jcpenny said:
I always hear that players won't accept a cap under any circumstances but i never heard why. Can someone tell me some of their main reasons or give me a link to an interview it could be great. I'm starting to question if players actually know why they dont want a cap.
I know why some posters here dont like a cap but they're aint players. I'd like to know why accepting a cap would be like getting AIDS cuz they make it sound like it.
A hard cap requires tying salaries to revenues and defining what those revenues are. In the NFL and NBA this was done after the owners completely opened the books. It is not just a number.
"We have consistently stated that one critical issue of disagreement between the NHLPA and the League on finances is how to define the complete business of owning an NHL franchise, and how to address the significant inconsistencies contained in the NHL's voluntary and unaudited URO reporting process," union chief Bob Goodenow said in his media release responding to the release of the Levitt Report.
The issue is how to determine how to divide up revenues for items such as licensing of suites and club seats, sponsorships, naming rights, fixed advertisements within the arena and distinguish what share goes to NHL related business and what goes elsewhere.
That doesn't apply just to arena revenues, but other facets of a team's business as well. In 1999 and 2000 the union gained access to four teams -- Buffalo, Montreal, Boston and Los Angeles -- and found $52 million in revenues not accounted for in the teams' UROs.
"We went and requested further information that spoke to a lot of the related entities and disclosed a lot of revenue sources that clearly were not being counted in the URO process," NHLPA senior director Ted Saskin told The Sporting News. "Just on those four teams alone, we saw a swing of $50 million toward profitability. That's only on four out of 30 teams.
"We've always said it's not an accounting issue of making sure the numbers add up," Saskin said, "but a much more complex task of how one defines the revenues in a business with many related parts and complicated corporate structures. There's no way to tell because they continue to refuse to give you individual team financial information."
Players have chimed on questionable URO entries as well.
''There are a lot of ways owners can move money around and hide it in certain situations,'' Philadelphia's Jeremy Roenick once said. ''I know in Chicago they claim no money on luxury boxes. They have 215 luxury boxes and they don't make a dime off that?''
That's why the union has little faith in the URO process. The NHLPA doesn't believe it accurately reflects the financial state of the teams.
"Absolutely not" said Saskin. "The financial reporting you get from the National Hockey League is only as good as the information they get from each team in what is an unaudited and voluntary submission. And the old adage 'Garbage in, garbage out' is unfortunately an apt description of the current system they have in place. We have numerous examples of teams simply putting down 'zero' for luxury suites, concessions and other items. You can't take that kind of reporting seriously."
After the Levitt Report came out, Philadelphia Flyers chairman Ed Snider revealed his team was one of the 19 NHL teams the report said lost money in 2002-03. Team president Ron Ryan said the Flyers weren't among the teams whose bottom line was colored in red ink, i.e lost money.
"Where it becomes confusing," Ryan told the Philadelphia Inquirer, "is that it sounds like there are two sets of books. The difference is that the report we make to the league, as directed by the players' association, is different from our own internal audited statement, which we view as the more accurate statement. So we were talking about two different reports."
So how can the players possibly trust what the owners are saying when every time they look closely the numbers change.
The other complementary part of a hard cap is revenue sharing and the NHL refuses to consider significant revenue sharing. The NHL shares at about 9% while the NFL shares at about 70%. With significant revenue sharing there is an incentive on low revenue teams to help monitor the reporting process. However that is why Bettman will not go there since it would require him to take on some of the most powerful owners.
A consultant who works for the NHL was blunt, telling the New York Post recently, "Hockey owners won't do this; they'll fight to the end not to share their revenues, since most of them get their revenue locally. The real trouble is that the conflict isn't going to just a labor issue of players versus owners — it's going to be owners against owners."
Former Ottawa Senators owner Rod Bryden gets the connection. "I am confident that any settlement that brings cost certainty to the NHL will also include a significant and different kind of revenue sharing among the teams. It is the only way that cost certainty can work," he told the Ottawa Citizen.
Gary Bettman and a number of the owners just do not get it. And until they do there is no way they have achance of bringing the NHLPA on-side.
There are also a number of studies and sports economists and labour law experts who are critical of the cap as proposed by the NHL. I am unaware of any independent study which supports the NHL's reasons.
"Things need to be done to permit well run teams to make money. The problem is the salary cap guarantees all teams, well run and poorly run . . . will make money," Stephen Ross, an Illinois University law professor told the Canadian Press. "Yes, it does protect owners in advance from making really stupid decisions.
"But what it also protects the owners against is an owner who could spend wisely on a new free agent who will put his team over the top. If a team has not been a contender recently, and they can spend more money to make more money, there should be no limit on their ability to do so."
In other words, you are placing limits on good business owners and propping up poor ones. Others say there is only one group that can be a possible winner in a cap system and that is a team owner.
"An effective salary cap is too Draconian and unreasonable. If you're going to use a cap to drive down player salaries, you're just padding owners' pockets," economist Andrew Zimbalist was quoted as saying by USA Today.
As Joe Sheehan of the Baseball Prospectus explained it, the goal of the salary cap, which he says should be actually called a payroll cap, is "to restrict the amount of money management can spend on labor. It's an agreement among competitors to inhibit the labor market, lowering salaries."
That would be an antitrust violation. The only way the league can avoid that issue is to get the union to agree to it in the collective bargaining process. That is why the NHLPA is so reluctant to agree to a cap.
Bettman's view is "We need an enforceable, definable relationship between revenues and expenses. We need a system that will eliminate the disparities in payrolls, so that a team's ability to compete depends on its team building skills, not on its ability to pay."
Critics say a cap would do anything but encourage team building. In the NFL teams are often forced to make decisions where staying under the cap takes priority over building or keeping together a competitive team. Teams that draft well could eventually have to part with their players if they could not fit them under the team's salary cap.
Also the hard cap works in the NFL because the contracts arer not guaranteed and the owners can simply cut players and disregrd the rest of the term of the contract.
"[A cap] punishes success, forcing well-built, winning teams to shed talent on a near-constant basis," according to Joe Sheehan.
The New York Post says a cap "would destroy team-building, would destroy the ability of a successful club to maintain its nucleus. It would base every personnel decision on an ability to pay while remaining under a prohibitive cap."
That, in a way, benefits teams who makes poor decisions. They'll have an excuse for not being able to put together a competitive team because their hands are tied by the cap.
"No matter what the level of the salary cap, there are going to be a lot of teams who have lousy teams because they have overpaid, underachieving players and now they are at the cap level," Ross, the law professor, told the Canadian Press. "If you are an owner, that's exactly what you want. You want to be able to tell your fans 'I'm sorry there is nothing I can do to improve the product because of the cap.' The fans are stuck with another year of a lousy team."
Here is an in-depth comparative study of salary caps by Matt Witting who concludes:
As this essay has shown, the measures currently in place in the NBA and NFL do not produce the desired results and have had significant negative consequences to boot. NHL Commissioner Gary Bettman was instrumental in designing the ineffective NBA cap and has indicated that any actions he endorses will resemble those he took in the NBA. The numbers show that, contrary to popular perception, the NHL is highly competitive and that big-market teams are not the only ones competing for the Stanley Cup. Based on historical performance, instituting an NBA style cap will not benefit the league and has the possibility to hurt competitiveness at the highest levels.
There is no quick fix for the NHL or for any of the major pro leagues. Complicating matters is the attitude that cities have a right to a pro franchise no matter what, and that franchises have a God-given right to make a profit, whether they earn it or not. As long as the leagues are professional they must abide by the realities of business. Some cities cannot (or will not) support a hockey team, some can support two or three, just like some cities can't (or won't) support an opera company, a Tiffany's, a 40-screen movie theatre or a military base. Amateur sports are not immune to the problems of the NHL, NFL, NBA and MLB. All Division I schools play by very strict rules governing scholarships and recruiting. Every year, though, Duke has a dominating basketball team while Penn State, a much larger school, does not. Every year Miami, Michigan, and Oklahoma have great football programs while other large state schools are almost always below average. No matter how hard we try to level the playing field it will still slant. Some programs/franchises are more attractive to players for whatever reason (financial, prestige, historical greatness). Some do a wonderful job of hiring their staff of coaches, scouts and administrators. Some have great fan bases, great buildings, or great weather. Some are just lucky. Eliminating the advantages that teams can generate over other teams results in a league of mediocrity. There are benefits to that strategy, as the NFL will tell you, but it is this writers position that the costs far outweigh the potential gains.
http://www.washingtonhockey.com/200203/features/sc1.htm
Hope that helps and provides an adequate answer to your question.
