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So the NHL has a soft cap now?

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01-06-2013, 09:57 AM
  #1
Melrose Munch
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So the NHL has a soft cap now?

Teams can spend to 70 million, but the "cap" is 64.2 and the floor is 40.

Do I have this right? Is this not a soft cap?

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01-06-2013, 10:05 AM
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Sydor25
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Quote:
Originally Posted by Melrose Munch View Post
Teams can spend to 70 million, but the "cap" is 64.2 and the floor is 40.

Do I have this right? Is this not a soft cap?

For this season only the cap is $44-$60 million, but teams can spend $70.2 million. Players and owners didn't want to have major movement of players with such a short camp and the summer cap was $70.2 million.

Next season will be $44-$64.3 Million, but the players still only make 50% of HRR with zero escrow limits. I believe that the cap ceiling can not fall below $64.3 million over the life of the CBA, but revenues should be high enough by year 3 to make this moot. Players still only make 50% of HRR and will suffer higher escrow the first few seasons.

The floor should move with revenue.

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01-06-2013, 10:06 AM
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Pepper
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Cap 60M, floor 44M. Teams can spend up to 70.2M.

I believe the difference comes from the 300M make-whole money, so NHL is paying the players more than the 50-50 split dictate to protect current contracts.

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01-06-2013, 10:09 AM
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The only reason $70M is being allowed is because its literally impossible for the team to get back under a $64M cap.

So it's $70M this year and $64M next year, with a $44M floor. Then after that it'll be back to normal with the cap set according to revenue and the floor being $16M from the cap.

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01-06-2013, 10:14 AM
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Freudian
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NHL has a transition cap for two years.

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01-06-2013, 10:14 AM
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Okay, I think maybe this is what's happening:

70M is allowed to stay on the books, so that nobody has to dismantle their rosters overnight.

60M is the actual cap (the 64.3 you quoted is for next year), based on HRR projections of where 50% will be.

The difference between 70 and 60 will likely be recaptured through escrow, presuming HRR projections about 50% are right. This would be effectively a rollback.

THEN the owners will pay back some of that money taken back through the $250M "make whole" kitty. Last I heard there was $250M for make whole, then another $50M for pensions, totaling $300M off the books money going to players.


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01-06-2013, 10:26 AM
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Pepper
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Quote:
Originally Posted by Wingsfan2965 View Post
The only reason $70M is being allowed is because its literally impossible for the team to get back under a $64M cap.

So it's $70M this year and $64M next year, with a $44M floor. Then after that it'll be back to normal with the cap set according to revenue and the floor being $16M from the cap.
But why even mention the 60M cap for this season then?

It's like saying you can't spend over 60M this season but you *REALLY* can't spend over 70.2M?

The difference between 60M cap and 70.2M cap comes from makewhole fund, I suspect.

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01-06-2013, 10:27 AM
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Sydor25
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Quote:
Originally Posted by Pepper View Post
But why even mention the 60M cap for this season then?

It's like saying you can't spend over 60M this season but you *REALLY* can't spend over 70.2M?

The difference between 60M cap and 70.2M cap comes from makewhole fund, I suspect.
I'm guessing that the $60 million cap is for escrow payments. The "make whole" fund will be used for year 1 and some of year 2.

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01-06-2013, 10:31 AM
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Melrose Munch
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Quote:
Originally Posted by Pepper View Post
But why even mention the 60M cap for this season then?

It's like saying you can't spend over 60M this season but you *REALLY* can't spend over 70.2M?

The difference between 60M cap and 70.2M cap comes from makewhole fund, I suspect.
I have say. I am glad we are on the same side again Pepper.

~~~~~~~~~~

I think that this is more then make whole, some team can't get to 64.3 million this year.

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01-06-2013, 10:31 AM
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Melrose Munch
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Quote:
Originally Posted by Sydor25 View Post
For this season only the cap is $44-$60 million, but teams can spend $70.2 million. Players and owners didn't want to have major movement of players with such a short camp and the summer cap was $70.2 million.

Next season will be $44-$64.3 Million, but the players still only make 50% of HRR with zero escrow limits. I believe that the cap ceiling can not fall below $64.3 million over the life of the CBA, but revenues should be high enough by year 3 to make this moot. Players still only make 50% of HRR and will suffer higher escrow the first few seasons.

The floor should move with revenue.
so next year the cap could be 66 million and that would be the limit right?

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01-06-2013, 10:32 AM
  #11
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Quote:
Originally Posted by Melrose Munch View Post
Teams can spend to 70 million, but the "cap" is 64.2 and the floor is 40.

Do I have this right? Is this not a soft cap?
It's been a soft cap since 2005. When teams can do what they've done with guys like Redden, Huet, and Finger, it's pretty much a soft cap with no luxury tax.

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01-06-2013, 10:37 AM
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Sydor25
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Quote:
Originally Posted by Melrose Munch View Post
so next year the cap could be 66 million and that would be the limit right?
It's possible, but revenue would probably have to grow over 15% from last year's record number. Very doubtful with only 50 regular season games and no winter classic.

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01-06-2013, 10:44 AM
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Pepper
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Quote:
Originally Posted by Sydor25 View Post
It's possible, but revenue would probably have to grow over 15% from last year's record number. Very doubtful with only 50 regular season games and no winter classic.
ACtually it would have to be 5.4% higher than revenues of 2011-2012 season.

66M cap would mean (66-8)x30/0.5=3480M revenues compared to 3300M revenues last season.

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01-06-2013, 10:50 AM
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Quote:
Originally Posted by Pepper View Post
ACtually it would have to be 5.4% higher than revenues of 2011-2012 season.

66M cap would mean (66-8)x30/0.5=3480M revenues compared to 3300M revenues last season.
Still not likely.

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01-06-2013, 01:17 PM
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Melrose Munch
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Quote:
Originally Posted by Sydor25 View Post
Still not likely.
Revenues will drop next year.

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01-06-2013, 01:23 PM
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Any word on the escalator?

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01-06-2013, 01:40 PM
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Sydor25
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Quote:
Originally Posted by topher42 View Post
Any word on the escalator?
James Mirtle:
Was told salary floor will remain tied $16-million below cap after the first two seasons. Cap escalator appears to remain in CBA as well.

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01-06-2013, 02:11 PM
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MoreOrr
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Quote:
Originally Posted by Melrose Munch View Post
Teams can spend to 70 million, but the "cap" is 64.2 and the floor is 40.

Do I have this right? Is this not a soft cap?
Sounds more like a Transition Cap to me.

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01-06-2013, 02:18 PM
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Seems to me that the $60 million cap "ceiling" remains so that the floor can be set at $44 million. If the cap was just set at $70.2 million, the floor would then be $54 million.

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01-06-2013, 02:38 PM
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Quote:
Originally Posted by Quokka View Post
Seems to me that the $60 million cap "ceiling" remains so that the floor can be set at $44 million. If the cap was just set at $70.2 million, the floor would then be $54 million.
That's what I was thinking. Since the floor is derived from the cap, they need a number to plug in to the formula.

My real concern is that they haven't gone far enough with revenue sharing. As long as the owners want to expand into non-traditional markets with a gate-driven league they're going to have to use revenue sharing to prop up the less-profitable teams or the floor will continue to kick them in the ass.

The cap was never the problem, it was the floor.

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01-06-2013, 02:45 PM
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Pepper
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Quote:
Originally Posted by Quokka View Post
Seems to me that the $60 million cap "ceiling" remains so that the floor can be set at $44 million. If the cap was just set at $70.2 million, the floor would then be $54 million.
I don't see why NHL couldn't just widen the gap between floor and ceiling for the first years.

2nd year floor is 44M when the ceiling is atleast 64.3M, more than the 16M difference normally.

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01-06-2013, 02:48 PM
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Quote:
Originally Posted by Pepper View Post
I don't see why NHL couldn't just widen the gap between floor and ceiling for the first years.

2nd year floor is 44M when the ceiling is atleast 64.3M, more than the 16M difference normally.
Was thinking the same thing...what's with the 16M in the difference? Couldn't it be 20M? Where does the 16M spread come from?

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01-06-2013, 02:52 PM
  #23
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Quote:
Originally Posted by BLONG7 View Post
Was thinking the same thing...what's with the 16M in the difference? Couldn't it be 20M? Where does the 16M spread come from?
Should be a percentage. 15% to be exact.
The League expands to 32, then 16%.

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01-06-2013, 02:54 PM
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Pepper
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Quote:
Originally Posted by BLONG7 View Post
Was thinking the same thing...what's with the 16M in the difference? Couldn't it be 20M? Where does the 16M spread come from?
I don't know where it came originally but the difference between ceiling and floor was 16M in the last CBA (ceiling = players' share/30 +8M, floor = players' share/30 -8M).

I guess league doesn't want big differences between team payrolls.

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01-06-2013, 03:24 PM
  #25
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Quote:
Originally Posted by Pepper View Post
I don't know where it came originally but the difference between ceiling and floor was 16M in the last CBA (ceiling = players' share/30 +8M, floor = players' share/30 -8M).

I guess league doesn't want big differences between team payrolls.
Puts us back to parity...makes some sense...

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