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12-15-2004, 12:30 AM
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The Solution

The players and owners are 2-3% apart on current year revenues. That difference could be negotiated in a matter of days. The going forward solution may be one of the NHL's own proposals...

A Payroll Range with Cash Recapture system, in which teams would spend within a negotiated range of payrolls. As part of this system, the League would provide that overall player costs (including player salaries, bonuses, and benefits) would equal a negotiated percentage of League-wide revenues (the "Players' Share"). A certain percentage of each team's player payroll would also be escrowed so as to protect against payments to the players in excess of the Players' Share.

Under the Payroll Range System, and unlike a traditional salary cap-based system, there would be disparate payrolls among teams; player contracts could continue to be "guaranteed;" player agents would continue to perform their current function and role; and any concern about salary stratification between high-salaried star players and lower-salaried role players could be addressed by the League and the Union in collective bargaining.

The 24% reduction resets the market. Starting in 2005-06, players are taxed a portion of their salary (say 5%) that goes into an escrow fund. If the league exceeds an agreed upon revenue pool all money is returned to the players. If the revenues fall short, each player is taxed a proportionate percentage. If the tax is not sufficent to cover the revenue shortfall, any remaining years of the agreement are voided.

The risk is a few teams spending too much and throwing the whole league out of whack. At that point some type of tax levy against the team might be appropriate.

Other thoughts -- Salaries for any one player is capped at $7MM. Free agency at age 29. Entry level bonuses are capped at 50% of salary slot and initial term is extended to four years.

Other thoughts?

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12-15-2004, 04:54 PM
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Actually they're a lot more than 2-3%. That line was what Bettman presented and he neglected to mention that the numbers were based on the maximum the players would earn under a cap, and the starting level of salaries in 2005...in year 2 you would expect that gap to widen, and perhaps continue to widen.

Also when he talks about the 53% of revenues he's talking about a number where everyone would spend the maximum...probably not going to happen given the payrolls of some of these teams this past season, so the actually percentage might actually be closer to 50%

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