacks and then agree on an artificial cap ceiling based on a projected 2020/2021 revenue rather than based on the disaster that is 2019/2020.

I'm intrigued by the idea of spreading out revenues and losses over several years, but we're not seeing reports of the NHLPA suggesting that. Maybe that's enough, just to make it so that they don't take a huge finiancial hit all at once, which I get. They are millionaires, sure, but would understandably have bigger house payments than we have.

But yes, I am doubtful that it will be a 50% split like so many insist on. Both sides are trying to play nice here, and give that image to the world, but some frustration has leaked out from the players' end.

 

[Junohockeyfan]

I'm intrigued by the idea of spreading out revenues and losses over several years, but we're not seeing reports of the NHLPA suggesting that. Maybe that's enough, just to make it so that they don't take a huge finiancial hit all at once, which I get. They are millionaires, sure, but would understandably have bigger house payments than we have.

But yes, I am doubtful that it will be a 50% split like so many insist on. Both sides are trying to play nice here, and give that image to the world, but some frustration has leaked out from the players' end.

I can’t see the players being frustrated. They have already been paid. They are holding the pot. They are the ones that are required to payback per the cba agreement.

the key here is that neither side did anything wrong. The players aren’t locked out by the owners. Both the players and owners are locked out by a virus.

I don’t see anyone feeling sorry for millionaires when half the population are living check to check and barely making ends meet during these times. Unemployment at record highs...

Yeah, the players wouldn’t dare pull any shenanigans, hoping PR would carry them through.

 

[TheFinalWord]

I'm intrigued by the idea of spreading out revenues and losses over several years, but we're not seeing reports of the NHLPA suggesting that. Maybe that's enough, just to make it so that they don't take a huge finiancial hit all at once, which I get. They are millionaires, sure, but would understandably have bigger house payments than we have.

But yes, I am doubtful that it will be a 50% split like so many insist on. Both sides are trying to play nice here, and give that image to the world, but some frustration has leaked out from the players' end.

You're doubtful they'll follow the contracted agreement? You think the owners are going to want to be paid less? I'm not sure where you're getting the idea that the owners, how are already going to be out many millions of dollars, are going to decide that for 'PR' reasons, they want to lose even more by not having a 50/50 split.

 

[Wingsfan 4 life]

There isn't really any alternative that changes anything. Players get 50% of HRR, whether that's 65 million per team with a cap of 81.5 and a lot of escrow, 65 million per team with a cap of 75 million and a moderate amount of escrow, or 65 million with a cap of 65 million and no escrow it's still 65 million per team for the players as a whole. Except a cap of 65, 70, or probably even 75 million isn't realistic without scaling back cap hit and salaries. Which would be the exact same thing as escrow except as a different mechanism. There's already too much money committed for next year to tell teams they can only spend 70 million and figure it out. You put 1 person in charge of every teams transactions and try to even it out best they could it probably still wouldn't be possible. You'd basically be putting every free agent except the elite on the street and even the elite would barely get anything because nobody would have any money.

Compliance buyouts aren't a realistic solution either. It would lower teams cap hits, but players still get at least 67% of that money and likely a lot more with signing bonuses. That counts against the players share of HRR. Then said player will sign somewhere else, and be replaced by someone else on the team they left costing more money. That could very well result in even more escrow for the players than a flat cap would.

Players get 50% of HRR. HRR is going down. The players are going to get less. That's the way the league works. The way the go about that will be decided, but players being upset at losing money isn't going to change it because that's inevitable.

Well, there's definitely no alternative next year, since it'll still be under the current CBA standards. They have no choice but to suck it up.

Players didn't withhold their last paycheck because they thought they were payed enough for the year. They did it to help stem the flow of the massive hemorrhage of escow payments they'll inevitably have to make next year.

In dark financial times like this, I would think players expect to pay more into it. Its the rosy record revenue times that I don't think players expect to pay. At the least, nowhere close close to what they have been. The % has been in the double digits every year since the last lockout season.

There's no way I see a new CBA agreed upon with escrow staying even slightly the same as it currently is.

 

[John Eichel da GOAT]

Seems way too early for a decision to be made on this. Im calling shenanigans.

 

[themelkman]

Seems way too early for a decision to be made on this. Im calling shenanigans.

It really isnt. If you dont think the NHL has all the accountants and numbers guys on this your wrong

 

[Canada4Gold]

Seems way too early for a decision to be made on this. Im calling shenanigans.

Shenanigans as in the NHL and PA got together and said if and when the NHL resumes it's not going to be in front of fans so and revenue is going to be at a record low and the natural cap number would be sub 70 million but that's not feasible, so they mutually agreed to let in stay flat and the players will deal with escrow if next year is greatly affected knowing it was a global pandemic that caused this and not a natural decreasing of HRR? Yeah, that's probably the "Shenanigans" that happened. Which is completely allowed.

 

[Iggys Dome]

I think this would be best case scenario...fingers crossed.

 

[Alberta_OReilly_Fan]

there is a way out of this that I am surprised no one ever grumbles about

now everyone and their dog agrees that new revenues from gambling/tv deal is about to send hrr through the roof... so there is a huge expected raise in cap money right around the corner

this year... an act of god crushed the hrr for a single season

when people in the real world want to have money today and know they can repay it in the future... they take a loan.

I propose that the nhl owerns/league in joint cooperation with the union/players take out a 'loan' against future earnings to fully fund payment of players salaries and the cap this year. payment for revenue sharing to the poor owners would also be funded. everything would play out as it was supposed to this year... next year

then when the extra money was supposed to suddenly boost hrr in a couple years... the money goes towards the debt repayment. so there is no huge bump to the cap 2-3 years from now and no giant dip this year/next year

the effect is the same everyone is talking about... keeping the cap flat for afew years... but now the idea is properly funded. todays players dont eat crap with an escrow in the 25-35% range. why have todays players suffer such a massive penalty when its their sweat and blood that sets the table for the new tv deal on its way? why let future players get fat without paying any of the pain and blood of todays suffering?

as for the owners… doesnt hurt them either. they are only taking 50% of the debt. they are repaying it out of future tv money and gambling money which they would be splitting among themselves anyhow. they get more money today and less money tomorrow. it all balances out for them

 

[BLONG7]

They are talking about potentially losing 550M in revenue..........as mentioned above there are a ton of ways around this, as long as people don't think the 550M has to be all re-couped in one year. Pro-rate it over time, and ease the pain...
A flat or reduced cap is more than likely, but don't hang the PA with a 30% escrow in ONE season....that would be insane.

 

[Empoleon8771]

I feel like the NHL should just plan on the cap remaining flat for the next 3-4 years, with gains from years 2-4 making up the losses in year 1.

 

[Legion34]

I feel like the NHL should just plan on the cap remaining flat for the next 3-4 years, with gains from years 2-4 making up the losses in year 1.

it will all depend on what they end up losing.

the NHL has already made about 4 billion based on projecting 84-88. They have to make about a billion more to “break even”.

From the atheletic player salaries are about 2.5 billion. So again that makes it a 5 billion dollar year. Moreover. They already gave 14% escrow.

That means 350 million is already in the pot.

So that makes the current split 2.5 billion-350 million = 2.15 billion for the platers. 1.85 billion for the owners.


to “break even” for this year the league will have to make up about 300 million in revenues this playoff to even up the split from what I can figure.


that’s doable. Locking the cap for a few years Wouldn’t help in that case I don’t think

 

[sabresnyper]

This would be great for Buffalo. A ton of money coming off the books and teams will be strapped....nice

 

[Legion34]

This would be great for Buffalo. A ton of money coming off the books and teams will be strapped....nice

I think you missed the athletic article about ownership

 

[ole ole]

A flat rate of 81 mil coupled with 1 compliance buyout. I love it.

 

[mouser]

it will all depend on what they end up losing.

the NHL has already made about 4 billion based on projecting 84-88. They have to make about a billion more to “break even”.

From the atheletic player salaries are about 2.5 billion. So again that makes it a 5 billion dollar year. Moreover. They already gave 14% escrow.

That means 350 million is already in the pot.

So that makes the current split 2.5 billion-350 million = 2.15 billion for the platers. 1.85 billion for the owners.


to “break even” for this year the league will have to make up about 300 million in revenues this playoff to even up the split from what I can figure.


that’s doable. Locking the cap for a few years Wouldn’t help in that case I don’t think

You need to factor in:

- $120-140m in non salary benefits. Note: some of these would be reduced if there's no playoffs.
- The players were still going to lose 5-10% of the escrow even if this season wasn't suspended.

Rough napkin math:
- Revenue in 2018-19 was approximately $5.1B.
- Per the December BoG guidance, the NHL was projecting approximately a 4% increase in revenue this season, which would be a total of ~$5.3B
- Players would receive ~$2.65B. Subtracting out $130m for non-salary benefits means players receiving about $2.52B in salary.
- Players last season lost 9.8% of their paychecks to final escrow.
- With the slight lowering of the escalator for 2019-20 let's assume the players were on course to lose 8% in 2019-20.
- 8% loss would translate into player compensation in 2019-20 projected at $2.74B.

- Per Larry Brooks, the PA informed its members that worst case scenario for the players would be 35% escrow loss (this includes the withheld 14%). Presuming this scenario is season canceled, but could possibly include revenue that is eventually collected.

- Losing 35% of $2.74B would mean the players giving up $960m.
- The 35% figure would translate to HRR for 2019-20 of approximately $3.75B. A 30% drop from the $5.3B projection. Note: I reduced the non-salary benefits here to $90m to back out some of the non-payed league playoff bonus money.

 

[HuGo Sham]

A flat rate of 81 mil coupled with 1 compliance buyout. I love it.

#KarlAlzner

 

[Alberta_OReilly_Fan]

as far as compliance buyouts go... that hurts the small market teams first of all since the money is still coming from somewhere. its not really great for the big market teams either cause it basically just says we will fix one of your mistakes by paying to make it go away... the mistake was still made in the first place. whatever money is spent on the buyout still gets spent. it still come out of pocket. its a loss no matter how you want to sugar coat it

but worst than that... guys are going to lose their jobs. most compliance buyouts are vetern players. players who sacrificed to build the league. most the buyout players are players who went through the last lockout or two and lost seasons of pay because they were promised they could make the lost money back on their next contracts and the future. so if you compliance buyout someone now, you are taking away someones job and taking away some money they were guaranteed under the cba they scarficed themselves for.

and who benefits? compliance buyouts just free up some cap room for future players to fit under a tight cap. its only future players that would ever benefit under any compliance buyouts... future players AND idiot gm's who screwed up stupid offers in the past. so we are awarding future players and idiot gm's if we allow compliance buyouts and meanwhile we are punishing teams that manage contract properly and have no need for a compliance buyout and punishing some vets who sacrificed to build this league and maybe ran into some health problems as a result.

like david backes..he might get compliance boughtout but he didnt become a bad player because of lack of effort. the dude got a series of concusions because he played his heart out. most the vets who are facing the possibility of compliance buyouts earned their contract when they were underpaid early in their careers. now todays kids get these 10 mill dollar contracts after 3 years... but they never earnt it. if anyone should be getting their money cut now its these kids who got paid because ''the cap is going to raise, so we got to pay them based on how high the cap is going to me in 3 years time"

 

[Legion34]

You need to factor in:

- $120-140m in non salary benefits. Note: some of these would be reduced if there's no playoffs.
- The players were still going to lose 5-10% of the escrow even if this season wasn't suspended.

Rough napkin math:
- Revenue in 2018-19 was approximately $5.1B.
- Per the December BoG guidance, the NHL was projecting approximately a 4% increase in revenue this season, which would be a total of ~$5.3B
- Players would receive ~$2.65B. Subtracting out $130m for non-salary benefits means players receiving about $2.52B in salary.
- Players last season lost 9.8% of their paychecks to final escrow.
- With the slight lowering of the escalator for 2019-20 let's assume the players were on course to lose 8% in 2019-20.
- 8% loss would translate into player compensation in 2019-20 projected at $2.74B.

- Per Larry Brooks, the PA informed its members that worst case scenario for the players would be 35% escrow loss (this includes the withheld 14%). Presuming this scenario is season canceled, but could possibly include revenue that is eventually collected.

- Losing 35% of $2.74B would mean the players giving up $960m.
- The 35% figure would translate to HRR for 2019-20 of approximately $3.75B. A 30% drop from the $5.3B projection. Note: I reduced the non-salary benefits here to $90m to back out some of the non-payed league playoff bonus money.

so I was only off by 600 million or so? Lol.

Either way they have to claw back as much as they can. Of course it’s most likely NO fans.but.

Interestingly, neely was talking about less fans rather than no fans. Depending on arenas etc. If they did bigger NHL cities. I mean I could see.

x. - - x. — - x.
X. X.

etc. Spreading out say 6000 people in an 18000 person stadium would work. Of course that is cart waaaay before the horse, but we will see how the world is coming out of this. Most likely. No fans.

Either way. If they are planning on finishing the season. I guess it would be all divisional play? For the last 10-12 games. That would be a tough sell.