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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, NHL revenues, relocation and expansion.

It says here Players talking of $60 million luxury tax threshold

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Old
09-04-2004, 08:12 PM
  #26
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Quote:
Originally Posted by DementedReality
under todays system, a team like OTT can keep their team together for as long as they choose too. under a system with a hard cap, it would be impossible.
they can keep there team together till it starts getting way to expensive to keep it together, then they will have to trade some players off or let then be free agents.

Quote:
Originally Posted by DementedReality
the reason the owners want a cap is because it will help the teams like TOR, NYR and PHI who have had ZERO success catch up to the teams that keep popping up out of no where (CRL, ANA, CGY, TBY, BUF, MIN etc ..) and killing any chance of making an imprint in the USA market.
the teams you mention seem to have a great year one year, then dissapear the next, teams like Tor and Phil(i will avoid the Rangers) always seem to finish somewhat high in the standings

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09-04-2004, 08:19 PM
  #27
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Quote:
Originally Posted by Trottier
Hard evidence to the contrary: it's working in Major League Baseball. Look it up. Salaries overall have decreased 3% since the luxury tax was implemented in the 2002 CBA. With one notable exception - the team in NY that hasn't won anything since 2000 - not one team has ventured over the luxury tax threshold.

Of course, that may not impress those wishing draconian steps, with the fantasy of turning back salaries to yesteryear.



The NHL is lacking competiveness? Wonder if they are saying that in Anaheim, Carolina, Calgary, TB, etc. Let me guess: fan of a non-contender?

There are valid reasons for clamoring for changes to the CBA (though a hardcap is the worse thing that could happen to the NHL and its fans). But the idea that the league needs more competitivness (parity ) is without merit. All one needs to do is check the tightness of regular season standings, check the closeness of individual games on a nightly basis. Then, check the varied results of recent playoff seasons. The NHL is as competitive as any sports league can be without being watered down with medicority, er, parity.
Reading this post made me re-think mine. I'm talking more about teams like the Blackhawks and Penguins but they could make a run like the Ducks and Flames did maybe not as easily but there is a possibility. There is a competitiveness in the league right now, but if you can get every team to commit to 45 millon to spend the league will be more competitive. Sure the Hurricanes and Ducks made those runs but they didn't continue that into the next season. And I'm a fan of the Flyers, would of wanted a cap so we didn't over pay for LeClair, Burke, and Amonte.

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09-04-2004, 08:26 PM
  #28
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Really? Having a high priced team that consistently misses the playoffs is best for business in New York?

Wouldn't they be in a better place in terms of business if they had a cheaper younger team like Tampa or Calgary or San Jose or Ottawa?

Under the current CBA, the teams that Ottawa, Tampa, San Jose, and Calgary have put together won't remain cheap forever. The different between a New York and Tampa having the same team (lets use the 04 Tampa cup team as an example), is quite huge.

Tampa wins cup. Cory Stillman's contract is up. Tampa loses Stillman and replaces him with Prospal. New York keeps Stillman. New York also can afford to sign Khabi, St. Louis, Lecavaliar, Richards, Sydor, etc when they reach UFA age to long term deals. Therefore creating a dynasty or very competetive team for years.

Lets face it, Ottawa isn't going to have Havlat, Hossa, Chara, Redden, Spezza, etc forever. New York could afford that.

Still I think the CBA is very fair. Competition is much more close than any other sports league.

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09-04-2004, 08:50 PM
  #29
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I disagree with that one posters thoughts that a team like Ottawa could be kept together under the current system. I could be wrong, but I think you could look at a team like New Jersey to see what it's like trying to keep a high end team together. Their payroll has gone up considerably since they started contending for and winning cups. To boot, they've been forced to trade guys like Sykora, Arnott, Guerin, and others along the way ... not to mention losing others like Holik, Tverdovsky (I know a stretch!!! ), Niewendyk, etc. to free agency.......

The days of a dynasty like say what the Oilers had are gone under any system........

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09-04-2004, 09:06 PM
  #30
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Originally Posted by DementedReality
so your idea of fair is a team like OTT would have to let someone else go in order to keep Spezza ? they built up a good young team THE RIGHT way and you want them to be penalized so teams like NYR and CHI and BOS and FLA or whoever else runs their team like crap can pick off these guys ?

under todays system, a team like OTT can keep their team together for as long as they choose too. under a system with a hard cap, it would be impossible.

the reason the owners want a cap is because it will help the teams like TOR, NYR and PHI who have had ZERO success catch up to the teams that keep popping up out of no where (CRL, ANA, CGY, TBY, BUF, MIN etc ..) and killing any chance of making an imprint in the USA market.

you guys are sheep.

dr
Ottawa can keep the team together as long as they have an owner who is willing to continue to take losses for the team, not as long as they want.

Ottawa still may be able to keep their team together. The salary cap wouldn't have to take full effect next season. It could be a gradual process.

Even if Ottawa did have to let a player or two go, they'd just be doing what small market teams are doing now. At least all teams would have an equal chance.

Saving Ottawa's team isn't the priority. It's saving all 30 teams.

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09-04-2004, 09:20 PM
  #31
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Quote:
Originally Posted by Licentia
Ottawa can keep the team together as long as they have an owner who is willing to continue to take losses for the team, not as long as they want.
my exact words were "as long as they choose to"

under a cap, whether they want to or not, they will not be allowed to. big difference.

dr

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Old
09-04-2004, 09:33 PM
  #32
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Duck the Players' Association...60 mil luxury tax?...they are out of their ******* mind!!!

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09-04-2004, 10:00 PM
  #33
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Quote:
Originally Posted by DementedReality
my exact words were "as long as they choose to"

under a cap, whether they want to or not, they will not be allowed to. big difference.

dr
cap or luxury tax no matter what either way would kill any team w/ a group of talented youth, no matter if they're the sens, wings, ducks, preds, don't matter, any team would be in trouble with a tax, a cap would at least help put salaries in check and there wouldn't be outrageous spending on one player like there has been for the past decade

a tax would just deter gm's from outrageous contracts, but the few who could afford to pay would still pay and would still throw the league for a loop like the present day

a cap meanwhile, would make gm's think twice about handing out the outrageous contracts, and while some, such as you, would argue that it limits what a player can make, the player would still make quite a large sum when it all comes down to it, if one team couldn't pay, another team would have more room to pay IMO, the wiggle room would be there, a cap would show all players what they're truly worth, certainly if a gm thought so and so is worth 8 mil, that's fine and dandy, however he'd be stretched to the limit to ice a competitive club after that IMO, depending on where the cap is set at, im guessing right now that it'd be somewhere between 40 and 55 mil... just a rough estimate, 31 is way too low, but 60 seems a little too high, granted if 60 is a starting point it wouldn't be too bad of a springboard, the top spenders would have a little leeway before the full impact would hit

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09-04-2004, 10:08 PM
  #34
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What some people don't seem to realize is that the current system makes some teams make hockey decisions because of money and others make hockey decisions because they make sense from a hockey perspective. What a cap would do would make each team balance hockey and money decisions rather than just a few teams. The current system has a number of factors which make salaries escalate which cannot be controled by gm's.

1) Qualifying offers- regardless of if you had a good year, congrats you get a 10% raise.

2) Arbitration- you had a good year, you made 1.5 million dollars last year, but your stats are about the same as player x, (who just happens to be over-payed by the "insert high spending team here") so you now get 3.5 million dollars congratulations. Both of these factors are uncontrolable. Sure a GM can walk away from an arbitration award but how often does that happen, why doesn't it happen, because some team will pay that award and now you just lost a member of your hockey team for nothing. The same for qualifying offers, don't give them one and now you have to replace him with another player who a) isn't as good, b) is more expensive, c) both.

3) Guarenteed contracts- NFL teams can get rid of a player at any time just by ripping up his contract, NHL teams can't. If they release a player, they still have to pay him. All three of the things have helped to drive up players salaries beyond where team can just make hockey decisions. If it was strictly hockey decisions, I don't think that Hasek would have won a Cup with Detroit. Buffalo would have kept Peca and added a couple of pieces to help get them over the top and he would have stayed in Buffalo. Does he win one in Buffalo? I don't know, but I would have liked to see that happen. But because of the above factors, Buffalo was not able to keep all of their pieces and add to them because the team had success and each piece got more expensive and they were forced to make decisions based on money not on what was best for the hockey team.

I don't think that a luxury tax will work unless the threshold is low( no more than 40-45 million) and the penalty is high (100% for the first 5-10 million over and 200% for the rest). The problem is that starts to sound alot like a cap in the players ears.

Either way, what ever happens, I hope that it will force each team to consider not only what is best for the on-ice product but also what is best for the financial ledger as those low budget teams have to do now.

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Old
09-04-2004, 10:14 PM
  #35
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Quote:
Originally Posted by Benji Frank
I disagree with that one posters thoughts that a team like Ottawa could be kept together under the current system. I could be wrong, but I think you could look at a team like New Jersey to see what it's like trying to keep a high end team together. Their payroll has gone up considerably since they started contending for and winning cups. To boot, they've been forced to trade guys like Sykora, Arnott, Guerin, and others along the way ... not to mention losing others like Holik, Tverdovsky (I know a stretch!!! ), Niewendyk, etc. to free agency.......

The days of a dynasty like say what the Oilers had are gone under any system........
The Red Wings have been able to keep their team together. That is the reason for their high payroll, not free agent signings.

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09-04-2004, 10:19 PM
  #36
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Originally Posted by Licentia
They would have to make room on their roster or let him go. Or, if there is no other team that has room for him, then he would have to accept less pay. Or they could go over the cap at a steep penalty. Trust me, if there is a cap, the average salary will no longer be 1.8 million or whatever it is. More players will be making 6 digit salaries.
Like I said, I realize salaries will be lower, I was just giving an example in today's terms.

And I think you see my point. Iginla would have to take a huge paycut, or go somewhere else. If he left, it would hurt the Flames, but isn't the point of a cap to help teams like the Flames? So what if the Flames traded a bunch of other players to open up cap room? Then Calgary is back where they started, with a bunch of minor leaguers and one superstar, and no chance to compete.

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09-04-2004, 10:21 PM
  #37
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Originally Posted by sabresfan65
What some people don't seem to realize is that the current system makes some teams make hockey decisions because of money and others make hockey decisions because they make sense from a hockey perspective. What a cap would do would make each team balance hockey and money decisions rather than just a few teams. The current system has a number of factors which make salaries escalate which cannot be controled by gm's.

.
A cap would still make teams make decisons for monetary reasons, but in a backwards way. See my point about Iginla earlier in the thread.

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09-04-2004, 10:25 PM
  #38
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Duck the Players' Association...60 mil luxury tax?...they are out of their ******* mind!!!
It is just a starting point. The owners probably proposed 32 million, the PA proposd 60 million, and they'll meet somewhere in between.

At least they are now discussing a luxery tax. Looks like the PA will cave in to a soft cap.

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09-04-2004, 10:28 PM
  #39
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Originally Posted by Malakhov
Sorry but the CBA has to change or nothing will stop some teams to give ridiculous contracts, just look at Toronto this summer.
Uhh, everybody will start giving their FAs pay cuts?


Last edited by H/H: 09-04-2004 at 10:37 PM.
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09-04-2004, 10:41 PM
  #40
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Quote:
Originally Posted by hockeytown9321
A cap would still make teams make decisons for monetary reasons, but in a backwards way. See my point about Iginla earlier in the thread.
Right now a number of team have to make decisions for monetary reasons anyway.
What a cap would do is force ALL teams to have to make these decisions.

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09-05-2004, 12:29 AM
  #41
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Originally Posted by hockeytown9321
Like I said, I realize salaries will be lower, I was just giving an example in today's terms.

And I think you see my point. Iginla would have to take a huge paycut, or go somewhere else. If he left, it would hurt the Flames, but isn't the point of a cap to help teams like the Flames? So what if the Flames traded a bunch of other players to open up cap room? Then Calgary is back where they started, with a bunch of minor leaguers and one superstar, and no chance to compete.
??? Why would they have no chance to compete?? Every team would have the same salary limit as Calgary, and every team would be just as squeezed as Calgary. Look at the overall, not just one team.

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09-05-2004, 02:03 AM
  #42
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I have to agree with DR, Trottier and a few others. The plunge towards a hard cap is short sighted and not the cure-all it's been portrayed as. The idea of building a team for the long haul would be out the window, roster turnover would increase and the league would stand a good chance of becoming a revolving door of contenders. All are just the sort of things that have turned me off the NFL in a big way.

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09-05-2004, 02:42 AM
  #43
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They wasted 20 hours going over each team book by book, when they could of sat together researched all of the other leagues, and see how they work which all some sort of salary structure.

NFL uses a hard cap, NBA uses a soft cap, and the MLB goes by a luxury tax. Take out things that work and don't, and put the pecies together that would fit the NHL.

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09-05-2004, 03:02 AM
  #44
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Originally Posted by Go Flames Go
NFL uses a hard cap, NBA uses a soft cap, and the MLB goes by a luxury tax. Take out things that work and don't, and put the pecies together that would fit the NHL.
The NFL system won't work for the NHL because NFL gets most of it's money from the national TV contract. In all other sports, each team has local TV contracts that make up a large sum of the teams earnings. A Team like the NYR would in no way shape or form want to share local revenue with other smaller market teams(since dolans owns both the rangers and MSG network, he could always just sell the rights to himself for a buck to really screw the agreement).

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09-05-2004, 09:34 AM
  #45
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Originally Posted by Licentia
??? Why would they have no chance to compete?? Every team would have the same salary limit as Calgary, and every team would be just as squeezed as Calgary. Look at the overall, not just one team.
So its fair that they wouldn't be able to resign superstars they developed, even if they had the money? The bigges beef of the small payroll teams is they can't keep their players. How is this any different?

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09-05-2004, 11:39 AM
  #46
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At the end of the day a hard cap does not address the critical problem facing NHL teams, and that is the disparity between revenue streams. With no appreciable revenue coming from a national TV contract (in contrast to the NBA and NFL), teams are essentially on their own to develop revenue streams.

Some teams have been particularly adept at the development of revenue, either due to sheer market size or in some cases astute business decisions (e.g. Colorado). But other teams simply do not have the rabid hockey population base to compete at that same level. The New York Rangers for instance have nearly $25 million a year coming in from television contracts, whereas Nashville has a little over $2 million.

How is a hard cap going to increase revenues for the small market teams? Will it increase competitiveness and level the playing field? Well, it may increase parity, but for anyone that has watched the NFL recently knows, parity doesn't offer much in the way of financial security. A team may make the playoffs one year and not the next, that is the reality of a parity based system. There is little hope under a hard cap system of sustained excellence. It won't help the small market teams if their revenue is going to fluctuate widly under a parity-based hard cap system. How do you have any ability to plan financially for your organization whe you cannot predict your playoff appearances from one year to the next? That is the reality of what a hard cap will bring, a competitive balance that likely will breed greater financial insecurity.

When you are looking at the situation honestly, how will a hard cap increase the revenues for small market teams that have essentially operated under a self-imposed hard cap for years? Where will their much needed additional revenue come from?

Peter Karmanos, owner of the Hurricanes, alluded to the non-solution that a hard cap offers when he noted in a Carolina paper earlier this year that a hard cap doesn't solve his teams revenue stream problems.

This basic reality is why the NHLPA has seemingly taken an intractable stance with respect to the issue of a hard cap. The NHLPA knows that this is a desparate attempt for the NHL owners to solve a problem that they don't want to deal with directly. That problem is the revenue-stream financial disparity between NHL organizations. That is why the comparisons between the NBA and NFL are so ill-founded, both the NBA and NFL have an egalitarian system of revenue sharing, and both leagues have large pools of revenue to share. The NHLPA is banking on the internal unwillingness of the so-called large revenue cities to ultimately cause a rift in the owner's apparent solidarity. The NHL owner's have spun a brilliant media picture of this labor situation as being impoversihed NHL owners vs. the greedy NHLPA. But the NHLPA knows that the revenue sharing issue is simmering under the surface of this situation, and it knows that ultimately this isn't the NHL owners vs. NHLPA as it is large market owners vs. small market owners.

If you start looking at the financial realities of the situation, a luxury tax system may provide a means to revenue share that a hard cap system simply does not offer.

That is why you will see the resolution of this situation being a luxury tax that is phased in over a period of 2-3 years to allow the large market teams to adjust their salary structures.

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09-05-2004, 05:53 PM
  #47
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Quote:
Originally Posted by hockeytown9321
So its fair that they wouldn't be able to resign superstars they developed, even if they had the money? The bigges beef of the small payroll teams is they can't keep their players. How is this any different?
If every other team had the same payroll limits, they wouldn't be able to offer that much more than the original team. There would be more incentive for the player to stay with his original team.

Contrast that to now, where teams like Toronto, New York and Detroit could offer a superstar $10 million, which is really a slam-dunk incentive for players like Holik, Hasek, etc... to leave their original teams.

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09-05-2004, 06:11 PM
  #48
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Originally Posted by Scheme
If every other team had the same payroll limits, they wouldn't be able to offer that much more than the original team. There would be more incentive for the player to stay with his original team.

Contrast that to now, where teams like Toronto, New York and Detroit could offer a superstar $10 million, which is really a slam-dunk incentive for players like Holik, Hasek, etc... to leave their original teams.
no, a team could be total crap and have no good players and alot of cap room.

Let me turn the question around a little bit. The biggest beef I see against teams like Detroit is that they can force the smaller payrollteams to give away their talented young players, because those smaller teams can't afford to compete, therefore the current system is unfair. Well, lets say under a cap, Detroit doesnt have the ability to keep their developing players. In both situations one team is not able to keep players they developed into stars. Why is it unfair now when Detroit does it, but fair under a cap? What's the difference?

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09-05-2004, 07:16 PM
  #49
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Originally Posted by hockeytown9321
Let me turn the question around a little bit. The biggest beef I see against teams like Detroit is that they can force the smaller payrollteams to give away their talented young players, because those smaller teams can't afford to compete, therefore the current system is unfair. Well, lets say under a cap, Detroit doesnt have the ability to keep their developing players. In both situations one team is not able to keep players they developed into stars. Why is it unfair now when Detroit does it, but fair under a cap? What's the difference?
Ummm, would the answer to that be that under a cap, every team would have the same ability to keep and retain their stars? That is considerably different from the current system where some teams can keep their stars and other teams can't.

Under a cap, every team would have to operate under the same budget. At that point, it comes down to how well teams draft, how well teams develop players, and how well teams trade. In other words, a GM has to know what he is doing and make good hockey decisions, not just sign the best free agents available, or run up player salaries so other teams have to trade good players before they reach free agency.

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09-05-2004, 08:00 PM
  #50
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Quote:
Originally Posted by Scheme
If every other team had the same payroll limits, they wouldn't be able to offer that much more than the original team. There would be more incentive for the player to stay with his original team.

Contrast that to now, where teams like Toronto, New York and Detroit could offer a superstar $10 million, which is really a slam-dunk incentive for players like Holik, Hasek, etc... to leave their original teams.
You're right, the main reason for a salary cap isn't to enable each team to make a profit. It's to enable each team to hold on to its players--if they want to stay.

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