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Salary Cap to rise from $44 million to $50 million next year....?!

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Old
02-14-2007, 09:16 AM
  #26
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Quote:
Originally Posted by Jimmi Jenkins View Post
Good luck trying to do that, the players will loose their minds if they even think of trying that.

The NHL could potential destroy what they sat out an entire season to achieve.
I know....

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Old
02-14-2007, 09:17 AM
  #27
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Originally Posted by znk View Post
The cap is linked to revenues(54%). So if revenues increase...the cap increases....if revenues go down...the cap goes down.
No real problem there.
I don't get that though. What if something unfortunate happens and the NHL loses a lot of revenue? The cap falls, teams are screwed that have players locked up for x amount of years at y amount of dollars and so on. Like wouldn't a certain team be above the cap for a year when the salary cap falls by a certain amount? Thats what I don't get. If it falls...uh oh.

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Old
02-14-2007, 09:18 AM
  #28
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Originally Posted by Canucks19 View Post
It only increases according to Revenue and Profit, it can also go down i guess...
I'll be amazed to see if that might ever happen. I think that for that to happen there might be another lockout.

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Old
02-14-2007, 09:24 AM
  #29
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The league's revenues are also audited by independent accountants, so if there's number-fudging going on it requires the teams, league, accountants, and union to all be in cahoots on it.

If the NHL were a publicly-owned entity, OK ... there might be an argument to make that this is indeed going on. It's not - the NHL is a private entity, so it's really not in their best interests to be inflating revenue numbers because the CBA guarantees the players a slice of the audited revenues. If audited revenues are reported at $2.3 billion but are in reality $1.9 billion, the players are still going to get 55% or so of the $2.3 billion - the owners will have to eat the shortfall. Is that really in their best interests or the league's best interests?

AFA "surely ludicrous contracts will start rolling back in the nhl" - it doesn't matter, because (1) the players share is still capped, and (2) team spending is capped. A team who gives some 3rd-line guy $5 million for 4 years just makes it more difficult for themselves to fill another roster spot if necessary. Yes, there's the ripple effect - but again, there's a constraint on spending which wasn't present before so salaries won't go stratospheric like you see in baseball. Teams will have to make hard decisions about keeping players by paying the going market; at the same time, players will have to make hard decisions about whether to take the money and pay 15% of it back in escrow, or take less money to help the team and avoid escrow payments.

More ludicrous contracts will only mean that the players have to pay more into escrow, which means more money back in the pockets of the owners. We won't see teams spending $80 million a year on players unless the cap rises that high.

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02-14-2007, 09:24 AM
  #30
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If true The owners should lock the players out and get the salaries in line.

How long before the cheap owners of certain teams start complaining? They should have taken the hard cap of I think 42mm when it was offered. Bodes well for the Flyers.

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Old
02-14-2007, 09:25 AM
  #31
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Quote:
Originally Posted by znk View Post
The cap is linked to revenues(54%). So if revenues increase...the cap increases....if revenues go down...the cap goes down.
No real problem there.
The reason for the somewhat large increase for next year is that revenues will hit a threshold that causes the players' share to increase to between 55% and 56%, so not only are revenues increasing, but the player's share is increasing too. As revenues keep increasing over the years, the players' share will max out at 57%.

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Old
02-14-2007, 09:30 AM
  #32
Meichel Kane
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I don't trust a guy who types in all caps. I've heard 1.5-2 million all year, and I'm supposed to change my opinion when some blogger who can't work a keyboard propoerly tells me of some 6 million dollar jump? But...

...if it's true, more room to keep both Briere and Drury

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Old
02-14-2007, 09:31 AM
  #33
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Originally Posted by NWO View Post
How long before the cheap owners of certain teams start complaining? They should have taken the hard cap of I think 42mm when it was offered. Bodes well for the Flyers.
You'll hear the odd comment, but, like we saw from Edmonton recently, the comments will be more directed to other parties, not the league. You'll see teams claim they need more help from the government to remain competitive. You'll see teams claim that they need help from their fans for more sell-outs to compete in salary. You'll see some teams implement PPV, to get more revenue streams, so they can afford to sign all of their players.

As long as the NHL is a business, you'll always hear complaining. The salary cap doesn't change that.

I highly doubt you'll see too many of the weaker teams complain, and wish they had the old system. A team that can't afford to spend more than $40M next year is still only $10M off of the biggest spenders. A few years ago, the spending disparity was as high as $50M. A $10M difference is peanuts in comparison.

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Old
02-14-2007, 09:32 AM
  #34
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This is all Al Strachan's fault.

He wants big market teams to overspend to build 'powerhouses'.


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Old
02-14-2007, 09:39 AM
  #35
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Quote:
Originally Posted by Irish Blues View Post

More ludicrous contracts will only mean that the players have to pay more into escrow, which means more money back in the pockets of the owners. We won't see teams spending $80 million a year on players unless the cap rises that high.
But will we reach a level where teams automatically lose money because they have to reach the salary floor?

I think that's scarier than the top level spinning out of control, since that must go up as well.

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Old
02-14-2007, 09:40 AM
  #36
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People should not be to concerned about the cap number - the figure to keep in mind is the 54%. If revenues drop, the cap will drop, too.

Oh, and I wouldn't trust anything David Pratt (a talks show host here in Vancouver)says - he's not considered much of an authority on anything, and that's putting it kindly.

I've read that the cap could go up to between $46-48 million, but $50 million seems a little high.

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02-14-2007, 09:40 AM
  #37
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Quote:
Originally Posted by znk View Post
The cap is linked to revenues(54%).
That's kinda correct, though the details are a bit more complicated than that. The 54% figure is for the total players' share of league revenues, not the upper limit (salary cap) for each team. The final amount that players receive in total salaries will be adjusted accordingly at the end of each season to ensure that the players always receive exactly 54% of league revenues. It defines a fixed value, not an upper bound.

And, to be precise, the players' share is 54% only if total revenues are less than $2.2 billion. If revenues are between $2.2 and $2.4 billion, the percentage rises to 55%-56%, and if revenues are at least $2.4 billion, the percentage becomes 56%-57%.

In particular, if the revenue is $2.3 billion, the players' share is 55.5%.

The salary cap figure itself is computed as follows:

Midpoint = [ (Players' share % x Hockey-related revenues from previous year) - (Benefits from previous year) ] / (Number of teams)

Adjusted midpoint = 1.05 x Midpoint

Lower limit = Adjusted midpoint - $8 million

Upper limit ("salary cap") = Adjusted midpoint + $8 million

Thus, if league revenues are $2.3 billion and (let's say) the total benefits paid out are $70 million (which should be in the right ballpark), the upper limit would be

((((55.5% x $2.3billion) - $70 million) / 30 teams) x 1.05) + $8 million
= ~$50 million

...exactly as stated earlier.

This is all described (with much verbiage) in Article 50.4 & 50.5 of the CBA.

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Old
02-14-2007, 09:44 AM
  #38
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Quote:
Originally Posted by znk View Post
The cap is linked to revenues(54%). So if revenues increase...the cap increases....if revenues go down...the cap goes down.
No real problem there.
Yep...exactly, the revenues are obviously there to support the increase to the cap as they are calculated on a fix percentage of revenues. Remember also that there is a league minimum and maximum -- regardless of how high the cap goes we will never see the payroll disperarity among teams like we did prior to the cap.

Also another thing to keep in mind is that if revenues went up to 2.3 billion the players now are entitled 55.5% of revenues as opposed to the 54% thus the cap raises even higher.

I also wouldn't discount revenue sharing afterall it has been documented that a team like the Predators did receive 10 million last year. I also know that there are triggers in place that teams have to meet to get revenue sharing but 10 million is nothing to scoff at.

Edit: Midnight described the formula much better than I did - nice work!

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Old
02-14-2007, 10:04 AM
  #39
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Originally Posted by Honus Joglund View Post
McCabe dig in 3.... 2.... 1....
Hell if anything, if the cap going up to 50 million would be a good thing McCabe wise, would make his contract just a lot less ridiculous.

Top defenseman may be able to command up to what, 8.5 millionish with a 50 million cap? McCabe at 5.75, Kubina at 5.25, and Kaberle at 4.25 look like some pretty decent contracts in comparison.

I don't know about all this... it probably helps the Leafs out since they will spend to the cap every year, but I don't think it's right for the cap to be high enough that some teams don't possibly have the money to spend that much. I'd be more okay with this if it happened a few years later since teams will generally gradually gain money under the cap system, but now just seems like too much too soon.

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Old
02-14-2007, 10:10 AM
  #40
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At this rate of inflation the cap will be near 70 million in 7 years.

That Dipietro contract might look pretty good if the guy is a top 10 starter at 32 years old and taking up only 6 per cent of his team's cap value.... Right now elite goalies are eaiting up 16 per cent of the team's salary, so at a 70 mil cap they'd be earning $11.2 per.

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Old
02-14-2007, 10:13 AM
  #41
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Quote:
Originally Posted by Canucks19 View Post
This was discussed on team 1040 by Dave Pratt a few days back, he posted it up on his blog under February 12th.



Is it just me, or is there something wrong with this? Isn't $50 million a little high?

http://prattsrant.blogspot.com/
No, because now its regulated so that theres some revenue sharing and a certain amount of profits have to be made before it can go this high. As long as the moneys coming in, why not spread it around?

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Old
02-14-2007, 10:16 AM
  #42
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Quote:
Originally Posted by The n00b King View Post
slowly but surely ludicrous contracts will start rolling back in the nhl...ugh
Yup and the NHL took a year off for nothing. There is going to be 2 tiers again because smaller markets can't afford 50 million in payroll.

Guess the NHLPA did allright with the new CBA afterall

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02-14-2007, 10:18 AM
  #43
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wait a minute, if the cap maximum is 50 million, what is the minimum a team has to spend? 30 million??????????

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02-14-2007, 10:24 AM
  #44
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$50 million is way too high. That would mean approximately 10% revenue growth from last year. Looking at ticket sales that is really out of the question. The actual level of growth will be about 4%, which would translate into slightly less than $47 million for the cap next year. Last year the cap grew so much because the owners low-balled their revenue estimate coming out of the lockout, but the fans showed up anyway.

http://www.tsn.ca/nhl/news_story/?ID=187151&hubname=nhl

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02-14-2007, 11:02 AM
  #45
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Originally Posted by Paxton Fettel View Post
wait a minute, if the cap maximum is 50 million, what is the minimum a team has to spend? 30 million??????????
34 million.

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Old
02-14-2007, 11:11 AM
  #46
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Originally Posted by burstgreen View Post
34 million.
THAT is ****ing hilarious The cap floor is $5 million below where the cap max was a year ago.

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Old
02-14-2007, 11:12 AM
  #47
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I don't understand the problem. If revenues are up, which they will have to be for an increase to the cap, then why shouldn't salaries go up? This won't kill small market teams like the hysterics claim, because these small market teams have more money available to spend on salaries.

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02-14-2007, 11:20 AM
  #48
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I guess I'll be the one to point out that this is some dude's blog and not a major news network.

Remember the last time some guy sharing a hockey dude's last name came out with a blog?

Even if he is on a radio station, he's just guessing. We'll see what happens.

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Old
02-14-2007, 11:26 AM
  #49
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Originally Posted by The Dopefish View Post
I guess I'll be the one to point out that this is some dude's blog and not a major news network.

Remember the last time some guy sharing a hockey dude's last name came out with a blog?

Even if he is on a radio station, he's just guessing. We'll see what happens.
No someone alluded to it earlier. I'm sure we'll see it go up this year.


If you want my hypothetical beliefs, it's that it'll go up a sizeable abount after next season due to revenue from the new jerseys. After that, I think we might see the first season in which the Cap goes down as the revenue from jersey sales returns to a more normal level.

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Old
02-14-2007, 11:26 AM
  #50
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Originally Posted by blackrock View Post
$50 million is way too high. That would mean approximately 10% revenue growth from last year. Looking at ticket sales that is really out of the question. The actual level of growth will be about 4%, which would translate into slightly less than $47 million for the cap next year. Last year the cap grew so much because the owners low-balled their revenue estimate coming out of the lockout, but the fans showed up anyway.

http://www.tsn.ca/nhl/news_story/?ID=187151&hubname=nhl
The owners must be changing the numbers, why would they want to keep more money when they can pay extra to the players.

50 Million sounds crazy but if it's tied the revenue then they players are just getting paid what they are owed.

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