Solution for Linking Revenues to Expenses

Discussion in 'Fugu's Business of Hockey Forum' started by not quite yoda, Dec 10, 2004.

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  1. not quite yoda

    not quite yoda Registered User

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    ok.

    So the NHL wants to absolutely link revenues to expenses. The NHLPA says "No salary cap".

    How about this:

    Instead of a Cap, have a luxury tax. But a very stiff luxury tax, much more potent than the one offered by the NHLPA. Let's say, for argument's sake, a 1$ tax for every dollar spent over a 40 million$ thresh hold.

    Now to link revenues to expenses:

    Let's say (for argument's sake) that today's league wide revenues are of 1 billion $. With 1 billion$ in revenues, each team can have a 40 million$ thresh hold in the Luxury tax. If the League's revenues drop to 0.8 billion$ (down 20%), then the Luxury tax thresh hold of 40 million$ is lowered by 20% to 32 million$. So for that year every dollar spent over 32 million$ would incur a 1$ tax.

    Naturally the Revenues, tax amount and thresh hold figures may need to be altered a little... but isn't this a way to LINK REVENUES TO EXPENSES WITHOUT HAVING A SALARY CAP? I just solved the lock-out didn't I? :handclap:

    or am I just an idiot? :dunno:
     
  2. Kid Canada

    Kid Canada Registered User

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    Would the players enjoy that? Most likely not. Good idea though.
     
  3. trentmccleary

    trentmccleary Registered User

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    - The players won't trust league revenue numbers.
    - They'll blame them for mismanaging and underpromoting the league.
    - $40M might not be low enough to help 70% of the teams in the league.
    - NHLPA has already declined a 100% luxury tax penalty haven't they?
    - If both sides agree on revenue numbers, the hard part may be agreeing on the players' share of those revenues.
     
  4. not quite yoda

    not quite yoda Registered User

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    Who gives a crap? it resolves the League's no1 problem and it does NOT involve a cap. Isn't this what the whole feud has been about? Teams will still be able to spend over the "new" 32 million$ thresh hold. So the players will still make their money. It's just that only the teams that can afford to continue to have such a payroll (the rich) despite the drop in League revenues will have to pay money (tax) to the poorer teams (that have caused league revenues to drop).

    NO CAP...
     
  5. trentmccleary

    trentmccleary Registered User

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    The NHL could also destroy the best hockey markets to keep salaries low.

    Rich owners + big fan bases = stupid contracts + salary arbitration wins for players on small market teams based on those stupid contracts

    Move the Penguins, Hurricanes and Panthers to Brooklyn, the Bronx and Harlem.
    Move the Ducks to Mississauga. Etc...

    30 small market teams under the same crummy CBA we've had for the past decade and salaries don't increase.
     
  6. not quite yoda

    not quite yoda Registered User

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    doesn't matter. It won't limit the players' salaries. It would only involve the teams self policing themselves according to their income level. It will only hurt the rich teams and help the poor teams. It's kind of close to revenue sharing.
    ??? NO.

    40M$ was just an example.
    When?
    There is no cap so no limit on what the players can make. It's up to the teams to individually set their own budget. The players want a tax anyways (they just offered one), so it's no harder than establishing the dollar amounts for the tax they just proposed. The two sides WILL HAVE TO agree on a luxury tax thresh hold or cap level whenever an agreement is reached anyways.
     
  7. Kid Canada

    Kid Canada Registered User

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    Unfortunately you need two sides to agree, to make a deal happen.
     
  8. not quite yoda

    not quite yoda Registered User

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    :shakehead
    Yes they could... BUT WILL NEVER IN A MILLION YEARS.

    The owners who have control of these elite teams have great buildings to play in and great fanbases to fill the buildings. Detroit, Toronto, NYR, Philadelphia. They are not moving. I will bet my life on it. Anaheim isn't moving to Mississauga either. Quebec moved to Colrrado remember, not the other way around.
     
  9. not quite yoda

    not quite yoda Registered User

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    But don't you see that the point of this thread is to please both sides.

    League wants revenues and expenses linked: this does that.

    NHLPA wants no CAP under any circumstance: this does that.

    that's the system right there. The rest can and will be bargained over time anyways.
     
  10. Kid Canada

    Kid Canada Registered User

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    I guess we'll agree to disagree. It'd work, but the players wouldn't ever accept it, which is too bad.
     
    Last edited: Dec 10, 2004
  11. MS

    MS 1%er

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    I suggested this exact thing in a proposal I made in September. :)

    http://www.hfboards.com/showthread.php?t=104294
     
  12. not quite yoda

    not quite yoda Registered User

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    Well I am glad we agree.

    By the way, I don't think this thing will get settled in time for a season. But if it does, it makes you wonder why Goodenow couldn't have come up with this new offer back in September. We could have had a god damn full season. Why waste half a season every time a CBA runs out?
     
  13. trentmccleary

    trentmccleary Registered User

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    - if the owners claim they make less money, they can reduce the luxury tax limit according to your proposal. The NHLPA will care about who decides how much revenue is earned.

    - They do that now. The players and NHLPA heads have tried to come up with every excuse under the sun to protect their salaries and this was one of them.


    - 100% is probably off. But I heard a story a while back about the NHLPA balking at a luxury tax so punitive that "it might as well be a hard cap".


    - Your whole proposal is about tying salaries and revenues together. You have a clause about declining revenue and a reduced LT threshold. You bet your @$$ they will be fighting over every half percent of revenue earned.
    For example, the owners have clearly stated that the current 75% is unacceptable.
     
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