The Lockout Thread Part I
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07-16-2012, 09:54 AM
Join Date: Jun 2007
Has anyone ever studied the cap in depth enough to know if it actually helps the small market teams as it was designed? My guess is it actually helps the big market teams make more money, because it forces them to spend wisely.
Seems to me it hurts (salary floor) as many small market teams as it helps. Take Columbus for example- if we believe the ownership (big if), they lose money every year because they have to spend at least X to get to the floor, let alone how much more they have to spend to be competitive. In addition, they can't get big name free agents to come here without spending more than other teams.
I'd like to see a study of what would happen if the salary cap were removed and they went to a pure luxury tax model. But, here's the catch, the luxury taxes paid would go directly to other teams payroll.
Here's an example of a possible luxury tax system.
There is no hard cap or floor, but every dollar a team spends over $50m is taxed at a rate of 3-1, i.e. if they spend $60m on salary they are $10m over the "threshold" and would pay a $30m fine. The $30m goes into a pool to be dispersed to teams which are under the "threshold". There would need to be some accounting system to disperse the money to teams which need it the most and are not gaming the system.
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