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2012-13 Salary Cap

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04-04-2012, 09:59 AM
  #1
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2012-13 Salary Cap

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Originally Posted by Jarick View Post
Assuming a VERY modest increase to $66m, the cap floor will be $50m.
Further on that point, assuming there's no change in revenue split (vis a vis a new CBA) or any changes to how HRR is calculated, the cap will increase to at least $69MM. Winnipeg's revenue increase over Atlanta alone would account for nearly that much difference. The cap floor would then be $53MM, which adds even more room to your estimate.


Last edited by Jarick: 04-04-2012 at 10:35 AM.
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04-04-2012, 10:01 AM
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Good call on Winnipeg. The CBA could really much things up. I do expect we could see a lower salary floor as it's going to be $10M higher than the ceiling was post-lockout. Perhaps 50-60% of cap ceiling (making it $32-40M).

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04-04-2012, 10:12 AM
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Quote:
Originally Posted by Jarick View Post
Good call on Winnipeg. The CBA could really much things up. I do expect we could see a lower salary floor as it's going to be $10M higher than the ceiling was post-lockout. Perhaps 50-60% of cap ceiling (making it $32-40M).
Changes in the floor would also increase the ceiling. Technically the "floor" and "ceiling" don't actually exist. The league calculates HRR and multiplies that by 57% (players' revenue split) to calculate the salary midpoint. The CBA decrees that no team may extend further than $8MM from the midpoint. The midpoint is likely to be $61MM. If they change the range to $15MM the floor would be $46MM and ceiling $76MM. They could go a different route and scale the midpoint (since through escrow, player salaries end up being different than their contracts state), but without knowing where exactly escrow adjustments end up hitting, I can't say whether the players would accept that or not.

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04-04-2012, 10:14 AM
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The reason I say that is the smaller market teams that were supposed to be helped by the cap ceiling are being hurt by the floor. You don't want teams spending $20M on the roster and getting all the benefits of the league and revenue sharing, but you also don't want teams that have to constantly lose money to compete.

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04-04-2012, 10:21 AM
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Not to change this into a discussion on the cap, but I don't buy the "small market teams" are being hurt by the floor. Each team gets a huge chunk of cash from the league every year. Yeah, this might not cover everything, but it probably ends up being around as much as they would have lost if there was no floor and no revenue sharing, and they still get the benefit of the cap.

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04-04-2012, 10:28 AM
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Quote:
Originally Posted by nickschultzfan View Post
Not to change this into a discussion on the cap, but I don't buy the "small market teams" are being hurt by the floor. Each team gets a huge chunk of cash from the league every year. Yeah, this might not cover everything, but it probably ends up being around as much as they would have lost if there was no floor and no revenue sharing, and they still get the benefit of the cap.
Revenue sharing in the NHL isn't anywhere near that kind of level. My argument has always been that there's nothing wrong with the floor, just the revenue sharing. If there were a strong enough system in place, then it wouldn't be an issue.

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04-04-2012, 10:32 AM
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At that point you're catering too much to the small markets though. Obviously the NHLPA would be on board, but the Board of Governors is pretty much run by the big teams, and you have to think the Rags/Flyers/Canadians will not be happy about having a salary cap AND having to shell out even more money to keep other teams competitive, which limits their potential success.

I mean, do you think Montreal and Toronto were thrilled about having to pay many millions of dollars to Florida so they could subsidize the team's shopping spree this summer and eliminate them from the playoffs?

I have to think they let that floor swing a little lower. If it's $8M from 57% of revenues, maybe it's $8M up and $12M down. Or 20% up and 30% down. Or floor is 45% and ceiling 70%. Etc

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04-04-2012, 10:35 AM
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This is an interesting enough topic on its own that I'm sure will come up.

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04-04-2012, 10:59 AM
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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.

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04-04-2012, 11:04 AM
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04-04-2012, 11:09 AM
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Money, so they say
Is the root of all evil today
But if you ask for a raise
It's no surprise that they're giving none away

Let's hope they raise the cap so I can get a new car, caviar, four star daydream.

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