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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, 04:04 PM
  #26
aqib
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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.
Thats the reason why so many of us have tuned out the sport. I used to go to 20 games every year, played fantasy etc. I am back in Toronto now and I figured I would be going to Jays games all the time. I can't get back into the sport when I know there is no way regardless of who we hire in the front office or dugout that we will ever be a contender again

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10-29-2012, 04:19 PM
  #27
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Originally Posted by Swarez99 View Post
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.
It won't work in the NHL though as they do not have that massive TV contract.

Its real simple, if the NHL had 2B a year in TV cash, they could split 50/50 with the players and then have 33M per team to hand out. Heck, even Phoenix is viable.

But the hard fact is they do, nor will they ever. Baseball wouldn't have that contract if they were not the only sport on TV (for the majors) for a good portion of the year.

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10-29-2012, 04:31 PM
  #28
cutchemist42
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Originally Posted by aqib View Post
Thats the reason why so many of us have tuned out the sport. I used to go to 20 games every year, played fantasy etc. I am back in Toronto now and I figured I would be going to Jays games all the time. I can't get back into the sport when I know there is no way regardless of who we hire in the front office or dugout that we will ever be a contender again
If Rogers makes money on the Blue Jays according to their desires, then MLB has done what they needed to do for that shareholder. As fans it sucks to hear but that's what a profit driven corporation cares about in the end.

Think of it though, the Blue Jays are the only team not making the playoffs in that division. Tampa and Baltimore have both made it work despite not having the tv rights to 30 million tvs.

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10-29-2012, 04:32 PM
  #29
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I would also say MLB is better at picking markets too.

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10-29-2012, 04:39 PM
  #30
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Originally Posted by cutchemist42 View Post
If Rogers makes money on the Blue Jays according to their desires, then MLB has done what they needed to do for that shareholder. As fans it sucks to hear but that's what a profit driven corporation cares about in the end.

Think of it though, the Blue Jays are the only team not making the playoffs in that division. Tampa and Baltimore have both made it work despite not having the tv rights to 30 million tvs.
But IMHO Tampa and Baltimore are example of franchises which are well enough run they can make a small leap for a year or two before falling back below mediocrity.

That was the first time Baltimore has been out of the basement in their division since 2007, which not surprisingly was the last year in which they were above the median in team salary.

TB mind you has been a model of what astute business and baseball minds can do. But those are few and far between.

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10-29-2012, 06:01 PM
  #31
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The luxury tax system is good for the players and fans of the Yankees.
It's terrible for everybody else.

I was a huge Jays fan for years and years.
Fehr single-handedly ruined the whole sport for me. I don't even know any players on the Jays anymore.

But as long as Yankee fans are happy...

It's for this precise reason that, even as a leaf fan, I still 100% support the owners and a strong cap.

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10-29-2012, 06:09 PM
  #32
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Forgive my ignorance, but the article doesn't seem to be saying the luxury tax is bad as much as the luxury tax isn't set at a high enough number to bridge the balance between the have and have-not teams.

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10-29-2012, 06:52 PM
  #33
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Originally Posted by sunnyvale420 View Post
True, however you cannot overlook the Devils, Red wings, Stars, Avalance teams between 95-04
Not overlooking, but none of those teams fit what people probably think of when they say dynasty.

I have no problem extending the definition of dynasty to fit the current reality though. That Colorado team, for example, only won 2 cups, with 4 years between championships. However, they went to at least the 3rd round in 6 of 7 years. That's a hell of a run.

Before the 90's, before free agency, when the traditional dynasty existed, that's one type. The free spending days, it didn't create the same type of dynasty teams, even in big markets, but there were a few exceptional teams.

In the cap era, now it's a combination of more teams, and free agency, and a limit to how much you have to spend, and a limit to how much you can spend. It's a more complex time to try and build a team. You can't just draft a guy and have him for his entire career without paying him. You can't just throw tons of money at anyone and everyone. It's more about managing an entire organization than ever.

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10-29-2012, 06:59 PM
  #34
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Originally Posted by Meteor View Post
Forgive my ignorance, but the article doesn't seem to be saying the luxury tax is bad as much as the luxury tax isn't set at a high enough number to bridge the balance between the have and have-not teams.
Exactly, which is why the NBA raised theirs so much.

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10-29-2012, 07:11 PM
  #35
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Originally Posted by Fugu View Post
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.
I have heard your arguments, but I do have food for thought. Is it possible that the lux tax system in baseball works in part because of the collective cost consciousness of owners? Fehr did catch them out on collusion which leads me to believe that they could possibly have the greatest homogeneity in consciousness to the point of violating their own agreement. I have had inklings that this collective consciousness is different between the big 4. It could be the difference between old school financial thought (slow, responsible growth) and new school (new, high risk ventures, pay out with no guarantees). Essentially a difference on the scale of risk aversion.

Feel free anyone.

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10-29-2012, 09:33 PM
  #36
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Originally Posted by The Shrike View Post
Exactly, which is why the NBA raised theirs so much.
The NBA has been raising the luxury penalty because more owners are complaining about the payroll imbalances. The owners can't get enough agreement to implement a hard cap so instead they made the luxury taxes even more punative under the new CBA.

MLB's luxury tax is almost meaningless in the context of discussing whether the NHL should have a luxury tax. MLB's luxury tax is simply a soft cap on the Yankees payroll. 95% of all luxury tax collected in MLB history has been paid by the Yankees and the money collected isn't even distributed to the other teams.

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10-29-2012, 09:45 PM
  #37
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Originally Posted by mouser View Post
The NBA has been raising the luxury penalty because more owners are complaining about the payroll imbalances. The owners can't get enough agreement to implement a hard cap so instead they made the luxury taxes even more punative under the new CBA.
The small market owners complaints about payroll imbalance diminish right about the moment they hear the thud when the extra cash is deposited in their accounts.

Quote:
Originally Posted by mouser View Post
MLB's luxury tax is almost meaningless in the context of discussing whether the NHL should have a luxury tax. MLB's luxury tax is simply a soft cap on the Yankees payroll. 95% of all luxury tax collected in MLB history has been paid by the Yankees and the money collected isn't even distributed to the other teams.
That's a considerable amount of money, where does it go?

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10-29-2012, 10:01 PM
  #38
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Originally Posted by The Shrike View Post
The small market owners complaints about payroll imbalance diminish right about the moment they hear the thud when the extra cash is deposited in their accounts.
I'm sure the poorer teams don't mind the cash they get, but the new NBA luxury tax increases are pretty clearly intended more to dissuade spending over the cap then they are to increase revenue redistribution via the luxury tax system.

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Originally Posted by The Shrike View Post
That's a considerable amount of money, where does it go?
Half to fund player benefits and half into baseball international growth.

It's really not that much money in perspective. The total amount collected has been between $20m and $30m most years for a $7b business. If the NHL collected luxury tax at a similar rate you'd be looking at $10m to $15m per year.

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10-30-2012, 02:11 AM
  #39
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Did somebody say salary cap?

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10-30-2012, 12:46 PM
  #40
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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.
Sure, the NBA and MLB models of luxury taxes don't work. So make the simple fix.. Have a lux tax that funds revenue sharing, but wrap it up inside the existing hard cap structure.

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10-30-2012, 01:13 PM
  #41
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Originally Posted by EndBoards View Post
Sure, the NBA and MLB models of luxury taxes don't work. So make the simple fix.. Have a lux tax that funds revenue sharing, but wrap it up inside the existing hard cap structure.
It does work though, MLB's 30 shareholders are happy with the profits they make. That's the end game and nothing else.

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10-30-2012, 01:23 PM
  #42
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Originally Posted by cutchemist42 View Post
It does work though, MLB's 30 shareholders are happy with the profits they make. That's the end game and nothing else.
NFL is even more successful with a salary cap. MLB would also be successful with a cap.

Luxury tax isn't the cause of MLB's success.

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10-30-2012, 01:27 PM
  #43
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Originally Posted by ottawah View Post
Luxury tax is completely useless. Of course, it curbs the spending of small market teams, it makes no difference to large markets.

The Lakers will always be contenders without a hard cap. The Yankees as well. It is complete BS that rich teams can buy their way into contention and the luxury tax idea is proven to not work. Just ask any fans of the Royals, Pirates and Padres. Fans of the Yankees, Red Sox and Lakers - for some strange reason - seem to like it fine.

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10-30-2012, 01:32 PM
  #44
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Originally Posted by Ogopogo View Post
Luxury tax is completely useless. Of course, it curbs the spending of small market teams, it makes no difference to large markets.

The Lakers will always be contenders without a hard cap. The Yankees as well. It is complete BS that rich teams can buy their way into contention and the luxury tax idea is proven to not work. Just ask any fans of the Royals, Pirates and Padres. Fans of the Yankees, Red Sox and Lakers - for some strange reason - seem to like it fine.
I don't live in the cities of any of those teams (and in fact the Blue Jays have probably been hurt by the luxury tax)...and I still wouldn't have a problem if it was introduced for hockey (and the Leafs aren't even my #1 team)

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10-30-2012, 01:53 PM
  #45
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Originally Posted by cutchemist42 View Post
It does work though, MLB's 30 shareholders are happy with the profits they make. That's the end game and nothing else.
Well, my statement is made under the assumption that the NHL desires to keep some sort of balance in terms smaller market teams being able to retain their marquee talent..

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10-30-2012, 01:54 PM
  #46
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Originally Posted by Ogopogo View Post
Luxury tax is completely useless. Of course, it curbs the spending of small market teams, it makes no difference to large markets.

The Lakers will always be contenders without a hard cap. The Yankees as well. It is complete BS that rich teams can buy their way into contention and the luxury tax idea is proven to not work. Just ask any fans of the Royals, Pirates and Padres. Fans of the Yankees, Red Sox and Lakers - for some strange reason - seem to like it fine.
Again.. wrap the luxury tax inside a hard cap.

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10-30-2012, 01:57 PM
  #47
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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 there best young players.
Without a cap, Edmonton would have even less of a choice to keep some of their best young players, as a rich team like Toronto, Detroit, or the Rangers would just buy them.

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10-30-2012, 03:03 PM
  #48
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Originally Posted by Swarez99 View Post
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).
Basically franchises like the Yankees, Red Sox, etc. pay these other franchises to lose on a fairly consistent basis.

This doesn't impact MLB revenue to the extent that it should due to the large national and local TV deals (which NHL franchises don't have). The gate receipts for Pittsburgh, Tampa, etc. in MLB pretty much suck, which is what would happen to the have nots in the NHL, if the NHL adopted the same dumb luxury tax model.

The owners of NHL teams have looked to the right model in what the NFL does. Every franchise in the NFL can rise or fall on the merits of its management team. Teams that are dominant now sucked at one time. Teams that suck now used to dominate. All you need to be a contender in the NFL is a good GM and coach. The rest will fall into place as the right players are selected in the draft or acquired via trade or free agency. All within the confines of a hard salary cap I might add.

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10-30-2012, 03:05 PM
  #49
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Originally Posted by EndBoards View Post
Again.. wrap the luxury tax inside a hard cap.
That makes the luxury tax unnecessary - just another way to say revenue sharing and, if teams decide to spend so they pay the tax then there is no revenue sharing.

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10-30-2012, 03:19 PM
  #50
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I would also say MLB is better at picking markets too.
MLB is great at picking markets:

Seattle attendance 44% of capacity in 2012

Cleveland attendance 45% of capacity in 2012

Houston attendance 48% of capacity in 2012

Toronto attendance 53% of capacity in 2012

Arizona attendance 55% of capacity in 2012

Tampa Bay attendance 56% of capacity in 2012

Kansas City attendance 57% of capacity in 2012

Baltimore attendance 59% of capacity in 2012 (and this team was in the thick of it)

Now the bottom dwellers in the NHL:

Phoenix attendance 73% of capacity in 2011-2012

NYI attendance 81% of capacity in 2011-2012

Dallas attendance 77% of capacity in 2011-2012

Columbus attendance 81% of capacity in 2011-2012

I am sure you are all starting to get the idea. The only reason baseball survives in the markets it shouldn't is due to the TV contracts. Once the TV revenue slips for baseball these teams without gate receipts are likely to be in trouble. Why don't they have gate receipts? Because no fan wants to watch a loser year in and year out with no chance of moving up in the standings.

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