Sportsnet: NHL includes stiff luxury tax in latest proposal

[norrisnick]

What I want to know is what kind of rollback is associated with this? If $35M is the ultimate highend cap it could cripple a handful of teams (Philly, Detroit, Leafs, Colorado) and there is no way those owners would go for it.

I did the math in the trade forum and Detroit is sitting at $32M (post 24% rollback) committed to 15 players without their young core accounted for (Datsyuk, Zetterberg, Kronwall, Hudler, Grigorenko, a 2nd goalie, etc...). No way Ilitch agrees to this, loses his young core, and returns the Wings to the Dead Wings era of the 70's and 80's. No way.

 

[LordHelmet]

If I were you guys, I'd hold off on speculating about what this proposal contained. The article is too poorly written to determine what in the world the framework will look like..

The proposal is believed to include a stiff luxury tax system, with a tax structure adjustable to accommodate the rate and threshold on how the proposed CBA would be working.

That makes no sense whatsoever.

There is speculation among hockey circles of a dollar-for-dollar tax with revenue sharing among the NHL generated from this system.

Nice to know that they'll share the NHL that the new system generates..

Since the PA has pretty much accepted linkage, the sticking point right now is how big the range between the floor & ceiling are. From what I can make of this gibberish, the PA wants a wide range but the owners won't accept that unless there's a stiff lux tax inside of it.

 

[nyr7andcounting]

So the owners either proposed the trigger deal they proposed in February, except they lowered the linkage cap a little bit?

Or there is a linked payroll range of $25M-$35M (pretty much what the owners proposed in September...but now they proposed a 1-1 luxury tax below $35M lol)?

Or there is a linked cap from 25M-? with a luxury tax starting at $35M?

Or sportsnet has no clue what they are talking about?

 

[X0ssbar]

Or maybe its a a payroll range from 25mil to 35mil with a dollar for dollar tax kicking in at 35 - no maximum limit?

 

[Levitate]

What I want to know is what kind of rollback is associated with this? If $35M is the ultimate highend cap it could cripple a handful of teams (Philly, Detroit, Leafs, Colorado) and there is no way those owners would go for it.

as far as i know the rollback is off the table at the moment at least.

maybe not...but after everything fell apart back in, what, february or something was it? the NHLPA pulled it off the table

 

[norrisnick]

as far as i know the rollback is off the table at the moment at least.

maybe not...but after everything fell apart back in, what, february or something was it? the NHLPA pulled it off the table

Then there is really no way to do this. Teams would be crippled and the UFAs can't all be signed unless all these top 6 guys on the open market are willing to play for bottom 6 money. While the guys already signed for the big bucks continue to rake them in.

It would effectively screw the teams with contracts and screw the players without contracts.

 

[mooseOAK*]

A hard cap and a luxury tax are mutually exclusive, can't have both.

And, the $2.1 billion revenue number does not exist any more. It is lower and everyone was warned.

 

[Levitate]

Then there is really no way to do this. Teams would be crippled and the UFAs can't all be signed unless all these top 6 guys on the open market are willing to play for bottom 6 money. While the guys already signed for the big bucks continue to rake them in.

It would effectively screw the teams with contracts and screw the players without contracts.

there was some talk about how grandfathering in contracts could work instead but it was just speculation, not negotiation talk

And, the $2.1 billion revenue number does not exist any more. It is lower and everyone was warned.

but there are no other real numbers to work off of. while revenues likely will be lower, no one knows what that number will end up being and you can't base a CBA off of some imaginary number. so you make a CBA based off that number and then adjust it to the numbers that do come along (assuming linkage, etc). in theory anyways

 

[nyrmessier011]

What a horrible deal 25-35 would be and what a moron Goodenow would be to accept it after turning down 42.5 hard cap. Basically I'm saying that IMO there is definetly not a deal coming on a 25-35 range with a payroll tax. There's no chance that will get done. But there will be a deal because there's just numbers to crunch.

Also, I'd like to point out how happy I am the NHL decided to ignore the NHLPA's request prefering that Jeremy Jacobs be removed from the meetings.

 

[ti-vite]

What everyone is forgetting is if the NHL are talking total player cost (salary, benefits, bonuses...) and the NHLPA are only talking salaries, were in for a long summer, and I suspect this is the case unfortunately.

 

[WC Handy*]

What a horrible deal 25-35 would be and what a moron Goodenow would be to accept it after turning down 42.5 hard cap.

Bettman was very clear that the 42.5M offer ws off the table after the season was cancelled.

 

[LPHabsFan]

Has anyone thrown around the idea of keeping arbitration as is, meaning 1 way arbirtration, but limiting the teams you can use as examples. Maybe this can be one of the bones thrown at the PA. Allow the players to keep their one way arbitration, but allow say only +/- 3 million in terms of which teams they can use as example.

 

[Levitate]

What everyone is forgetting is if the NHL are talking total player cost (salary, benefits, bonuses...) and the NHLPA are only talking salaries, were in for a long summer, and I suspect this is the case unfortunately.

i'm pretty sure the numbers being bandied about now included stuff like bonuses...those are part of contracts.


anyways, the article on tsn is more clear but doesn't give any exact numbers and stuff.

 

[PecaFan]

Also, I'd like to point out how happy I am the NHL decided to ignore the NHLPA's request prefering that Jeremy Jacobs be removed from the meetings.

First of all, why should they honour any request? "Gee Gary, we'd prefer it if you'd stock the negotiating committee with softy marshmallow types, who will give us everything we want, ok?"

And where does it say that they even requested Jacobs not be there?

 

[Drury_Sakic]

I still think my idea about percentaging payrolls down under whatever the cap is should be a concept used by the PA

Take colorados 55 million from last season... % it down under the new(say 39.5 million cap)...that means all remaining contracts would only count 72% AGAINST the cap...

How?

39.5/55 is .72.. or 72%

So say after caculating up all of Colorado's signed players for next season, and only counting 72% against the cap... they have 32 million committed... that means they would have 5.5 million in cap space to fill out the roster... the players would still get their
40.96 that is contracted to them, but only 72%(32 million) would be counted against the cap..

You do the same for all teams(if they want, it would be a choice)

Toronot and their (just rough numbers) 60 million..... 39.5/60... whatever that is is the % that their remaining contracts will count against the cap...

(all future contracts and team options would count 100% against the cap, Player options that are currently available also count only the Cap Adjustment %)

I also had considered that the % system could be used to bring teams up to the floor too..

Why?

It balances the playing field on the cap issue. Big clubs would like it, and it would make the idea of revenue sharing something they would have to accept(kind of a trade off). Clubs in strong markets would not suffer the wrath as baddly.Its not totally fair, as it may give an advantage to clubs with players under long term contracts......but it is something that works and throws a major bone to the PA

Players pick up a huge point...Adjusting those big spenders payroll down will leave them at worst under the cap....Most will have money to spend under the cap, and they will spend it...So rather than have 10 teams that like to spend ABOVE a cap trying to sell off players, they might be able to add a few players or at worst keep their current roster.

It ends up being that adjustment into a cap world, without the players having to give up what they are already promised via contracts(namely a rollbakc)....

 

[AH]

I am confused !!!

 

[CGG]

Bettman was very clear that the 42.5M offer ws off the table after the season was cancelled.

Goodenow was equally clear that the 24% rollback was off the table as well.

A hard cap and a luxury tax are mutually exclusive, can't have both.

And, the $2.1 billion revenue number does not exist any more. It is lower and everyone was warned.

You can easily have both a hard cap and a luxury tax, i.e. hard cap at $43 million, luxury tax from $37 to $43 million. One does not proclude the other.

We don't know what revenues are. Nobody does. Not much chance they'll hit the $2.1 billion this year, that's why the current framework was basing a payroll range on $2.1 billion, adjusted up or down based on what revenues turn out to be. If they stop acting like idiots and get hockey back on the ice pronto they should be able to recover relatively quickly.

 

[nyr7andcounting]

A hard cap and a luxury tax are mutually exclusive, can't have both.

And, the $2.1 billion revenue number does not exist any more. It is lower and everyone was warned.

There is now linkage....what revenues might be doesn't matter because the system will be adjusted through the CBA year to year.

 

[CGG]

I still think my idea about percentaging payrolls down under whatever the cap is should be a concept used by the PA....

You might be on to something here. It might take a minimum percentage (i.e. all existing contracts have to be counted at least 80% towards a cap, for example). But it helps with the whole grandfathering-in mess. Teams like the Red Wings don't need to launch a firesale. No contracts signed before the new CBA can be used in arbitration. Once a player gets traded his contract counts 100%. Etc.

Everyone's always saying how the rollback was all smoke and mirrors anyway since it doesn't affect many players. Okay then, owners won't object to this too much since it doesn't affect many players. And the PA should like it too, sure beats an across-the-board rollback.

 

[PecaFan]

I still think my idea about percentaging payrolls down under whatever the cap is should be a concept used by the PA

Take colorados 55 million from last season... % it down under the new(say 39.5 million cap)...that means all remaining contracts would only count 72% AGAINST the cap...

The problem with that plan is that it rewards teams for going out and signing ridiculous contracts, and punishes the teams that actually tried to prepare for the dawn of a new age of CBA.

Big Spender not only gets to exceed the cap, he gets to add players. Fiscally Responsible actually lost players by letting them walk, and then has to re-stock their team at 100% cap rate.

 

[mooseOAK*]

You can easily have both a hard cap and a luxury tax, i.e. hard cap at $43 million, luxury tax from $37 to $43 million. One does not proclude the other.

I don't think that was how it was written but how about a cap with luxury tax on top and a maximum player salary per season?

 

[kdb209]

A hard cap and a luxury tax are mutually exclusive, can't have both.

And, the $2.1 billion revenue number does not exist any more. It is lower and everyone was warned.

Why are a hard cap and luxury tax mutually exclusive??? I don't see it that way. You can easily have some threshold where luxury taxes kick in and a higher absolute hard cap.

Why wouldn't this be a perfectly reasonable scenerio:

$25M +/- Floor
$35M +/- Threshold for first Lux tax bracket
$45M +/- Hard Cap

Any lux tax revenue on payrolls $35-$45 shared among teams below $35M.

 

[Weary]

Why are a hard cap and luxury tax mutually exclusive??? I don't see it that way. You can easily have some threshold where luxury taxes kick in and a higher absolute hard cap.

Why wouldn't this be a perfectly reasonable scenerio:

$25M +/- Floor
$35M +/- Threshold for first Lux tax bracket
$45M +/- Hard Cap

Any lux tax revenue on payrolls $35-$45 shared among teams below $35M.

It's probably not too far from doable. I'd prefer a lower floor and a higher cap. Rebuilding teams shouldn't be forced to spend $25M. Teams making a push should be able to stretch the budget a bit.

Instead of sharing the revenues with lower spending teams, I would either share it with:
a. Low revenue teams
b. A pool distributed to free agnets that re-sign with their previous teams.
c. Some combination of the above

 

[garry1221]

The problem with that plan is that it rewards teams for going out and signing ridiculous contracts, and punishes the teams that actually tried to prepare for the dawn of a new age of CBA.

Big Spender not only gets to exceed the cap, he gets to add players. Fiscally Responsible actually lost players by letting them walk, and then has to re-stock their team at 100% cap rate.

so take DS's idea, which only covers the existing contracts that were signed b efore the last cba expired, and use it to cover all preexisting contracts til they end. any other contract signed from here on out counts 100% toward the cap. and as was said by gc above, when a player is traded his contract counts 100%. If i have time a little later, i might try to figure out what it all breaks down to and i'll post it here.

 

[Wetcoaster]

What I want to know is what kind of rollback is associated with this? If $35M is the ultimate highend cap it could cripple a handful of teams (Philly, Detroit, Leafs, Colorado) and there is no way those owners would go for it.

I did the math in the trade forum and Detroit is sitting at $32M (post 24% rollback) committed to 15 players without their young core accounted for (Datsyuk, Zetterberg, Kronwall, Hudler, Grigorenko, a 2nd goalie, etc...). No way Ilitch agrees to this, loses his young core, and returns the Wings to the Dead Wings era of the 70's and 80's. No way.

If Bettman recommends the deal all he needs is 16 teams onside. The other 14 are SOL.