Why was the cap floor changed to being $16mil below instead of a percentage?

Discussion in 'Fugu's Business of Hockey Forum' started by CpatainCanuck, Jun 21, 2011.

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  1. CpatainCanuck

    CpatainCanuck Registered User

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    As it is, a decade of inflation and increased popularity of the nhl could hypothetically result in a cap of $100 million and a floor of $84 million, which would be a very negligible difference.

    Teams like Florida and the New York Islanders are already struggling to make the minimum as it is: further increases will just put more strains on the small markets.

    It seems obvious to me that the cap floor should be made a percentage of the cap. 60-70% sounds like a fair number to me at first glance.

    any thoughts?
     
  2. jessebelanger

    jessebelanger Registered User

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    it wasn't changed..the formula hasn't been changed since it was implemented.

    Most here would agree with you that it does need tweaking.
     
  3. cbcwpg

    cbcwpg Registered User

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    JMO, but I think having a cap is a good think in restricting the most a team can spend. That's what the game needs. But, to have a floor where teams must spend to a minimum, is a problem. I don't see why the NHL can't just say... "spend whatever you want, but up to this maximum $XXM."

    If I own a team and only want to spend $20M a year on salaries, that should be my choice, as long as I don't go over to top.
     
  4. Frank the Tank

    Frank the Tank Blue, you're my boy!

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    From what I remember the NHL has no problem with that strategy, it was the NHLPA that wanted a cap floor along with a cap ceiling. Now that I think of it more... was it the richer owners who wanted to ensure that they would not be the ones footing too large a portion of the 54-57% revenue that must be paid to the players?
     
  5. Shaka

    Shaka Registered User

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    As far as I know (and admittedly it is second hand from these forums) is that the cap floor is a minimum that teams must spend to qualify for revenue sharing. If teams want to spend less and forgoe revenue sharing $$, they are free to do so. The optics would be terrible from a fan point of view, however.
     
  6. X8oD

    X8oD Registered User

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    as stated, the cap floor is only a requirement to qualify for revenue sharing.

    But honestly, if you are an owner, and you hedging your bets on "Low Salary vs. getting Free Money" you probably shouldn't be an owner.
     
  7. mouser

    mouser Business of Hockey

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    Teams are required to spend to the cap floor per the CBA, there's no option not to. If a team did not spend to the cap floor for some reason the commissioner's office has a range of penalties available, including fines and forfeiture of games.
     
  8. Brent Burns Beard

    Brent Burns Beard DontTouchMyDonskoi!

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    i think the players were pretty much in agreement, if an owner wanted to spend 20m or 90m, it wasnt (the players) business.

    however, the owners decided they need a system to make sure that TOR, NYR and PHI could compete with teams like COL, NJD, TBY and ANA so they came up with this cap system.

    you see, before the cap system, teams like NYR and TOR would spend money on players that no one else wanted to pay and the teams were never good.

    now that they no longer are forced to pay Bobby Holik 9m, they can use that money and roster spots for younger players because as a result of the cap, teams like ANA and TBY lose their best players at 27 instead of when they were on the downhill at 31.

    of course, this was all presented as a means for the fans to afford the game and the evidence of all the lower ticket prices prove the cap and lock out were in fact for the fans! right?

    somehow the NHL convinced the fans that the cap and lockout were for them and their mid market teams when in fact the cap has most benefited the big market teams.

    TOR, NYR and PHI make more money then ever because their spending is limited so it all goes in their pocket.

    BOS and CHI also make more money then ever, but now can compete with well run organizations like ANA and TBY who also have cups.

    Meanwhile, fans in OTT lost their entire core because of the cap. Wasnt the cap supposed to save teams like OTT and EDM?
     
  9. cheswick

    cheswick Non-registered User

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    The floor isn't based on the cap. The cap and floor are both based on the mid point. The floor being $8 million below and the cap being $8 million above the mid point. So the percentage of revenues is used to calculate that midpoint value and the salary range goes from there.

    The current CBA is done after this season and i'm sure there will be tweaks regarding the total percentage of revenues and of the cap floor.

    Obviously a big issue is that the cap/floor is driven by overall league revenue and not on an individual team basis. Team A may have had flat revenue or a decrease in revenue whiel spending at the salary floor, but because on an aggregate basis league revenues increased they are now forced to increase their salary spending while there has been no corresponding increase in their revenue.
     
  10. Ishdul

    Ishdul Registered User

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    The Senators did not lose their entire core because of the cap, they lost Havlat and Chara, and if there were no cap then they wouldn't have been able to afford them anyways.

    The Senators (and Oilers) have just been poorly run for a while now, which is the reason they're in a bad position (along with more natural reasons like the decline of Ottawa's core).
     
  11. Brent Burns Beard

    Brent Burns Beard DontTouchMyDonskoi!

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    i guess their plan to have a cap backfired? they could have not insisted on a cap and this wouldnt be an issue.
     
  12. kdb209

    kdb209 Registered User

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    Sigh. As I have stated multiple times in multiple threads over the last several days - trying to stamp out this piece of misinformation:

    The Cap Floor Has Absolutely Nothing To Do With Revenue Sharing.

    All teams are required to be above the Lower Limit (except during the offseason) - it is a mandatory requirement of the CBA. A team which willfully falls below is subject to Article 26 sanctions for Cap Circumvention ($1M-5M fines, loss of draft picks, forfeiture of games, suspension of the GM, etc).

     
    Last edited: Jun 21, 2011

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