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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.

Defining the proper level of payroll disparity

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01-24-2005, 07:59 PM
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Defining the proper level of payroll disparity

One of the problems with the cba oft stated is too much payroll disparity. That $80mil teams make it impossible for $20mil teams. Revenue sharing or revenue sharing through luxury taxes are methods usually used to address payroll disparities. But if we were engineering the system, what would be a proper level of payroll disparity that would be considered normal, expected, on balance fair to all needs?

A. $1mil or less
B. $6 mil difference between top and bottom
C. $15mil
D. $25mil
E $45mil difference between top and bottom

I believe, (but have no real way of knowing for sure) that Ottawa and Tampa, if they had two years of making the finals, could justify spending out of hockey related revenue a $60mil payroll, mainly because of the huge playoff revenues they'd accumulate, and associated increases in regular season revenue.

On the bottom side, teams like Washington for proper purposes, or teams with arenas waiting to be built or owners like in NYI of Pit with short term needs to spend low, or just bad markets pending relocation, they have shown to survive with a floor of $20mil.

So a proper disparity that accomodates reality in my opinion is payrolls between $20mil and $65mil. So E I think is the number you would want to incent and guide towards.

Of course I think as long as teams spending $80mil really dont get that much added talent increase, i still dont think its necessary to hard cap that ceiling, but we seem beyond that now.

What is a reasonable and proper amount of payroll disparity in a fair competitive system using the framework of hockeys cbas?

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