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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, expansion and relocation, and NHL revenues.

So the NHL has a soft cap now?

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Old
01-06-2013, 03:31 PM
  #26
Model62
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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.
Right. And it's a way to encourage the rich teams to go along with enhanced RS. Rich, cap max clubs can't point at floor clubs and claim the floor clubs are freeloading.

Well, they can. But they'll look foolish.

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01-06-2013, 04:52 PM
  #27
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Players won big, I'm impressed.

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01-06-2013, 05:04 PM
  #28
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Originally Posted by coldsteelonice84 View Post
Players won big, I'm impressed.
How so? The players went from 57% to 50%, plus the make whole money that was proposed by the owners back in October. There are now terms limits on contracts where there were none previously and the NHL make back-diving/cap-circumventing contracts a lot more difficult. The revenue sharing was set at $200 million which is also what the NHL proposed in October. The NHL got the 10-year CBA they wanted.

The pension stuff might end up being a big win for the players in the future though, I agree. It seems like both sides got things they wanted.

The 70 million/64 million "soft" cap for the next two years ultimately has no impact on the amount of money given to players as a whole, but rather when the money will be paid out/clawed back.

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01-06-2013, 05:17 PM
  #29
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The buyots are going to be the biggest wins IMO, look at a guy like Lecavalier or Bryz.

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01-06-2013, 05:17 PM
  #30
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If the cap can escalate, assuming HRR rises, in a few years the cap will probably be right back at $70 million again, no?

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01-06-2013, 05:26 PM
  #31
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Originally Posted by coldsteelonice84 View Post
The buyots are going to be the biggest wins IMO, look at a guy like Lecavalier or Bryz.
How is that a win for the Players?

The Amnesty Buyouts reportedly do not count against the cap. but they do count against the 50% Players Share. Every dollar going to a bought out player is coming out of the pockets of every other player.

A big win for big market teams with bad contracts/GMs - well, that's a different story ...

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01-06-2013, 05:38 PM
  #32
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Is it possible that teams aren't going to be able to make salary additions through trade or free agency once this season starts if they are over the $60m cap?

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01-06-2013, 05:44 PM
  #33
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Originally Posted by Soundwave View Post
If the cap can escalate, assuming HRR rises, in a few years the cap will probably be right back at $70 million again, no?
By that time, I'm guessing that the NHL is hoping that enough teams can be profitable with only 50% of the HRR going to the players that $200 million is enough to prop up the teams at the bottom.

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01-06-2013, 08:38 PM
  #34
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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?
Soft caps normally have a penalty for exceeding X dollars, there is no penalty here just a plain old fashioned hard 70m cap (with brutal escrow expectations based off 60m which are themselves offset by make whole).

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01-06-2013, 09:06 PM
  #35
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Originally Posted by coldsteelonice84 View Post
The buyots are going to be the biggest wins IMO, look at a guy like Lecavalier or Bryz.
I doubt Lecavalier gets bought out. Tampa isn't going to want to be paying him for the next 20 years.

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01-06-2013, 09:12 PM
  #36
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I doubt Lecavalier gets bought out. Tampa isn't going to want to be paying him for the next 20 years.
Wow, I never realized how crazy his contract was.

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01-07-2013, 09:45 AM
  #37
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Can anyone offer confirmation of how this works:

I'm still seeing teams being allowed to pay out contracts up to 70, but with the difference between 70 and 60 being captured through escrow (effectively, a rollback).

Then the make whole money refunds some of that lost money to players, but not all of it (since "make whole" money is only supposed to represent less than half of the cost of making whole).

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01-07-2013, 09:50 AM
  #38
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Quote:
Originally Posted by Soundwave View Post
If the cap can escalate, assuming HRR rises, in a few years the cap will probably be right back at $70 million again, no?
Yepp. Hopefully the increased revenue sharing will address the issue that could be created by a small number fo teams driving HRR growth while the smaller teams remain flat.

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01-07-2013, 09:54 AM
  #39
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Originally Posted by haseoke39 View Post
Can anyone offer confirmation of how this works:

I'm still seeing teams being allowed to pay out contracts up to 70, but with the difference between 70 and 60 being captured through escrow (effectively, a rollback).

Then the make whole money refunds some of that lost money to players, but not all of it (since "make whole" money is only supposed to represent less than half of the cost of making whole).
Sort of right. But its not the difference between 70 and 60, its the difference between whatever % of HRR is spent on salary and 50% of HRR. It all deepnds on how much teams on aggregate are spending. A few teams could spend to 70, but if sufficient number spend below 50, there may be no escrow pay back. (in theory, i think its too late for that level of spending for this upcoming season)

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01-07-2013, 09:58 AM
  #40
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Originally Posted by cheswick View Post
Sort of right. But its not the difference between 70 and 60, its the difference between whatever % of HRR is spent on salary and 50% of HRR. It all deepnds on how much teams on aggregate are spending. A few teams could spend to 70, but if sufficient number spend below 50, there may be no escrow pay back. (in theory, i think its too late for that level of spending for this upcoming season)
Okay, got it. So 60 is really just an imaginary number, and as soon as the HRR numbers are in, 70 is also an imaginary number, it just allows teams to transition their budgets cleanly in the meanwhile. Escrow is effectively going to get put on steroids to accomplish the whole 12% rollback.

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01-07-2013, 10:14 AM
  #41
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Originally Posted by haseoke39 View Post
Okay, got it. So 60 is really just an imaginary number, and as soon as the HRR numbers are in, 70 is also an imaginary number, it just allows teams to transition their budgets cleanly in the meanwhile. Escrow is effectively going to get put on steroids to accomplish the whole 12% rollback.
70 is a very real number. That's the amount a team needs to be under.

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01-07-2013, 10:39 AM
  #42
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Yeah when Redden's contract could just get buried in the minors off the cap and player share, that seems like a giant jelly donut like softness in the alleged hard cap.

If all AHL salaries over a million count against the cap, other than the make whole and transition costs making the cap appear soft for two years with all the off the books stuff, going forward i'd think the cap looks harder than before.

But of course, there is still a floor pegged 16 mil below the cap set to rise with revenues. A hard floor if you will. If revenues grow as they were before the lockout, there could be a $90mil floor at the end of this cba. If that were to happen will fans express shock that salaries have somehow spiraled out of control again requiring player pay cuts to save owners from themselves? Or will we say look, salaries are linked to league revenues in this league. You must make this much money at the gate each year in order to play. Otherwise, no franchise for you unless other owners are willing to subsidize that teams losses until they get back on their feet.

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01-07-2013, 11:29 AM
  #43
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Reading that the new floor is 15% below midpoint, so less a hard floor than before?

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01-07-2013, 11:32 AM
  #44
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Originally Posted by metalfoot View Post
Reading that the new floor is 15% below midpoint, so less a hard floor than before?
No, just a new way of calculating what the floor is. When last CBA was put into effect, cap of $39M meant that a floor at $16M below the cap meant a big spread. Now, as the cap rises, a $16M is proportionally smaller and smaller. So they're just making a new way of calculating the floor that preserves the spread between floor and ceiling.

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01-07-2013, 11:33 AM
  #45
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Quote:
Originally Posted by metalfoot View Post
Reading that the new floor is 15% below midpoint, so less a hard floor than before?
Is the cap then 15% above? Assuming so, about a 53 mid would see the same cap floor as old system. Anything higher than that would widen the gap.

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