Thread: Salary Cap: 2012-13 Salary Cap
View Single Post
Old
04-04-2012, 10:59 AM
  #9
squidz*
dun worry he's cool
 
Join Date: Jun 2011
Location: South of the Border
Country: United States
Posts: 11,897
vCash: 500
Good call on the thread split.

As for the "big teams paying millions to the little ones" it depends on their perceived risk and risk aversion. In a BoH thread on the topic, I compared it to an HOA. Sure, it costs the members quite a bit, and can be extremely obnoxious and painful, but people keep choosing to enter into them all the time. Maybe it costs the Leafs an extra $4MM/yr to adjust to a different model, but that ends up being an investment for the league as a whole because it keeps the league healthy and increases the value of their US TV deal, making all members richer. At the same time, it reduces the negative impact of lost franchises. Toronto or NYR stand to lose a lot if the league contracts.

The argument ad absurdum in this case is "how profitable would a league of just the top 8 revenue teams be?" The answer is a lot worse off than those 8 teams would be in the current league with additional revenue sharing. Put simply, Toronto needs Dallas. The Rangers need the Devils. Vancouver needs Anaheim. Montreal needs Tampa Bay. The only question is where they draw the line for putting their money out there to secure against that.

Maybe the league needs a "luxury tax" system (which I think NBA might have?) to fund revenue sharing, but the problem isn't the cap floor.

squidz* is offline   Reply With Quote