It says here Players talking of $60 million luxury tax threshold
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09-07-2004, 03:46 AM
Join Date: Feb 2003
Originally Posted by
HYPOTHETICALLY: Under a $30 million cap, lets say the average salary for a superstar is $4 million. Calgary has two superstars on their team, both of whom they drafted and developed. They both become free agents the same year. Because Calgary has been well run, they also have lots of other good players signed. But because they have alot of good players, they only have $5 million in cap room, even though they have the revenue to sign both. They only have enough room to sign one of the superstars, unless they both agree to take alot less than the league average. So they sign superstar "A" for $3 million, who takes less becuase he wants to stay. But, now they only have $2 million to sign supestar "B". At the same time, Detroit has been terribly run for some time, is devoid of superstars and only has a few marginally good players. They've drafted terribly, but they have $4 million in cap room, and offer Calgary's superstar "B" the $4 million he deserves, based on league average. Superstar "B" now has to decide between loyalty and a $2 million difference. I think its safe to assume most professional atheletes would take the extra $2 million, so lets assume superstar "B" does in this case. Now I ask you, if you were a Calgary fan would you be upset over this? Would you feel this is fair? Your team did the drafting and developing, had the revenue to sign both, but were unable to while, a poorly run team his been rewarded.
Now lets say there's a luxury tax at around $40 million. Salaries will come down under this system as well. Lets take the two superstars from my example above, and say a luxury tax has lowered the average superstar salary to $5 million. Calgary has the revenue to pay each $4 million, but they both want $5. Calgary then takes the extra money they received from the teams paying a luxury tax and is able to give both what they want. Calgary has not been punished for drafing well, and they're not paying any more of their money for those players than they would have under a cap.
So, if you were a Calgary fan, which situation would you prefer? The cap, which took one of your superstars away? Or the luxury tax which allowed you to keep both without spending anything more than you would have under a cap?
Again, this analogy doesn't work because you're assuming a terribly run team will have a lot of cap space. Badly run teams are more likely to have less cap space because they're likely to overpay players who aren't worth it.
This is essentially a strawman argument, because you're saying a cap would prevent Calgary from keeping both superstars. But in today's system, those two superstars would be worth $8-10 mil each in the current system with
! Calgary couldn't afford to keep both because they are a
small market team
! I think this is really what the whole discussion boils down to. With no cap, you have teams out there like Detroit, New York, etc. capable of throwing $8-10 mil for one of these superstars, and this prices them out of reach for the small market team.
Given the above example, it's certainly not as bad as the way things are now. I'm sure Calgary would prefer to find a way to get rid of a couple million dollars of salary to make room to keep both stars under the new system instead of trying to shed $16-20 mil of salary (impossible really) to keep both superstars under the current system.
I think the problem with the luxury tax is that the big market teams will still have an advantage. With a cap, there is no market advantage.
Last edited by Scheme: 09-07-2004 at
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