Creative CBA solutions? Do you have one? Have you seen any?
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11-09-2012, 02:52 AM
Join Date: May 2009
Location: New Orleans
Originally Posted by
I still ask the question, why do some teams pay 25% of their revenue to the players while other teams pay 75% of their revenue to players? That's the golden goose in my opinion. There is parity on the ice and now we need (more) parity in the finances of the teams off the ice.
I would compare it to taxes. Should every tax payer pay the same flat rate for their share whether they make $20,000 a year or $100,000 a year?
I wouldn't say that favors the poorer, but it surely doesn't favor the rich.
The NHL cap as it has been since the last lockout is basically a flat tax. It doesn't matter how much or how little revenue the individual team produces, they pay an equal share even though they do not get equal benefits.
Originally Posted by
By the way, the difference between the NHL Cap being a flat tax or a progressive tax is entirely the responsibility of the NHL and owners. The players are just asking for a cut of the pie, which has mostly been agreed upon by the two sides. The problem is the way the NHL is cutting up that pie among the owners.
The flat tax asks the players to fix the problem, the progressive tax asks the owners to fix the problem.
The problem here is that the NHLPA and NHL are negotiating on the percentage of TOTAL league revenues.
The players want assurances they'll GET that share (hence the floor. Without it, the players could get anywhere from 40-53% of HRR).
The percentage barely matters. The conundrum is "How do 30 different teams pay players an amount that equals __% of HRR every year?" The owners revenues are so diverse that the AVERAGE is slotted between teams #10 and #11 in revenue.
That's why there's infighting. The NHL owners aren't going to agree to 57% again, because 12 teams can't afford 57%. Those 12 owners are covering the difference with personal checks and operating at a loss.
That's why the players are saying "You need more revenue sharing." They think where the 57% comes from is the owner's problem.
The owners can't get the votes for the CBA unless it works for enough teams. More revenue sharing might make four owners at the bottom switch from NO to YES, but if it makes 3 owners at the top switch from YES to NO, that's not gonna pass.
To me, the solution is:
#1 - Base the midpoint off MEDIAN revenues, not Average.
-- That lowers the midpoint and helps a couple teams make the payroll range.
#2 - Adjust the difference between midpoint and cap/floor from $8 million above/below to about 18% of the midpoint.
-- That let's the rich spend about what they were spending before (maintains money to the players)
-- Lowers the floor a little bit more so even fewer teams are struggling.
#3 - Tweak the revenue sharing system to this:
-- Teams spending less than 57% of HRR on payroll pay into the system (what brings them to 57% of HRR with a max of 4.5% of local revenues)
-- Teams spending over 57% of HRR on payroll, do not pay into the system.
-- Teams that have to spend over 57% of HRR on payroll to hit the floor get the amount they are short. Any excess is divided 50-50 between players and the teams (evenly among the 30 teams).
Because you have to name a percentage for the players: 61% of ADJUSTED HRR (Median Revenue times 30 teams).
-- That's $19.9 million LESS than 57% of HRR (based on 2011 numbers).
However, all signed contracts paid in full. To account for the fact that just-signed contracts put teams over the cap, those players CAP HITS will be adjusted so teams appear to be in compliance (AKA, teams are spending over the cap via this amnesty, but only on THOSE GUYS signed under the pretense of the larger cap). When you factor in those players getting above what's counted, the players are probably getting over 57% of HRR.
Here's an example using 2011 Forbes Numbers:
What we had: $104 average, $59.2 midpoint, $67.2 cap, $51.2 floor.
By spending 57% of HRR: 7 teams comfy to the cap, 11 in the payroll range, 12 who couldn't hit the floor.
-- 12 teams a combined $63.7 mil from the floor, 20 teams a combined $188.7 from the midpoint (based on all teams spending 57% of HRR) -- after revenue sharing
What this proposal would do: $96 mil median, $54.7 midpoint, $64.6 cap, $44.9 floor
By spending 57% of HRR: 7 teams comfy to the cap, 20 teams in the payroll range, 3 who couldn't hit the floor.
-- 3 teams a combined $7.4 mil from the floor, 13 teams a combined $95 from the midpoint.
You'd have to redistribute revenue sharing (Forbes numbers include RS as "revenue" for teams getting it). But you get the idea.
Who is NOT better off in that CBA?
It APPEARS I'm adding more money to the system. But the actuality is, money is being added to the system by the poor owners out of pocket. The money in this case comes from owners spending out of pocket in the middle because they can't help themselves. Their team would be competitive for a play-off spot, or revitalized by not losing money every year and think they could spend more. We'd probably have the same number of teams LOSING MONEY, but because they CHOSE to, not because they HAD TO.
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