What Happens When A Team Can't Meet The Minimum?

[Crazy Lunatic]

The NHL states that teams are quailified for revenue sharing money if they meet some requirements (like 80% tickets sold). Well, what if a team sells 65% and can't meet the 32 million dollar minimum? Are they allowed to stay under the minimum? Does the league force the owner to move?

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[Bicycle Repairman]

I guess it would depend upon whatever language is in the League's constitution/by-laws.

Revoking a franchise for not meeting minimal requirements is common in the business world.

Would the league run it until a new owner could be found? Possibly.

 

[GKJ]

The NHL states that teams are quailified for revenue sharing money if they meet some requirements (like 80% tickets sold). Well, what if a team sells 65% and can't meet the 32 million dollar minimum? Are they allowed to stay under the minimum? Does the league force the owner to move?

either:

(a) You're Bill Wirtz

(b) You're an idiot owner

(c) You're in a bad market

 

[thinkwild]

throw them under the bus

 

[Crazy Lunatic]

either:

(a) You're Bill Wirtz

(b) You're an idiot owner

(c) You're in a bad market

But what does the league do if you are a, b and/or c? Does the league take control of 5 franchises?

 

[Bicycle Repairman]

But what does the league do if you are a, b and/or c? Does the league take control of 5 franchises?

Some may just pull the plug on their own. Dormancy is another option. Again, it's hard to say not knowing the terms of league membership.

 

[Flukeshot]

...[A team]can't meet the 32 million dollar minimum? Are they allowed to stay under the minimum? Does the league force the owner to move?

I'm not sure if that is a condition, as from what I understand that the franchise is responsible for that $32m to the players no matter what. E.g. If Minnesota has a player salaries of $25m they must pay $7m directly to the union. At least that's how I think it would (and should) work.

 

[Bicycle Repairman]

I'm not sure if that is a condition, as from what I understand that the franchise is responsible for that $32m to the players no matter what. E.g. If Minnesota has a player salaries of $25m they must pay $7m directly to the union. At least that's how I think it would (and should) work.

Are you sure?

If that's the case, why wouldn't the Wild just spend that $7 million on players? You'd think they'd rather have a few tangible assets over paying a fine.

 

[Epsilon]

The way I see it is if a team is X dollars under the cap after a certain date, then there should be a way that distributs that cap space among all teams at top of the cap, allowing them to spend more. The overall percentages don't change, and any of the "poor" teams who allow the "rich" ones to spend more will have only themselves to blame.

 

[Flukeshot]

Are you sure?

If that's the case, why wouldn't the Wild just spend that $7 million on players? You'd think they'd rather have a few tangible assets over paying a fine.

I'm not sure at all. There is no source or previous reference that I can remember to back this. It IMO is the only logical way to do things. The idea would be that yes the wild should spend that $7m to acquire more/better players and thus raise their level of competition.

The other options don't make sense to me. One would be that they simply overpay the players they have on their team. Some people have suggested this would happen though it is unreasonable. Why pay people more then they are worth and increase inflaition of salaries? Another is that they are penalized. However that does not help the franchise taking away draft picks or revenue sharing, etc.

What would make the most sense is that if they are under, that dollar amount would A) be given directly to the union, or B) be spread out evenly to the members of the team thought not directly as proportion of their regular salary.

A) Ensures that the union receives the guaranteed XX% of total league revenues
B) Does the same and also makes sure the players get a kick back for playing for a cheap team.
Also both would mean that if another player is added to the payroll/roster that the money would be there for them from that previously unused $7m.

If this is not what or similar to what the NHL was thinking then I believe they are being unreasonable with their "Salary Floor" structure.

 

[Brent Burns Beard]

The way I see it is if a team is X dollars under the cap after a certain date, then there should be a way that distributs that cap space among all teams at top of the cap, allowing them to spend more. The overall percentages don't change, and any of the "poor" teams who allow the "rich" ones to spend more will have only themselves to blame.

i like that idea..... would the team lose it for the next season too or would it reset each season ?

dr

 

[McDonald19]

Can someone please post which teams had payrolls of under 32 million in 03/04.

thanks.

 

[Charge_Seven]

The way I see it is if a team is X dollars under the cap after a certain date, then there should be a way that distributs that cap space among all teams at top of the cap, allowing them to spend more. The overall percentages don't change, and any of the "poor" teams who allow the "rich" ones to spend more will have only themselves to blame.

Interesting thought...what about trade cap room? Sell it maybe...something like that

I hear the Leafs are in the market for $20,000,000 worth...

 

[Bicycle Repairman]

If this is not what or similar to what the NHL was thinking then I believe they are being unreasonable with their "Salary Floor" structure.

Unless I'm missing something, isn't a Salary Floor the ante just to get into the game? If a team is significantly under dollar-wise, it means they can't afford to pay the floor. What good is a fine at that point?

 

[Crazy Lunatic]

i like that idea..... would the team lose it for the next season too or would it reset each season ?

dr

Aren't we right back to where we started if that idea was put in place? Whats the point of a minimum if teams dont have to meet it and how does this all help the small market teams when salaries get inflated by all this additional cap room big markets are given? It becomes a two tiered league. I guess you could say the deal helps the big markets, but if the NHL wanted a deal that helps big markets only, they could have offered a 70 million cap and the NHLPA would have accepted months ago.

 

[Flukeshot]

Unless I'm missing something, isn't a Salary Floor the ante just to get into the game? If a team is significantly under dollar-wise, it means they can't afford to pay the floor. What good is a fine at that point?

Yes, I would hope you are correct. That a team could not enter a game without $32m worth of players on the books. However could it be financially more logical to allow teams under? It is a given fact that some teams would struggle to pay even that $32m mark. So if they wished to add another player later in the season they would go above it, perhaps by a few million even.

It would be in both parties best interest if the team was allowed to have say $29m worth of players paying a $3m fee to stay at $32m and then when that new player (for arg. $3m contract) is acquired they move up to $32m instead of $35m. As at $35m they would be under a greater financial strain. In this circumstance the players/PA do not lose money.

 

[Brent Burns Beard]

Aren't we right back to where we started if that idea was put in place? Whats the point of a minimum if teams dont have to meet it and how does this all help the small market teams when salaries get inflated by all this additional cap room big markets are given? It becomes a two tiered league. I guess you could say the deal helps the big markets, but if the NHL wanted a deal that helps big markets only, they could have offered a 70 million cap and the NHLPA would have accepted months ago.

possibly .... just thinking outloud.

i happen to think the owners offers all benefit teams like TOR, NYR and DET more than any small market team.

dr

 

[Charge_Seven]

possibly .... just thinking outloud.

i happen to think the owners offers all benefit teams like TOR, NYR and DET more than any small market team.

dr

Financially they benefit the Leafs and the others, however I'm not so sure about competitiveness.

 

[Brent Burns Beard]

Financially they benefit the Leafs and the others, however I'm not so sure about competitiveness.

isnt this about finances ? i dont feel under privaledged because my team cant spend like TOR. thats so cliche.

dr

 

[Epsilon]

Aren't we right back to where we started if that idea was put in place? Whats the point of a minimum if teams dont have to meet it and how does this all help the small market teams when salaries get inflated by all this additional cap room big markets are given? It becomes a two tiered league. I guess you could say the deal helps the big markets, but if the NHL wanted a deal that helps big markets only, they could have offered a 70 million cap and the NHLPA would have accepted months ago.

Except if the small market teams spend their allotted share then they have nothing to worry about. Think about it this way: it lets the small market owners decide if they want a two-tiered league or not. If they do, then why complain about it afterwards?

 

[likea]

if you don't meet the min....you don't get any revenue sharing

trust me, everyone will meet the min.

 

[Charge_Seven]

isnt this about finances ? i dont feel under privaledged because my team cant spend like TOR. thats so cliche.

dr

This is about finances, yes, however some posters have gotten this idea of "fairness" and "equal opportunity" mixed in.

The Leafs already pulled in $20,000,000 last season (rounded...I don't know the actual figure...anybody have it?), I'm not so sure I want to see the owners rake in $40,000,000 this season.

 

[Brent Burns Beard]

This is about finances, yes, however some posters have gotten this idea of "fairness" and "equal opportunity" mixed in.

The Leafs already pulled in $20,000,000 last season (rounded...I don't know the actual figure...anybody have it?), I'm not so sure I want to see the owners rake in $40,000,000 this season.

im with you on that ... and i heard TOR made upwards of 75m.

dr

 

[PecaFan]

The NHL states that teams are quailified for revenue sharing money if they meet some requirements (like 80% tickets sold). Well, what if a team sells 65% and can't meet the 32 million dollar minimum? Are they allowed to stay under the minimum? Does the league force the owner to move?

A certain portion of money is put aside in escrow during the season. After the season, the auditors determine who was short or over, etc, and then the money is dealt out to the players if they were underpaid on the season, or the owners if they were overpaid.

 

[CoolburnIsGone]

A certain portion of money is put aside in escrow during the season. After the season, the auditors determine who was short or over, etc, and then the money is dealt out to the players if they were underpaid on the season, or the owners if they were overpaid.

Good quick recap of the plan that the NHL proposed in December. Here's the wordy version straight from the league:

* An agreed upon appropriate percentage of each Club's Player payroll will automatically be escrowed to ensure compliance with the 54% allocation.

* Following the end of each League Year, the League's Hockey-Related Revenues will be audited by an independent auditor jointly selected by the NHL and NHLPA, and the escrowed funds will be distributed either to the Players; or to the Clubs; or to both Players and Clubs in order to ensure that the Players receive 54% of the League's Hockey-Related Revenues.

* If, for whatever reason, NHL Clubs contract to spend less than 54 percent of the League's Hockey-Related Revenues, the Clubs would be required to contribute additional dollars to a pool to be distributed to the Players to ensure that they receive their full 54% Share.

I still gotta wonder about teams like Florida and Nashville that were under the salary floor, couldn't achieve the attendance numbers described and were among the teams losing the most money the last few seasons. It just defies common sense that these teams will basically end up losing more money under the NHL's previous proposal. Hopefully the revenue sharing that the league is proposing won't have very strict guidelines initially for the smaller market teams or the league should just be flushed down the toilet now.