Who will propose a soft cap first?

Discussion in 'Fugu's Business of Hockey Forum' started by NomadManderson, Dec 11, 2004.

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  1. NomadManderson

    NomadManderson Registered User

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    First off, I’m no expert when it comes to the finer details of all the squabbling that has shut down the league. All I know is, I want the damn league to start again ASAP. I know the players are refusing to accept a salary cap, and the owners want a hard cap. Both are unreasonable positions. If the NFL and NBA can have a form of a cap, there’s no reason the NHL players shouldn’t have to accept it. On the other hand, neither league has a truly hard cap. It’s my understanding that in the NFL signing bonuses and contract restructuring can be used to dance around the cap, though again I’m no expert. The NBA has nothing resembling a hard cap.

    What I’m wondering is, are the owners really insisting on a hard cap, or would they accept a soft cap with exemptions similar to the NBA? A hard cap is unreasonable. First of all, it will penalize teams that build themselves the right way… drafting and developing players. Take the Tampa Bay Lightening for example. They drafted Brad Richards and Vincent Lecavalier and developed them into elite players, a Conn Smythe winner and World Cup MVP. They signed Martin St. Louis as a cast off from Calgary and developed him into a Hart Trophy winner. There’s no reason Tampa should be forced to break them up, which is clearly what a hard cap would do (unless they want to surround those three guys with scrubs).

    The other factor in a set cap is, no one should be approaching this assuming the financial situation in the NHL won’t change. If revenues increase, the ONLY benefactors would be the owners, and that isn’t right. If salaries were reduced and fixed, you can bet ticket prices would keep going up. There would HAVE to a way be the limit, whether it is a cap or luxury tax threshold, could revolve.

    Similarly, would the players accept a soft cap similar to the NBA? There may be problems with the NBA system, but the exemptions are pretty reasonable. There are basically three exemptions: the “Bird†exemption, which allows players to go over the cap to sign their own player if his previous contract was three years or longer; the “mid-level†exemption, which allows a team over the cap to sign one player a year at a mid level salary, usually a solid veteran role player; and the “veteran’s minimum†exception which allows teams over the cap to sign as many players as they need to at the minimum salary.

    The NHL could tweak these concepts to suit its needs. There could be a luxury tax penalty against teams that did use these exemptions to go over the cap.

    This would prevent big market teams from having a monopoly on signing big name free agents, because if they didn’t have cap space they couldn’t sign anyone but their own players and the players who qualify for the other exceptions, which would eliminate any chance to sign a big name from another team. A team over or at the cap couldn’t trade for a big name, high salary player without matching salaries. Teams under the cap would be the only ones who could offer more money to free agents, or absorb salary in a trade. It would place a big emphasis on drafting well and developing talent. Meanwhile it would still allow certain teams to bid for the services of a player, ensuring that a quality player who wants to be paid well can get it from somewhere.

    Forgive me if I’m being naïve here, but it seems to me the obvious compromise between a hard cap and no cap is a soft cap. So who is going to step to the table and be the first to propose it?
     
  2. Buffaloed

    Buffaloed webmaster

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    The luxury tax system proposed by the NHLPA IS a soft cap.
     
  3. xander

    xander Registered User

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    no it's not, it's mearly a system wich penalizes teams for going above a certain threshold. Teams are still free to exceed that threshold to sign both they're or other team's free agents. The definition of a soft cap is that it allows you to aceed it to sign your own players, but not sign anyone else's players. A luxery tax system would allow that, so it is not a soft cap.
     
  4. Buffaloed

    Buffaloed webmaster

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    That's what a hard cap does too. The penalties (heavy fines and loss of draft picks) are just a lot stiffer.
     
  5. NomadManderson

    NomadManderson Registered User

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    I thought a hard cap simply forbids teams from spending more than the limit. Which means the Tampa Bay Lightnening would have to let either Richards, Lecavalier or St. Louis go if they weren't able to convince one or all of them to play for less than market value. It's one thing when the Rangers or Red Wings simply sign three high value players... but when Tampa develops three of them and the system won't allow the team to keep as their foundation, there's something wrong with that system.
     
  6. xander

    xander Registered User

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    A hard cap prevents teams from going over the threshold no matter what. If the a team in the NFL wants to resign one of they're own players, and doesn't have enough cap room, they're only option is to cut other players to create cap space. They're are ways of subverting the cap (backloading, frontloading contracts) but you cannot under any curcumstance go over the cap number.
     
  7. A soft cap is not a luxury tax, a soft cap acts like a hard cap but has some circumstances where a team can go over.
     
  8. NomadManderson

    NomadManderson Registered User

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    One key difference between the NHL and NFL is the roster size. The NFL roster limit is 53 and the NHL limit is 23. That makes it much easier in the NFL to dance around the cap because there are so many second and third string players to move and cut. In the NHL there would be a much greater chance of a team getting handcuffed by simply drafting well.
     
  9. NomadManderson

    NomadManderson Registered User

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    One other idea in case the players can’t get over the “cap†issue even if it was a soft one: the luxury tax penalties for going over the cap with the exemptions could be put in a pool, which could be used by low revenue teams for one purpose: to pay player salaries. So the money is going back to the players while low revenue teams can attract talent to help increase revenue for the owners. Of course there would have to be open book auditing all over the place.
     
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