The cap floor

Discussion in 'Fugu's Business of Hockey Forum' started by Roomtemperature, Jun 29, 2011.

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  1. Roomtemperature

    Roomtemperature Registered User

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    This is the next big CBA fight. Its hurting teams that its gotten so high at this point. Maybe not the next one but the one after that I think the owners are going to be looking to get rid of it. The next CBA I predict the ceiling is a bit higher while the floor goes lower.
     
  2. sh724

    sh724 Registered User

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    The current cap floor is higher than the average teams salary before the lockout
     
  3. macavoy

    macavoy Registered User

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    They should have left the floor at the % value it was the first year instead of settling on the arbitrary $16m amount imo.
     
  4. cheswick

    cheswick Non-registered User

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    The formula to calculate hasn't deviated since the first year. The midpoint between the floor and the cap is based on a % of revenue. From there $8 million up is the cap and $8 million down is the floor.

    I agree that something is going to be done. They may increase the amount they go above and below the average, try sharing less % or a hybrid of the two but too many teams are strugglign to make money while having to spend at the floor for nothing to be done.
     
  5. Tekneek

    Tekneek Registered User

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    Yep, it is this cap floor, that is now HIGHER than the cap maximum in the first year of this CBA, that is breaking a lot of the smaller market US-based teams.
     
  6. Confucius

    Confucius Registered User

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    If you don't spend to the floor, what's the penalty? No rev sharing? So nI'm guessing a team doesn't have to spend to the floor if they are better off fielding a team with a 20 million dollar payroll.
     
  7. kdb209

    kdb209 Registered User

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    AAAAARRRRGGGGHHHHH!!!!!!!!!!

     
  8. IU Hawks fan

    IU Hawks fan They call me IU

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    People amaze me.

    Being above the cap floor is equally as important as being under the cap ceiling. Why would losing revenue sharing be such a punishment? How is that fair to the players?
     
  9. Tinalera

    Tinalera Registered User

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    You gonna be alright kdb?? ;)


    And yea, I would say possible fines, forfeiture of draft picks is certainly something serious.

    It is certainly an issue I think that should be looked at in the next CBA, I think it's getting too high-I mean the ceiling, if teams can spend to it go to it, but if the floor is artifically too high for teams to reach, then something needs to be done- but what NEEDS to be done, and what WILL be done are probably two different things.
     
  10. barneyg

    barneyg Registered User

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    So is a potential answer simply to change these $8M numbers into percentages?

    2005-06 cap midpoint = 31M
    2005-06 upper limit = 39M (31 + 25.8%), lower limit = 23M (31-25.8%)

    Then 2011-12 midpoint = 56.3M
    2011-12 hypothetical upper limit = 70.8M (56.3 + 25.8%)
    2011-12 hypothetical lower limit = 41.8M (56.3 - 25.8%)
    Basically floor and ceiling 6.5M further away from the midpoint (compared to where they are now with a fixed $8M).

    Wouldn't the PA agree with it?
     
  11. Dado

    Dado Guest

    You're looking at some teams being twice as expensive as other teams. Personally, I have no problem with that, teams with vibrant, willing-to-spend fan bases *should* reap the benefits. But I don't think my feeling is universal.
     
  12. kdb209

    kdb209 Registered User

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    C & P from another thread.

     
  13. Dado

    Dado Guest

    Does the NHLPA have a policy on how such monies would be distributed - weighted by contract or evenly per-capita?
     
  14. Tekneek

    Tekneek Registered User

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    I thought the reason for the cap floor was an attempt to force "competitive" teams onto the ice, because of the belief that salary caps are anti-competitive. That they needed to force teams to at least spend a certain amount of money on payroll every year.
     
  15. Confucius

    Confucius Registered User

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    Thanks, for setting me straight.:cry:
     
  16. kdb209

    kdb209 Registered User

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    Actually, the teams make supplemental payments to the players. Payment amounts are made pro-rated on players actual Salary and Bonues and club contributions are pro-rated based on team payrolls (Actual Club Salary).

     
  17. r0bert8841

    r0bert8841 Registered User

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    I don't know very much about the CBA, but couldn't their be a way to implement something that limits that amount the floor could increase each year? I don't know if they ever anticipated the floor increasing so much in one year.
     
  18. Fourier

    Fourier Registered User

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    kdb,

    When you say this has never happened, are you including the possibility of teams dropping below the floor after bonuses could no longer be earned al la the 2008-2009 Kings?
     
  19. obsenssive*

    obsenssive* Guest

    cut the floor!
     
  20. kdb209

    kdb209 Registered User

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    I explicitly qualified it as being below the Lower Limit at the beginning of the season - to do so would be a willful prima facie example of circumvention and be subject to all the nasty Article 26 sanctions.

    The League has set the precedent that it accepts teams falling below the limit due to unearned bonuses - so it is not likely they would try to apply sanctions in the future.

    However, if a team tried to reach the Lower Limit through unrealistic bonuses, the League could reject the SPC and/or pursue Article 26 proceedings and sanctions - that SPC itself would likely fall under the permissible circumstantial evidence - "including without limitation, evidence that an SPC or any provision of an SPC cannot reasonably be explained in the absence of conduct prohibited by this Article 26".
     
  21. Pinkfloyd

    Pinkfloyd Registered User

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    Come up with a better revenue sharing program if you're going to keep going with a floor. And I'd prefer them to keep the floor but they got to make it so that their smaller market teams can spend that much w/o putting themselves at risk.
     
  22. Motown Beatdown

    Motown Beatdown Need a slump buster

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    there needs to be a salary floor or we'll end up with feeder teams just like MLB. Although i think the difference between the cap and floor could be tweaked.
     
  23. sh724

    sh724 Registered User

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    It would not be as bad as the MLB. The reason baseball is so lopsided is because there is not a salary limit times can spend as much as they want with the only punishment is having to give the league money if they go over an arbitrary number. There has only been a handful of teams that have gone over the number and over 1/2 of the money that has been paid to the league has come from NYY. Also the way MLB revenue sharing is set up teams like PIT will make more money having a bad team with an extremely low payroll than they would make if they sold out every game. This could not happen with the NHLs revenue sharing system.
     
  24. Hull Fan

    Hull Fan trou du cul rapide

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    The floor needs to be lower than 40 million. That's the high side and it needs to be a percentage of the lower half of the league's revenue rather than the entire league's revenue. The Islanders' revenue has nothing in common with Philadelphia. Same with Phoenix vs. Vancouver. Nashville vs. New York Rangers and the like. Tying all teams together to set up a lower limit bankrupts the minnows.
     
  25. iceless

    iceless Guest

    In theory, sure. The reality is that there are going to be a dozen or so teams that just won't be able to turn a profit by spending to the floor. Personally, I think they should get rid of a "team" cap and simply impose a "player" cap. This way, big market teams can still spend whatever they like without over-inflating individual player salaries, while small market teams don't have to worry about crippling their bank roll.
     

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