The salary cap is a meme issue compared to the cancerous concept of the entire franchise system

[VivaLasVegas]

IMHO, a problem is that owners go through all sorts of calculations regarding spending, including how their hockey toy fits onto their tax return in terms or needed gains or needed losses to offset gains somewhere else, and whether their other businesses are performing great or poorly so as to make additional investments easy or difficult. [Recalling that the Charleston Chiefs were liquidated only because the owner wanted to harvest her losses in the club.] If I was forced to offer one solution, it would be to require the stock in professional teams to be publicly traded, and prevent any single person or entity from owning more than 2% of the total shares. Who knows where that would end up, but it probably couldn't be worse than some of these idiot owners.

 

[Stephen]

Everybody complains about the salary cap, but the salary cap exists because of the franchise system itself.

In European leagues (especially soccer) each club is an independent organization that competes on a pyramid of leagues. There is promotion and relegation between leagues depending on poorly or well a team does. So if a major team is ran incompetently and fails, it can flop out of the highest tier of competition. Meanwhile, if a smaller team doesn't spend enough money, it will never rise to the level of highest level of competition. That creates a financial incentive for teams to spend as much as they can and to actually hold bumbling management accountable for their failures.

But in a franchise system, like the NHL, billionaire owners collude among themselves to create one cartel organization that is extremely exclusive in regards to which teams can enter the league. If a team wants to break into the highest level of competition in the franchise NHL, then somebody needs to front $500m and get the okay from all the other owners.

Since there's never any risk of a franchise falling out of the highly lucrative top flight division, small market owners are incentivized to just spend enough to ensure the long-term viability of the franchise and not upset revenue sharing. And since big market team owners have a monopoly on resources and don't have to compete for dollars from their own locality, they can spend into oblivion. Enter the need for a salary cap.

In a non-franchised, promotion/relegation system, you wouldn't need a salary cap because the Maple Leafs' management would a) be under threat that their poor money management could land them in relegation territory, b) competing for fans and money with other Ontario based clubs whose existence the Leafs and Sabres can't veto.
And teams like my own Florida Panthers would need to have a committed ownership group funded by a loyal, organic fanbase that can support a team without being able to fallback on revenue sharing and a high draft pick rewarding failure.

You're ignoring the part of European football where a small number of marquee teams dominate their domestic leagues every year, where Russian oligarchs and Emirati royalty pump billions into player acquisitions and the financial model is similarly skewed towards big tv contracts. There's no meritocracy.

In the hockey equivalent to this, a free spending Toronto Maple Leafs would not only have a monopoly but also dominate the talent pipeline coming out of youth leagues, so much for the fantasy of being relegated.

The other problematic concept here is soccer is a universally popular sport and you don't need to try to grow the game to markets unfamiliar with it. So a team with no money, no grassroots participation and amateur draft isn't likely to do anything even if it's well run. So without a franchise model, how do you get to Florida in the first place?

 

[txpd]

IMHO, a problem is that owners go through all sorts of calculations regarding spending, including how their hockey toy fits onto their tax return in terms or needed gains or needed losses to offset gains somewhere else, and whether their other businesses are performing great or poorly so as to make additional investments easy or difficult. [Recalling that the Charleston Chiefs were liquidated only because the owner wanted to harvest her losses in the club.] If I was forced to offer one solution, it would be to require the stock in professional teams to be publicly traded, and prevent any single person or entity from owning more than 2% of the total shares. Who knows where that would end up, but it probably couldn't be worse than some of these idiot owners.

Couldnt be worse than some of the idiot owners. Ok. There are some great owners in the league. You seem to be just dismissing that part of the equation. As a Caps fan, Ted Leonsis has been a great owner. Mistakes and all.

 

[txpd]

The European model is so screwed up. The big money clubs win everything and if a club goes into debt to try to compete they can completely destroy themselves. Imagine if a St. Louis or Pittsburgh or Minnesota tried to spend with Toronto and the Rangers and ended up going down to the third division. Is that really a positive? The reality is that you can’t suddenly switch to relegation/proportion or vice versa because it’s too ingrained. If anything European football leagues need to copy the NHL when it comes to a salary cap…if they want to see leagues be about more than 2-4 clubs.

My take is that those advocating ditching the salary cap would be just fine with Toronto, NYR, Detroit Red Wings and Chicago Blackhawks dominating the league.

 

[majormajor]

What exactly is the problem here again? I don't look at the way Euro soccer works and think that is the way the NHL should be run. A team has a couple bad years and then they lose their place in the league and can't get the financial support again to get back in. That's not better. NHL teams also spend a lot of money, there is a $60m salary floor and most clubs are around the $80m cap. That's what a healthy league looks like.

 

[Crease]

"What's my other option."
Exactly. The NHL is a monopoly/trust/cartel. You should be in favor of breaking the 32 owners' stranglehold on the product you pay for and enjoy.

The NHL doesn’t have a monopoly on hockey any more than McDonalds has a monopoly on hamburgers.

 

[Just Linda]

The NHL in a European style would be dead. Or at least be a tinier, more niche sport. Having one single league with teams in it has been good for the sport. The NHL pushed the California expansion and the growth in the us south. If it became a euro football style league, those teams would never have had incentive to join.

 

[aufheben]

Surprising amount of thought put in to this compared to all the other daily salary cap complaints.

 

[Rich Nixon]

didn't read that slab but this headline is some real 2021 shit huh

 

[VivaLasVegas]

The NHL doesn’t have a monopoly on hockey any more than McDonalds has a monopoly on hamburgers.

In antitrust terms, the hamburger market has a much lower barrier to entry, i.e., anybody with some spare bucks or good credit can open a hamburger joint at the strip mall. Putting together a whole new pro sports league requires billions. When was the last competitive pro sports league created? The AFL in the 60s comes to mind, but what else?

 

[Prairie Habs]

Where should European soccer grow? It's already everywhere. Esports are fringe, they have a lot of room to grow?

Oh, interesting. You think context matters? I wonder if that should be applied to the OP...

 

[Bondurant]

For all of it's faults I enjoy the parity of the franchise system. I love soccer. Many people in North America like to romanticize the pyramid system but a few wealthy clubs rule the roost. One of my favorite clubs has a 50% chance of being champions. My other favorite team in most years also has a 50% chance of winning.

Get some teams together, tier your divisions and have promotion/relegation. No one is stopping anyone from doing it but there is a reason no one does it.

 

[x Tame Impala]

If i'm a Dallas Stars fan hypothetically, why in the hell would i want to watch them get relgated to the AHL and then actually watch them play AHL teams with AHL-level players on it? I watch NHL games to watch the unequivocal best players in the world play against each other.

Why would an NHL player ever sign a long-term contract if there's a chance by year 4 of their deal they could be playing the Rockford Ice Hogs instead of the Chicago Blackhawks? There's no consistency or security there.

 

[glovesave_35]

But why would you, a fan, the person whose money is going into the pocket of the owners and players, be thinking from their perspective?

How do I think this would come about? Idk. I guess there'd have to be a court challenge ruling the NHL a monopoly or some legal maneuvering that classifies professional sports as a type of public utility where exorbitant entrance fees and veto powers over expansion aren't legal.

I like the system of European sports leagues. I think it is cool and works in a European context. What you are talking about though, is not an NHL thing. This is how North American pro sports are. And you can be sure it is not going away because mostly, everybody wins. Owners and players make their money, and the everyman gets to see the best players in the world no matter how bad their team is.

The only major team sport where the best teams and best athletes don't play in NA is soccer. This is the way things are here and it is very unlikely to change. Certainly, it won't be because of a legal challenge.

 

[DrMartinVanNostrand]

Only because of the size of European countries.
They remedy this through the Champions League, which run parallel to domestic league seasons and pits the top ~4 clubs from each country against one another.

While the Champions League is, in effect, the playoffs for European football, I would argue that even that is getting (gotten?) increasingly exclusive. In the last 15 years or so, how many times has a team from either outside the top-4 leagues (or PSG, who operate several levels above what any French team is capable of), or a less-heralded team from within those top-4 leagues qualified for the quarterfinal round? It can't be terribly often. Ajax made a run a couple years ago, Monaco a couple years before that, maybe you would class Napoli in the "less-heralded" department...however you spin it, it's almost always some combination primarily or entirely made up of Real Madrid/Barcelona/Man City/Chelsea/Bayern/PSG/Juventus and then take your pick of Man Utd/Liverpool/Dortmund/Atletico*. In any case, even that has become less-and-less of an open circuit over time, and if you're a fan of any team east of Munich, you can forget about ever seeing your team playing high-stakes Champions League knockout football, that's just a fact. Even the richest Russian teams can't get in there.

(*And thanks to this f*cking pandemic and the financial situation for Inter, their chances of breaking into that have taken a step back, too...)

 

[Bomber0104]

Everybody complains about the salary cap, but the salary cap exists because of the franchise system itself.

In European leagues (especially soccer) each club is an independent organization that competes on a pyramid of leagues. There is promotion and relegation between leagues depending on poorly or well a team does. So if a major team is ran incompetently and fails, it can flop out of the highest tier of competition. Meanwhile, if a smaller team doesn't spend enough money, it will never rise to the level of highest level of competition. That creates a financial incentive for teams to spend as much as they can and to actually hold bumbling management accountable for their failures.

But in a franchise system, like the NHL, billionaire owners collude among themselves to create one cartel organization that is extremely exclusive in regards to which teams can enter the league. If a team wants to break into the highest level of competition in the franchise NHL, then somebody needs to front $500m and get the okay from all the other owners.

Since there's never any risk of a franchise falling out of the highly lucrative top flight division, small market owners are incentivized to just spend enough to ensure the long-term viability of the franchise and not upset revenue sharing. And since big market team owners have a monopoly on resources and don't have to compete for dollars from their own locality, they can spend into oblivion. Enter the need for a salary cap.

In a non-franchised, promotion/relegation system, you wouldn't need a salary cap because the Maple Leafs' management would a) be under threat that their poor money management could land them in relegation territory, b) competing for fans and money with other Ontario based clubs whose existence the Leafs and Sabres can't veto.
And teams like my own Florida Panthers would need to have a committed ownership group funded by a loyal, organic fanbase that can support a team without being able to fallback on revenue sharing and a high draft pick rewarding failure.

The NHL's setup is co-operative / socialism in its finest form.

It's too bad it can't work like that in a societal way but it seems to work in at least one of the major professional sports.

 

[Freudian]

You're still thinking from the perspective of the NHL and business interests.
Individual sports teams aren't entitled to exist and make tons of guaranteed money.

They are entitled to choose whatever form of organization for their league they want as is any other sports league.

Considering teams are expected to pay a lot of money to be allowed to join the league ($650M for Seattle), offering the security of not risking being relegated to a lower league seems reasonable.

 

[Tripledeke333]

A solution searching for a problem.

There's no "cartel". The league's expansion team fee is no different than how every chain restaurant in existence charges a large franchise fee if you want to open one of their branded stores.

There is nothing stopping anyone from starting a competing league if they dont like the way the NHL does business. Free market means you are free to start any business you want, it does not automatically entitle you to success.

Euro soccer leagues/teams are better compared to college football teams here. In that (especially in the south) the local pride fans have in the team means they will fill the stands whether the team is undefeated or winless. At the pro level in America, people want to see the best of the best and that means top level leagues make the most money.

The NHL is like a cartel and is essentially a monopoly. Your comparison to restaurants is not accurate as the barriers to entry of creating a new restaurant are much much less than creating a new hockey league. Capitalism still requires monopolies to be regulated.

 

[Benedict Kovalchuk]

Completely agree with you OP, but the issue is the horse left the barn about a century or so ago. Too late to change the structure of the league at this point imo. Really odd to see so many push back against this in this thread, it would result in a MUCH better product than what we get. Edmonton is a great example, so much talent is wasted there because they have no incentive to get their shit together. McDavid is arguably the best player since Gretzky and Lemieux and his prime is being utterly wasted by that loser franchise. Six years into his career and they've done damn near nothing to improve the team. Now, if they had the threat of relegation? I guarantee that franchise would be much better run.

 

[bleedgreen]

didn't read that slab but this headline is some real 2021 shit huh

I was disappointed there were no meme’s.

 

[Zenos]

The European continent has 3x the population of the US+Canada.

three times? Really? I mean, even if we’re considering all of Russia and Turkey to be Europe... that’s still nowhere near 1 billion.

 

[Rabid Ranger]

Completely agree with you OP, but the issue is the horse left the barn about a century or so ago. Too late to change the structure of the league at this point imo. Really odd to see so many push back against this in this thread, it would result in a MUCH better product than what we get. Edmonton is a great example, so much talent is wasted there because they have no incentive to get their shit together. McDavid is arguably the best player since Gretzky and Lemieux and his prime is being utterly wasted by that loser franchise. Six years into his career and they've done damn near nothing to improve the team. Now, if they had the threat of relegation? I guarantee that franchise would be much better run.

This is what's called a swing and a miss.

 

[Eisen]

That would be pretty funny.

When teams get relegated into a lower league, usually the top talent goes away. You'll never see the equivalent of Draisaitl or McDavid in a second league.

 

[Eisen]

The European model is so screwed up. The big money clubs win everything and if a club goes into debt to try to compete they can completely destroy themselves. Imagine if a St. Louis or Pittsburgh or Minnesota tried to spend with Toronto and the Rangers and ended up going down to the third division. Is that really a positive? The reality is that you can’t suddenly switch to relegation/proportion or vice versa because it’s too ingrained. If anything European football leagues need to copy the NHL when it comes to a salary cap…if they want to see leagues be about more than 2-4 clubs.

Look no further than the damocles sword hanging over Schalke right now or Kaiserslautern in the past. I like the concept of relegation because it means the club is rooted to the city but it has it's own issues.

 

[WarriorofTime]

The European model is so screwed up. The big money clubs win everything and if a club goes into debt to try to compete they can completely destroy themselves. Imagine if a St. Louis or Pittsburgh or Minnesota tried to spend with Toronto and the Rangers and ended up going down to the third division. Is that really a positive? The reality is that you can’t suddenly switch to relegation/proportion or vice versa because it’s too ingrained. If anything European football leagues need to copy the NHL when it comes to a salary cap…if they want to see leagues be about more than 2-4 clubs.

They tried with the SuperLeague idea, but that spits in the face of hundreds of years of tradition and people reacted very negatively so it died.

Both systems will remain in place for now and they work for what they are, but I think Europe looking more like North American Leagues is more of a possibility some day in the future than the other way around. The whole "dream" of the European model where you and 50 local drunks in a bar starting a club that a decade later is the champion of Europe (and not in a super literal sense, but the whole rising through the ranks generally) is a practical impossibility in a day when teams are bidding massive amounts on transfers and there's all this oil money floating around.