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The Business of Hockey Discuss the financial and business aspects of the NHL. Topics may include the CBA, work stoppages, broadcast contracts, franchise sales, NHL revenues, relocation and expansion.

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Old
12-10-2004, 02:40 PM
  #1
Kid Canada
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Legal question

Just wondering here. Just throwing it out there.

What if the league was to accept a harder luxery tax at around 40 million, then one at 45 million which is eve harder. Wouldn't surprise me at all if the NHLPA does offer something like this sometime down the road.

All 30 owners then get together and sign a contract stating that they wont spend more than 45 million. If they do spend more, then they get the boot, just like that NFL owner who was forced to move the team because he wouldnt build a new stadium (believe it was LA). Any new owner that comes into the NHL, before buying a team, he must sign this contract stating he wont spend more than 45 million. Basically have an owners cap.

Now I'm assuming the NHLPA would throw 'conspiracy' all over them, if they were to find out.

Is this a far fetched scenario, is it even possible. Or is it illegal basically. Some lawyer, please help me out.

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Old
12-10-2004, 02:51 PM
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Lionel Hutz
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Quote:
Originally Posted by Kid Canada
Just wondering here. Just throwing it out there.

What if the league was to accept a harder luxery tax at around 40 million, then one at 45 million which is eve harder. Wouldn't surprise me at all if the NHLPA does offer something like this sometime down the road.

All 30 owners then get together and sign a contract stating that they wont spend more than 45 million. If they do spend more, then they get the boot, just like that NFL owner who was forced to move the team because he wouldnt build a new stadium (believe it was LA). Any new owner that comes into the NHL, before buying a team, he must sign this contract stating he wont spend more than 45 million. Basically have an owners cap.

Now I'm assuming the NHLPA would throw 'conspiracy' all over them, if they were to find out.

Is this a far fetched scenario, is it even possible. Or is it illegal basically. Some lawyer, please help me out.
The contract you are suggesting the owners sign is illegal.

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12-10-2004, 02:58 PM
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mudcrutch79
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Illegal contracts are unenforceable. It would be useless, and would open them up to massive damages in a collusion suit. Bad times.

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12-10-2004, 03:05 PM
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Kid Canada
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Quote:
Originally Posted by mudcrutch79
Illegal contracts are unenforceable. It would be useless, and would open them up to massive damages in a collusion suit. Bad times.
That's what I was thinking, but was un-sure if it was illegal or not. Thanks anyways.

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12-10-2004, 03:06 PM
  #5
Dr Love
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Quote:
Originally Posted by Kid Canada
If they do spend more, then they get the boot, just like that NFL owner who was forced to move the team because he wouldnt build a new stadium (believe it was LA).
Al Davis wasn't forced to move, and did want to build a new stadium. In fact Davis scheduled games in Oakland without league approval, and the Raiders claimed the league blocked them from moving to Oakland. Davis tried to get a new stadium in LA, claims the NFL interfered, and the deal fell through, so he packed up and moved to Oakland.

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12-10-2004, 03:10 PM
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Lionel Hutz
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Quote:
Originally Posted by mudcrutch79
Illegal contracts are unenforceable. It would be useless, and would open them up to massive damages in a collusion suit. Bad times.
yes, for example, if you sign a contractwith a prostitute, the courts will not say, well, prostitution is illegal, but they do have a contract....

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Old
12-10-2004, 03:24 PM
  #7
vanlady
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Almost all franchise organizations have something called a "fiscal responsibility" clause in there franchise agreements. These clauses allow the franchisor to monitor the fiscal health of all the franchisees and penalize them if they do not abide by the clause restricitions. Walmart, Canadian Tire and McDonalds are all examples of this, so are Major League Baseball and the NBA, this is one of the ways the Expos got moved to Washington. The NHL from my understanding has the same clause, this is NOT collusion. The league just needs to get the guts to use it.

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Old
12-10-2004, 03:32 PM
  #8
mudcrutch79
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Quote:
Originally Posted by vanlady
Almost all franchise organizations have something called a "fiscal responsibility" clause in there franchise agreements. These clauses allow the franchisor to monitor the fiscal health of all the franchisees and penalize them if they do not abide by the clause restricitions. Walmart, Canadian Tire and McDonalds are all examples of this, so are Major League Baseball and the NBA, this is one of the ways the Expos got moved to Washington. The NHL from my understanding has the same clause, this is NOT collusion. The league just needs to get the guts to use it.
Vanlady are you a lawyer? This place has been plagued lately by people without legal backgrounds making statements about legal issues with nothing to back it up. If you can back it up, back it up...if not, you're better off not tossing opinion into these things-it just makes it harder to discuss what's really going on.

I know for a FACT that you're wrong about some "clause" being why the Expos got moved to Washington. MLB has a clause requiring teams to maintain a certain debt/equity ratio, but the Expos situation had nothing to do with that clause.

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Old
12-10-2004, 03:46 PM
  #9
Lionel Hutz
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Quote:
Originally Posted by vanlady
Almost all franchise organizations have something called a "fiscal responsibility" clause in there franchise agreements. These clauses allow the franchisor to monitor the fiscal health of all the franchisees and penalize them if they do not abide by the clause restricitions. Walmart, Canadian Tire and McDonalds are all examples of this, so are Major League Baseball and the NBA, this is one of the ways the Expos got moved to Washington. The NHL from my understanding has the same clause, this is NOT collusion. The league just needs to get the guts to use it.
They (NHL teams) are seperate business entities, when they communicate for the purpose of regulating an industry, it is collusion.

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