SImple Question for the Pro-owner crowd

[A Good Flying Bird*]

Calgary and Edmonton still can't compete under that cap. Some teams could reach the max, other teams couldn't. Same old same old.

I'm trying to keep this in context.
Where we've been. WHere we are. Where we are going.

So Detroit has an extra six million to play with a 49M cap. So now they can spend $19M more than Edmonton instead of $13M more than Edmonton.

Last year, they spent $49 Million more than edmonton.

I'd say that either option 1 or 2 is a helluvalot better than what we've just seen.
It's not even close.

So we're making progress, right? The PA's proposal cuts Detroit's advantage by $30 Million. The players cuts it by $36 Million.

I don't see how anyone could argue that even the difference between the PA and NHL prosal is very significant, given where we are coming from.
(I am not suggesting that the PA's offer is ideal, I am saying that the PA and NHL are closer to a deal than most people seem to suggest and that the NHL has made great gains so far)

Now lets talk about the future. What happens to league if there is no season? WHat happens to HNIC? What happens to attendance? What happens to ESPN ratings? Does American network television just tell the NHL to get lost, once and for all?

Is it really worth it? COnsidering where we're coming from and the gains that have already been made?

I just don't understand the vitriol between pro-player-pro-owner people, considering how little the difference actually is now.

 

[CarlRacki]

Restricted. Free. Agency.

Arbitration. Holdouts.

 

[Beukeboom Fan]

I want to see the league sustain each of its 30 franchises, and cannot understand how any legitimate NHL fan would wish otherwise. However, to what end do you go to sustain the poorest teams? Another poster in this thread suggested - and I have no reason to challenge him - that the Oilers can only sustain a budget in the low-to-mid $30 million area....and that figure would put them an unfair $20 mil below the top teams.

Is the only answer to lower the bar (the cap) to appease the most economically challenged franchises? That is, use the lowest common denominator to dictate the payroll benchmark?

I agree with you to a certain extent. If the small market teams could sustain a $30M payroll, you're looking at a 40% premium going to $42M, or a 60% premium going to $48M. Not necessarily a huge difference, especially compared to 2004 when you were looking at 150% differential.

The big issue to me is that he PA offer of $49M was complete and utter BS. They were absolutely against any sort of "linkage" where they would share the pain the lockout has caused. But they were sure willing to cash in on the recovery (hopefully) by indexing the salary cap on likely VERY GREATLY reduced revenue stream in 2005-06.

I expect that the in the first year back, the league revenues are going to fall by at least 33%. The league is already out about $120M on the TV deal, and I expect that all of the teams will reduce ticket prices to get fans back into the seats. Add in reduced advertising and corporate sponsorship spending, and I'd be shocked if the league revenues didn't fall by at least 25%, and I bet my 33% estimate is conservative.

I was originally very pissed because only a very small portion of the teams would ever get over the $42M proposed owner cap, but when I saw the PA's offer, it was VERY evident that their proposal wasn't a "real" cap. IMO, the two sides were never only $6.5M apart, because the two cap proposals were in no way equivelant in the details.

 

[Taylor21]

The difference between 6.5 million when combined w/arbitration and index will just continue the rise of salaries.

The Rangers will be able to use all of that 49 million. They sign player A for 7 million and his current smaller mrkt (Oilers, who will never be able to afford 49m payroll) affixes price of 4 million. He signs with Rangers. That has now set the market for players at that level of 7 million.

Top that off with arbitration, all players of that level will want the 7 million. Future players will want the 7 million +, or neogiate off that number.
So the Oilers will have to start letting players go or pay the price and now their payroll will climb.

So as Bettman said the salary cap will become a magnet for player salaries or teams will drop/trade/let go/players to keep payroll affordable and therefore be most likely non-competitive.

This doesn't factor in the index which would all but increase the salary cap and make the difference between the haves and haves not greater. And Then add on the exception allowing teams to go over the cap by 10% and the players system is not much different then the current system.

 

[txomisc]

in what terms though, financial?

Yes, there is Financial Parity and there is Performance Parity. Alot of people seem to get them mixed up. When I saw I want reasonable parity, that does not mean I want performance parity. It means I want teams to have a reasonable enough financial opportunity to build and maintain a winner. When there is such a huge disparity in the amount teams can spend I think its damn near impossible to accomplish this. Like I said, I don't want every team to pay and play exactly the same, I just want reasons other than those based on finances to at least be a higher percentage of the cause of team skill differences.

 

[A Good Flying Bird*]

Yes and no.
The cap won't give Edmonton an extra $20 million to buy players with, but it will give the Oilers more bang for the bucks they do have because it acts as a depressant on salaries. Suddenly Detroit can only pay $5 million to a player they could otherwise buy for $9 million. At a price of $5 million, that player is much more affordable for revenue-deficient teams like the Oilers.
The second thing the cap does is limit the number of high-priced players a team can afford. No longer will the Flyers (my team, FWIW) be able to pay a guy who could be a second-line player in Edmonton $3 million to play on their third line. The cap won't allow it.

So with an extra $6M on the cap, Detroit may offer $5.5 Million instead of $5 million, which still seems like a far cry from the $9M they offered last year.

When it comes to the model you are talking about, a $49 M cap isn't terribly more inflationary than a $43M cap.

 

[likea]

so then the obvious solution is to have all teams spend let's say $30 million - this is what those in the pro-owner camp must mean by the term "parity"?

I never said that at all

allow teams to get within 10 million of each other, 1 to 2 player difference is not that great....20 million is huge and to big of a gap

 

[CarlRacki]

So with an extra $6M on the cap, Detroit may offer $5.5 Million instead of $5 million, which still seems like a far cry from the $9M they offered last year.

When it comes to the model you are talking about, a $49 M cap isn't terribly more inflationary than a $43M cap.

With an extra $6 million to spend, why would they only offer an extra $500K? I'm not sure I understand what you're trying to say.

 

[A Good Flying Bird*]

You can't guarentee that. Just because no teams will be spending 70 million dollars on salary, salaries will be down and stay down? By allowing a 49 million dollar cap, all it needs to happen is for Detroit to trade Shannahan and Cujo to Minnesota and for Toronto to trade Belfour and Nieuwendyke to Florida for the salaries to stay consistent.

Not a chance.
Where does Minnesota suddenly get the money to pay for Cujo?
Amd where does Florida suddenly get the money.

The rich teams are still the rich teams, cap or no cap. And the poor teams are still the poor teams.

 

[Beukeboom Fan]

I was shocked to see the players give in on the cap, despite all the criticisms levied at the PA's proposal. I thought it would enable the two sides to actually get a deal done.

It just seems so damn petty to cancel the season when at long last, the two sides were actually talking the same language, at least somewhat.

I thought the same thing, until you look at the "inflation" potential in the PA's proposal. The $49M cap could VERY easily become $70M when the league eventually recovers to it's current revenue stream ($2.1B). That let's the big spending teams get back to where we are right now.

(My calculation based on a 33% revenue hit in 2005-06, to $1.4B. That would become the "index" year. If the league was able to grow back to $2.1B, that would be 50% growth, which would increase the cap limit to approx $73.5M). How is that helping?

 

[nedved93]

Yep. And keep in mind, what we're discussing here is only economic parity. That doesn't guarantee parity on the ice, it only means the disparity won't be the result primarily of economic factors.

Good management, coaching, player development will only matter more under a cap because it prevents the big revenue teams from spending their way out of mistakes and allows the well-managed small revenue teams to reap the rewards of good decison-making.

we are co-owners of the senators in the new NHL complete with a $40 million hard salary cap. we just initiate a complete rebuild. we patiently draft and develop talent while our total salary is roughly $25 million. through hard work, we emerge from the rebuilding phase about three years later, to become competitive once again - our total payroll begins to creep steadily to $30 million, then reside firmly in the $30-$35 million range. our club is now fully developed, and has gained some solid playoff experience over the past two seasons. the pundits forecast that we'll be contenders for the cup, despite the devastating game 7 loss in the conference finals. however, we take a quick look at our total payroll and its right at that $40 million mark, but we ignore that problem for the time being focusing on the task at hand. the season draws to a close, and the pundits are proven correct - the senators are stanley cup champions! we've got a young team of proven winners, the question is, how do we maintain that core nucleus over the long-term given that our total salary is at the hard cap level?

 

[A Good Flying Bird*]

With an extra $6 million to spend, why would they only offer an extra $500K? I'm not sure I understand what you're trying to say.

They'd spread it out among the roster.
Currently Detroit has an extra $49 Million to spend. You don't see that going to one player.
Detroit isn't going to blow it's entire extra six million on one guy. Frankly, Detroit is already over Bettman's salary cap, and that's despite having Datsyuk as an RFA and Yzerman and Chelios not under contract yet.

 

[lazaer]

Finally, logically explain to me why it is worth it for your team to completely cancel the season based on a $6M difference in cap levels.QUOTE]

It is a 6.5 Million difference if your team can afford a 42.5 Million paylroll. That 6.5 only applies to a few teams. 42.5 to 49 Million is a huge difference to a 30 Million dollar payroll team.

 

[A Good Flying Bird*]

we are co-owners of the senators in the new NHL complete with a $40 million hard salary cap. we just initiate a complete rebuild. we patiently draft and develop talent while our total salary is roughly $25 million. through hard work, we emerge from the rebuilding phase about three years later, to become competitive once again - our total payroll begins to creep steadily to $30 million, then reside firmly in the $30-$35 million range. our club is now fully developed, and has gained some solid playoff experience over the past two seasons. the pundits forecast that we'll be contenders for the cup, despite the devastating game 7 loss in the conference finals. however, we take a quick look at our total payroll and its right at that $40 million mark, but we ignore that problem for the time being focusing on the task at hand. the season draws to a close, and the pundits are proven correct - the senators are stanley cup champions! we've got a young team of proven winners, the question is, how do we maintain that core nucleus over the long-term given that our total salary is at the hard cap level?

You don't.
You either drop a guy for a cheaper replacement. Or you blow up and rebuild.

 

[me2]

So with an extra $6M on the cap, Detroit may offer $5.5 Million instead of $5 million, which still seems like a far cry from the $9M they offered last year.

When it comes to the model you are talking about, a $49 M cap isn't terribly more inflationary than a $43M cap.

A $42.5m cap encourages build, playoffs, challenge, age rebuild. A relatively even distribution of teams at different life stages.

A $49m cap encourages build, playoffs, challenge, buy stars and challenge, buy stars and challenge, ...... rebuild. Its very top heavy and drives up salaries.

 

[nedved93]

Yes, there is Financial Parity and there is Performance Parity. Alot of people seem to get them mixed up. When I saw I want reasonable parity, that does not mean I want performance parity. It means I want teams to have a reasonable enough financial opportunity to build and maintain a winner. When there is such a huge disparity in the amount teams can spend I think its damn near impossible to accomplish this. Like I said, I don't want every team to pay and play exactly the same, I just want reasons other than those based on finances to at least be a higher percentage of the cause of team skill differences.

i'll state plainly that i'm against a hard cap (and i am a disgruntled rangers fan). i too want a league (not necessarily with 30 clubs) where team A can compete with team B. but i wonder how a salary cap accounts for the team development cycle? i wonder how a salary cap deals with the primary cause of the ridiculous salary inflation the league has witnessed this past decade, namely the arbitration/qualifier system? i wonder how a salary cap helps canadian teams deal with onerous levels of taxation, regulation, and adverse exchange rate movements? i wonder how a salary cap allows big-market teams to moderately subsidize their smaller-market brothers?

 

[A Good Flying Bird*]

Finally, logically explain to me why it is worth it for your team to completely cancel the season based on a $6M difference in cap levels.QUOTE]

It is a 6.5 Million difference if your team can afford a 42.5 Million paylroll. That 6.5 only applies to a few teams. 42.5 to 49 Million is a huge difference to a 30 Million dollar payroll team.

I understand.
But It's also important to remember that there will probably be two to four teams maxing out in the first few years.

And it's also important to remember that this is a huge improvement over what previously existed.

And it's also important to remember that the season and the future of the league, perhaps, hangs in the balance.

As a wings fan, I've lived high on the hog (after many years of mediocrity).
Still, I fail to see how the league could get hung up on such a petty number after the most difficult hurdle had been cleared.

ANd I don't understand why fans are so hateful toward the players when they've clearly, clearly, clearly made MAJOR concessions.

 

[txomisc]

we are co-owners of the senators in the new NHL complete with a $40 million hard salary cap. we just initiate a complete rebuild. we patiently draft and develop talent while our total salary is roughly $25 million. through hard work, we emerge from the rebuilding phase about three years later, to become competitive once again - our total payroll begins to creep steadily to $30 million, then reside firmly in the $30-$35 million range. our club is now fully developed, and has gained some solid playoff experience over the past two seasons. the pundits forecast that we'll be contenders for the cup, despite the devastating game 7 loss in the conference finals. however, we take a quick look at our total payroll and its right at that $40 million mark, but we ignore that problem for the time being focusing on the task at hand. the season draws to a close, and the pundits are proven correct - the senators are stanley cup champions! we've got a young team of proven winners, the question is, how do we maintain that core nucleus over the long-term given that our total salary is at the hard cap level?

If you have drafted well and signed your players well, losing 1 or maybe 2 guys won't necessarily hurt you. You should be able to turn those assets that you can't fit under the cap into assets you can fit under the cap. You are highly unlikely to lose your very best players. A smart, well managed team will leave itself a buffer to the cap.

 

[likea]

I thought the same thing, until you look at the "inflation" potential in the PA's proposal. The $49M cap could VERY easily become $70M when the league eventually recovers to it's current revenue stream ($2.1B). That let's the big spending teams get back to where we are right now.

(My calculation based on a 33% revenue hit in 2005-06, to $1.4B. That would become the "index" year. If the league was able to grow back to $2.1B, that would be 50% growth, which would increase the cap limit to approx $73.5M). How is that helping?

hey, can you point me to the the "inflation" potential in the PA's proposal

 

[jcab2000]

ANd I don't understand why fans are so hateful toward the players when they've clearly, clearly, clearly made MAJOR concessions.

They had to make those concessions because of a ridiculous starting point. They don't get credit for coming down to around where they should have started.

 

[Other Dave]

Arbitration. Holdouts.

The problem and the solution in two words! Bravo!

 

[A Good Flying Bird*]

A $42.5m cap encourages build, playoffs, challenge, age rebuild. A relatively even distribution of teams at different life stages.

A $49m cap encourages build, playoffs, challenge, buy stars and challenge, buy stars and challenge, ...... rebuild. Its very top heavy and drives up salaries.

Dude, I don't see it.

Maybe I'm dense.

But I don't see how a $6.5 Million difference (spread over 20 players) completely changes the face of the leage.

I agree that it's nothing to sneeze at. But I also recognize that the inequity is NOTHING compared to what we've just experienced.
And I don't think it's worth killing the league for.

 

[A Good Flying Bird*]

They had to make those concessions because of a ridiculous starting point. They don't get credit for coming down to around where they should have started.

I'm not talking about credit. I'm not talking about blame.
I'm talking about context.
This started during the last CBA, which both parties agreed to.

The players are no more to blame for the current NHL problems than are the owners. They both signed the contracts that led us to this place.

Like it or not, yesterday is where we were yesterday.

 

[CarlRacki]

we are co-owners of the senators in the new NHL complete with a $40 million hard salary cap. we just initiate a complete rebuild. we patiently draft and develop talent while our total salary is roughly $25 million. through hard work, we emerge from the rebuilding phase about three years later, to become competitive once again - our total payroll begins to creep steadily to $30 million, then reside firmly in the $30-$35 million range. our club is now fully developed, and has gained some solid playoff experience over the past two seasons. the pundits forecast that we'll be contenders for the cup, despite the devastating game 7 loss in the conference finals. however, we take a quick look at our total payroll and its right at that $40 million mark, but we ignore that problem for the time being focusing on the task at hand. the season draws to a close, and the pundits are proven correct - the senators are stanley cup champions! we've got a young team of proven winners, the question is, how do we maintain that core nucleus over the long-term given that our total salary is at the hard cap level?

That's a good question. For the simple answer, look at the New England Patriots and the Philadelphia Eagles. They've proven it can be done.

The longer answer is that successful teams will be those that build around a strong core of 6-8 top quality players that would eat up a little more than half your 2/3 cap room (say eight players with an average salary of $3.5 million or $28 million in all) then fill the rest of the roster with eight solid role players earning, on average, about $1.3 million, then give your final eight about $600,000 each.

Now, I'm sure your next questions is "What happens when those top 6-8 guys start demanding more than an average salary of $3.5 million?" Two things: First, under a cap they won't be able to demand a whole lot more than that because salaries over all will be deflated. Second, if and when that happens, you let the player go and replace him with someone you can afford.
This, of course, isn't all that different than what would happen to Ottawa under the present system. With $70 million in total revenue last year and $27 million in non-player costs (per Forbes) they're not going to be able to afford much more than $42.5 million in payroll regularly without going into the red regularly.

 

[txomisc]

i'll state plainly that i'm against a hard cap (and i am a disgruntled rangers fan). i too want a league (not necessarily with 30 clubs) where team A can compete with team B. but i wonder how a salary cap accounts for the team development cycle? i wonder how a salary cap deals with the primary cause of the ridiculous salary inflation the league has witnessed this past decade, namely the arbitration/qualifier system? i wonder how a salary cap helps canadian teams deal with onerous levels of taxation, regulation, and adverse exchange rate movements? i wonder how a salary cap allows big-market teams to moderately subsidize their smaller-market brothers?

Well the salary cap alone does not do most of those things. That is why there are also changes to the qualifying offers and arbitration systems. The salary cap does not have anything to do with things such as canadian taxation and exchange rates. That is dealt with seperately. In the past it was dealt with by paying players in US dollars but the actual Canadian teams only handing out the Canadian amount. It doesn't allow big-market teams to moderately subsidize smaller-markets either. That's for the NHL to decide in his revenue sharing program. The CBA needs to be broken down into its many pieces, don't expect just one (the cap) to be the entire cure for the NHL's ailment.