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Why I (and many fans) are not supportive of luxury taxes as a salary containment mech

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Old
10-29-2012, 11:39 AM
  #1
ottawah
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Why I (and many fans) are not supportive of luxury taxes as a salary containment mech

http://sports.nationalpost.com/2012/...gue-disparity/

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By any objective measure, the Thunder were not far from winning the championship last year. They could have reasonably expected to get closer as Kevin Durant, Russell Westbrook and Harden acclimated to the Finals stage. The Thunder had gone from doormat to playoff team to conference finalist to NBA finalist over the course of four years. They were improving each year.

On Saturday evening, the Thunder veered off that course, trading Harden to the Houston Rockets along with three spare-part teammates. The reason: The Thunder were looking to avoid paying the luxury tax for years to come. In making the deal, the Thunder have reminded everyone that the NBA is, economically speaking, a two-tiered league.

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10-29-2012, 12:34 PM
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txpd
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i think many of the fans of the top tier teams in all the pro sport leagues would encourage more of that. there are detroit and toronto and philly fans among others that have said that since they pay more they deserve a better chance to win.

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10-29-2012, 12:38 PM
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i think many of the fans of the top tier teams in all the pro sport leagues would encourage more of that. there are detroit and toronto and philly fans among others that have said that since they pay more they deserve a better chance to win.
Sports championships should be earned not bought. It helps keep fan interest high in most/all markets if every team has a more or less equal chance to build a championship team.

Especially in a league that doesn't have a TV huge contract and can't keep such teams afloat with TV revenues.

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10-29-2012, 12:38 PM
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No Fun Shogun
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The Yankees are the reason why I don't support a luxury tax system.

Only reason I really need, as far as I'm concerned. And I'm a fan of a team that'd probably benefit if the NHL had a luxury tax instead of a salary cap.

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10-29-2012, 12:40 PM
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Originally Posted by No Fun Shogun View Post
The Yankees are the reason why I don't support a luxury tax system.

Only reason I really need, as far as I'm concerned. And I'm a fan of a team that'd probably benefit if the NHL had a luxury tax instead of a salary cap.
LA Lakers are another example. Just look at their season by season record since the 70's. You'll get sick to your stomach.

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10-29-2012, 12:43 PM
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They chose not to pay the luxury tax, it doesn't mean they don't have the ability to.

2011 the team made 20-25Million (Forbes #), This past year they made between 30-35Million in operating profits (From ESPN's Bill Simmons).

The owner chose to profit instead of go for a championship, its his choice but with the tax/soft cap they had the ability to for it. In 2-3 years Edmonton will be against a hard cap and won't even have a choice to keep some of there best young players.

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10-29-2012, 12:56 PM
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Originally Posted by Swarez99 View Post
They chose not to pay the luxury tax, it doesn't mean they don't have the ability to.

2011 the team made 20-25Million (Forbes #), This past year they made between 30-35Million in operating profits (From ESPN's Bill Simmons).

The owner chose to profit instead of go for a championship, its his choice but with the tax/soft cap they had the ability to for it. In 2-3 years Edmonton will be against a hard cap and won't even have a choice to keep some of their best young players.
Why not?

A good GM can stay below the cap by making proper choices / contract offers. There's no need to blow your team apart every 3 - 5 years.

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10-29-2012, 01:00 PM
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And if it were a hard cap league, they would not have even had the opportunity to sign him.

It can work if it's not too easy to get around (like the Yankees).

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10-29-2012, 01:01 PM
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Yeah luxury taxes don't work. It creates fiscal imbalance in a league. Basically you get the haves and have nots. Hardly ideal.

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10-29-2012, 01:08 PM
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Originally Posted by Butch 19 View Post
Why not?

A good GM can stay below the cap by making proper choices / contract offers. There's no need to blow your team apart every 3 - 5 years.
Eberle/Hall are already making 6 a year, I assumed Yakapov and RNH will be at similar level or better and will get same or more money. Can't have that much money tied to 4 offensive players with cap that will be $60-$65 Million. They need a goalie and Dmen to contend, those aren't cheap.

Even Pittsburgh, Crosby has a cap hit of 8.7 Million with a salary of 12 Million. In 2 years what is Malkin going to ask for, actual salary something close to crosby will Pitt want a 10 Million cap hit? Another team will give him what ever the new max is. A smart GM would have to let him go to build a whole team, not something top heavy.

I like dynasties, hard cap almost guarantees you can't have one.

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10-29-2012, 01:33 PM
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But guess what, all 30 MLB woners make the money and profit necessary to keep them happy. The 30 shareholders are happy and thats all that matters, FIRST & FOREMOST.

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10-29-2012, 01:38 PM
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Originally Posted by cutchemist42 View Post
But guess what, all 30 MLB woners make the money and profit necessary to keep them happy. The 30 shareholders are happy and thats all that matters, FIRST & FOREMOST.

Not only do they have profit, but it would be interesting to see the franchise value trend. These franchises are money-making machines, returning annually at a handsome rate, and if the owner ever decides to cash out, he has a huge gain to boot.

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10-29-2012, 01:42 PM
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But guess what, all 30 MLB woners make the money and profit necessary to keep them happy. The 30 shareholders are happy and thats all that matters, FIRST & FOREMOST.
Not only that but the MLB is full of parity. Anyone who points to the Yankees as a sign for the luxury tax destroying parity [mod: should reconsider]. The Yankees have won one championship in the last decade+ which was won on the backs of core players that were internally developed. In the last 5 years something like 20 out of the 30 teams have made the playoffs(even more have made it if you a couple years further back) at least once in a sport where playoff spots are hard to come by.


Last edited by Fugu: 10-29-2012 at 01:54 PM. Reason: generalized flaming
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10-29-2012, 01:53 PM
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Not only that but the MLB is full of parity. Anyone who points to the Yankees as a sign for the luxury tax destroying parity is ignorant. The Yankees have won one championship in the last decade+ which was won on the backs of core players that were internally developed. In the last 5 years something like 20 out of the 30 teams have made the playoffs(even more have made it if you a couple years further back) at least once in a sport where playoff spots are hard to come by.
When I think of MLB I think of high paying teams consistently challenging for playoffs spots and the low salaried teams maybe having one, two good years then losing their players.

Just take the highest and lowest spending teams of the last decade. The Yanks have finished 3rd in their division once, 1st or 2nd every other year. The Royals have finished 3rd once, and 4th or 5th every other year.

Look at this year. By the time the Semis rolled around, You had to be inside the top 3rd of the payroll ladder to compete.

Its not all about championships, its about the ability to compete year in and out, and with a lower payroll team, it just does not happen.

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10-29-2012, 01:59 PM
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Originally Posted by ottawah View Post
When I think of MLB I think of high paying teams consistently challenging for playoffs spots and the low salaried teams maybe having one, two good years then losing their players.

Just take the highest and lowest spending teams of the last decade. The Yanks have finished 3rd in their division once, 1st or 2nd every other year. The Royals have finished 3rd once, and 4th or 5th every other year.

Look at this year. By the time the Semis rolled around, You had to be inside the top 3rd of the payroll ladder to compete.

Its not all about championships, its about the ability to compete year in and out, and with a lower payroll team, it just does not happen.

Los Angeles (NJD)
Boston (Vancouver)
Chicago (Philadelphia)
Pittsburgh (Detroit)
Detroit (Pittsburgh)
Anaheim (Ottawa)
Carolina (Edmonton)

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10-29-2012, 02:14 PM
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Originally Posted by WinterEmpire View Post
Not only that but the MLB is full of parity. Anyone who points to the Yankees as a sign for the luxury tax destroying parity [mod: should reconsider]. The Yankees have won one championship in the last decade+ which was won on the backs of core players that were internally developed. In the last 5 years something like 20 out of the 30 teams have made the playoffs(even more have made it if you a couple years further back) at least once in a sport where playoff spots are hard to come by.
The 2009 title was probably the least internally developed title any team has won. It was on the backs of Sabathia, A-Rod, Teixera, Matsui, Burnett, etc. Most of those guys weren't even on the team in 2008. Its not just the world series though. The Yankees have won all but 5 division titles since 1995, and in years where they didn't win the division they won the wild card 4 times. Also, how the hell did the seeding work in the playoffs in 95-97? I can't figure out why Cleveland was seeded ahead of Seattle in 1997.

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10-29-2012, 02:23 PM
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Originally Posted by ottawah View Post
When I think of MLB I think of high paying teams consistently challenging for playoffs spots and the low salaried teams maybe having one, two good years then losing their players.

Just take the highest and lowest spending teams of the last decade. The Yanks have finished 3rd in their division once, 1st or 2nd every other year. The Royals have finished 3rd once, and 4th or 5th every other year.

Look at this year. By the time the Semis rolled around, You had to be inside the top 3rd of the payroll ladder to compete.

Its not all about championships, its about the ability to compete year in and out, and with a lower payroll team, it just does not happen.
But guess what, the Yankees are baseball's biggest draw and biggest franchise. They make the most money, and dole out the most money for people to play them. That system makes all 30 MLB shareholders happy. The point of those sport corporations is to make money.

All the power to them that they found it.

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10-29-2012, 02:43 PM
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Originally Posted by cutchemist42 View Post
But guess what, the Yankees are baseball's biggest draw and biggest franchise. They make the most money, and dole out the most money for people to play them. That system makes all 30 MLB shareholders happy. The point of those sport corporations is to make money.

All the power to them that they found it.
That is the thing I don't quite understand with ownership. Baseball, A league with huge revenue disparity (like the NHL) teams make money at all levels. The three lowest teams in terms of value/revenue all are profitable (Oakland, Pittsburgh, Tampa).

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10-29-2012, 02:55 PM
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I like dynasties, hard cap almost guarantees you can't have one.
Look when dynasties happened. There were fewer teams, and free agency wasn't a thing. Players had nowhere to go, and no way to get there.

Even in the free spending days between 1995 and 2005, there wasn't anything that really constitutes a traditional definition of a dynasty.

I'd say dynasties are more difficult to put together because of increased player freedom, not because of a cap, or a lack of one.

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10-29-2012, 02:55 PM
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That is the thing I don't quite understand with ownership. Baseball, A league with huge revenue disparity (like the NHL) teams make money at all levels. The three lowest teams in terms of value/revenue all are profitable (Oakland, Pittsburgh, Tampa).
Because they pay 1/4 of the salaries of the Yankees, yet rake in the same percentage of the massive national TV deal.

In the NHL they have to pay something close in salaries (something like 75%, not 25%) and collect far less from the national TV deal (which pays some teams entire payrolls in MLB).

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10-29-2012, 03:14 PM
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Yeah luxury taxes don't work. It creates fiscal imbalance in a league. Basically you get the haves and have nots. Hardly ideal.
"not ideal" is kind of subjective. It would create an imbalance compared to the baseline of parody but the league might be just as strong overall if you have the big markets (which bring in the €ŁĄ) such as Toronto, NYR ect performing very well each year.

It's harder to grow new markets, but I'd argue it strengthens your existing and most important markets. Completely aligns with the 20/80 principle.

I'm not for free market/lux tax systems but I'm also not against them

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10-29-2012, 03:21 PM
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Look when dynasties happened. There were fewer teams, and free agency wasn't a thing. Players had nowhere to go, and no way to get there.

Even in the free spending days between 1995 and 2005, there wasn't anything that really constitutes a traditional definition of a dynasty.

I'd say dynasties are more difficult to put together because of increased player freedom, not because of a cap, or a lack of one.
True, however you cannot overlook the Devils, Red wings, Stars, Avalance teams between 95-04

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10-29-2012, 03:24 PM
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lack of salary cap gets top end players more money.

The large market teams would run up players salaries so much that smaller teams will never afford such players and they'll almost never retain their best RFAs as their asking price can only be met by the big markets.

So not much point in being a fan of a smaller market team. Your favorite players will be gone when they hit UFA status.

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10-29-2012, 03:26 PM
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I am for a luxury tax system. Why should I have to pay $50 for the worst seat at MSG when we have to spend the same amount of money as a team who practically gives tickets away for free?

And the teams who will receive the luxury taxes, maybe they can put that money back into the team?

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10-29-2012, 03:34 PM
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Originally Posted by ottawah View Post
Because they pay 1/4 of the salaries of the Yankees, yet rake in the same percentage of the massive national TV deal.

In the NHL they have to pay something close in salaries (something like 75%, not 25%) and collect far less from the national TV deal (which pays some teams entire payrolls in MLB).
That's the point though, they all have an opportunity to make money, something owners are saying they can't do with this system. Even with a 50-50 split Phx, FLA, Columbus still will lose money. This lockout isn't solving any problems, its just lowering the loses or increasing the gains depending on who you are.

Let the leafs/rangers/habs spend- tax them, that money goes to lower teams. have it tiered so tax goes up depending on how much over the cap you spend. Let teams retain all talent drafted, let there be a chance of a dynasty which will actually create sustained interest.

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