Salary Cap = Level Playing Field

[NewarkDevil5]

The NHL has done many things to keep the playing field level.

For many years the Montreal Canadiens had first dibs on all players coming out of Province Quebec because they owned the major junior league there. The NHL stopped all that with the draft to level the playing field.

For a long time there were no standards for away team amenities at arenas. The NHL instituted standards to stop teams like Boston from abusing the visiting teams.

Now the NHL has come to another crossroad. This time it wants to level the playing field by setting a maximum amount that teams can spend on player payroll so that larger market teams don't take advantage of the smaller markets' inability to spend beyond a certain amount. A salary cap makes sense because it forces all teams to play within the same parameters. The only place that should determine which team is better is the ice, not the financial statement.

And don't give me the cry of owners abusing the players. $31 million on a roster of 22 players means over $1 million average salary. There are very hardworking people who produce far more for this country than hockey players do that don't make a tenth of that. If owners make a greater profit so what? The game still gets played. But if the owners don't make a profit, the consequences are that the league is torn apart at the seams. You can find hockey players from Alaska to New Jersey to Vladivostok Russia. How many billionaires are there willing to invest in hockey? If players were making $50,000 a year and owners were making out like bandits then I'd understand the complaints, but that is not by any means the case. They are getting paid very handsomely to play a game. A dangerous game, yes, but still a game. They get the top medical treatment in the country paid for by the team. They get their choice of equipment, paid for by the team. I don't feel sorry for the owners, I want a healthy league and the only fair way is a salary cap in which every team starts off at a level playing field.

[sundstrom]

I am certainly not a player-lover in this labor fight. But I will tell you that when you bring up how much money athletes make, you have to put it in context that they are still entertainers in a business.

Nobody screams at the fact that Julia Roberts and Tom Cruise make $20M a picture. But we go crazy when athletes make this kind of money because we somehow relate better to them because when we were younger, we played the same game.

These guys get paid to put asses in the seats. I don't begrudge them the money they get. As you said, Hockey is much more dangerous than baseball and certainly harder to play (especially professionally). If the sport could survive it, I have no problem with them making how ever much they can.

But the sport can't survive it. This is more the case of owners being short-sited and ego driven into giving out ridiculously high contracts that they cannot afford to pay out. A salary cap isn't as necessary as a luxury tax that cripples the teams that spend above the level deemed acceptable by the league (say $45M).

[NewarkDevil5]

I am not advocating a salary cap because I feel the players make too much. I am advocating it because I feel that it levels the playing field among teams, giving them all the same assets with which to assemble a team. As for the movie star comparison, I don't really know or care what they make since the movie industry does not involve competition between teams on a level playing field. Allowing larger markets to spend as much as they want with the knowledge that smaller markets cannot keep up with them is the equivalent of making the nets on the smaller market side of the ice bigger than those on the larger market side. You wouldn't advocate a system in which the size of the net should be changed based on how much money the team makes in a given year would you? So why would you advocate a system where the level a talent a team can get is based on how much they pull in?

[Matteau#32]

A salary cap would be a good thing. However, Bettman needs to be realistic about it. He can not expect to implement a $30-$35MM hard cap. Put it somewhere in the neighborhood of $55-60MM and the players will go for it.

Newark, $31MM for a 22-man roster is a little over $1MM/player, but it will lead to problems. The players are the labor AND the product. The players have a short span to make as much money as they can, they are making tons of money for the owners and deserve their fair share.

[NewarkDevil5]

The cap cannot be above what the smallest market can afford otherwise you put that market at risk. The NHL is a league made up mostly of small markets with a few scattered large ones. $55 million is far more than most small markets can afford.

[Matteau#32]

It is the only way it gets done. The small market thing is a bit of a joke. I can understand the issue with Canadian teams as they have an exchange rate to deal with, but during the last labor stoppage, Pittsburgh was one of the "BIG MARKET" teams. Hell, in 1994 they had the league's highest payroll at $15.1MM. How can the Flyers and Red Wings be large market teams, but the Phillies and Tigers are small market teams?????

[NewarkDevil5]

Things have changed in Pittsburgh since the early 90s. NAFTA, the end of the Cold War, etc. have killed the city's economy and btw, if anything tells you how things are going, the highest payroll in the league was $15 million ten years ago. In a decade its grown to $80 million. If $15 million was workable for players in 1994, then $30 million should be workable for them in 2004. There has not been THAT much inflation.

The reason that the Flyers and Wings are big market teams and the Phillies and Tigers are small is that hockey is much more popular in those cities than in most other cities while baseball isn't as popular as compared to other baseball cities. You have to compare hockey team to hockey team, not hockey team to baseball team. Its apples and oranges. How come Boston is a huge market in baseball but a medium market in hockey? How come LA is a huge market for basketball but a small market hockey town?

Edited February 20, 2004 by NewarkDevil5

[sheeps]

How can the Flyers and Red Wings be large market teams, but the Phillies and Tigers are small market teams?????

Apples and oranges.

[sundstrom]

If you take the league at it's word, they had almost $2 Billion in Revenues. Split that 30 ways and you get $66MM. 60% of that (what players salaries should be) is $39.6MM. Obviously, since this is an average, there are teams above and below this number. I would put a cap of $45MM and a floor of $32MM. You can pay more than the $45MM, but you get taxed...heavily. And that money gets split EVENLY among every team above the floor. If you cannot operate at that level, you should not have a team.

There cannot be a way that big markets don't have an advantage over smaller markets because the money that each team makes is regional and dependent on their own. There is no large TV contract like the NFL to split between the owners. Big markets will always have some advantage, but you can see that it doesn't necessarily matter in the NHL. It helps to spend money, but you certainly don't have to. Many say that this can be because of the level of play in the league and that crappy teams can compete b/c of the trap and boring style hockey. I don't buy that. Chicago's a huge market and they've bombed big time. The Rangers can't buy a clue with all their money. Yes, Colorado and Detroit spend big and see some results. But Minnesotta and Ottawa don't spend a ton and they're succussful. Vancouver and the Isles and Boston are similar.

More often than not, the big spenders don't get the wins.

[NewarkDevil5]

Sundstrom, you and I both remember a time when teams would make trades based on how they'd help their team, not on how they'd affect the bottom line. Bigger market teams will always have more money, but that advantage should not be allowed to translate itself onto the ice. Ottawa is not going to be able to hold onto its players past free agency at the rate that its going and you know it. The Rangers have spent foolishly but that should not be taken to mean that spending cannot get results. Colorado, Detroit, Dallas, St Louis, Philadelphia, Toronto... these are the teams that can and do spend far more than their opponents and benefit from it. I'll say it again, money should not be a determining factor, ever, within the confines of the rink. I don't want to see Calgary forced to trade Jarome Iginla because they can't afford him. That should not happen. It goes against the idea of fair competition. Just because the Rangers haven't succeeded due to spending money is not the point. The point is that they have gotten a quarter of their roster from teams that had to sell due to contracts they couldn't afford to keep. That is whats ruining the league. Not necessarily that the teams that spend the money are successful, because they're not always, but that they're directly hurting smaller market teams.

[Have Another Donut]

I agree the NHL definitely needs a cap or something like it. My question is how would it work? What happens to players now with large contracts? Do they have to renegotiate new ones at a lesser amount? What happens if a team refuses to

go under the cap? How are they penalized? I think the hard cap in the NFL has resulted in a league wide competitive balance that has helped football become the #1 sport in America and the NHL should adapt something like it. Remember also,

the NHL gets comparatively very little TV money vs other sports.

[Matteau#32]

The revenues can be easily manipulated. For example, the Rangers are owned by Cablevision who also owns the arena and the tv station. They can easily manipulate their numbers to show what they want to represent. Oh, want to show the Rangers are very profitable? Then they can increase the amount of money MSG Network is "PAYING" the Rangers, or lower the rent the rangers are "PAYING" Madison Sqauare Garden. The Flyers concession is self-operated where most arenas and stadiums contract out. Want the Flyers to show less of a profit? Lower the percentage the concession entity "PAYS" back to the team. I'd love to see a cap as it would save Dolan and Sather from themselves, but I am trying to think realistically as to what the players would accept. A luxury tax is a good idea, but needs to be implemented correctly. Last year, the Yankees were the ONLY team to have to pay out a luxury tax.

The idea of taxing teams above the ceiling and splitting it amongst the teams withing the range is fine, but there has to be a stipulation that the teams than SPEND that money to improve their teams.

[sundstrom]

"The idea of taxing teams above the ceiling and splitting it amongst the teams withing the range is fine, but there has to be a stipulation that the teams than SPEND that money to improve their teams. "

The stipulation is the Salary Floor.

" I think the hard cap in the NFL has resulted in a league wide competitive balance that has helped football become the #1 sport in America and the NHL should adapt something like it."

The problem with the NFL's hard cap and why it can't be compared is the fact that contracts are NOT GUARANTEED. This is not the case in any other league. If the NHL could have the ability to release players without having to pay them, you wouldn't even need a cap. But players would NEVER go for that.

Also, when it comes to the NFL, there are no trades to speak of, which is part of the fabric of the NHL (not as much as MLB, but it's still important). With the NFL, you're rooting for the laundry as players don't last more than a few years with one team. And personally, I think that stinks.

[Triumph]

The NHL lost 250 million dollars last year, I'm sure all of that loss was just balance sheet manipulation. Give me a break. Yeah there's fiddling going on here and there, but the NHL overall is losing money. No one should be questioning that.

There should be no stipulation that teams have to spend the money they're given by luxury tax. That is absurd. A salary floor is also absurd. If a team sees fit to cut all their veterans, they should be able do so. I know the goal is a competitive league, but the real goal is profit, and if a team is not competitive for a long time, it shouldn't be showing a profit either.

Edited February 20, 2004 by Triumph

[NewarkDevil5]

The goal is a competitive league in which all teams have a level playing field. No team should be forced to give up players due to inability to pay them.

[sundstrom]

The NHL lost 250 million dollars last year, I'm sure all of that loss was just balance sheet manipulation. Give me a break. Yeah there's fiddling going on here and there, but the NHL overall is losing money. No one should be questioning that.

There should be no stipulation that teams have to spend the money they're given by luxury tax. That is absurd. A salary floor is also absurd. If a team sees fit to cut all their veterans, they should be able do so. I know the goal is a competitive league, but the real goal is profit, and if a team is not competitive for a long time, it shouldn't be showing a profit either.

how can you say that a floor is absurb?! there's nothing that disgusts me more than when steinbrenner's $50MM luxury tax goes into the pockets of billionare owners of the Cincinnati Reds.

that's absolute bullsh!t.

the floor is in affect in both the NFL and NBA.

every team should be profitable with that kind of payroll or they should move, sell, or contract.

[Matteau#32]

"The idea of taxing teams above the ceiling and splitting it amongst the teams withing the range is fine, but there has to be a stipulation that the teams than SPEND that money to improve their teams. "

The stipulation is the Salary Floor.

That's not enough. You'll have a team like Chicago and/or Boston stay right at the minimum and the owner will pocket the luxury tax revenue. For arguments sake, you use the $32-$45MM range. Let's say 15 teams are in that range, and the total tax revenue is $45MM (just to keep numbers even). Each of the 15 teams get $3MM, but then the floor has to be raised to $35MM. Only way it will work. No way will Dolan, or Illitch, or Snider agree to pay a tax so Wirtz or Jacobs can add to their bottom line.

Triumph, with a post like that it shows you need to enroll in a few Finance and/or Economics courses.

[NewarkDevil5]

That is why a luxury tax is absurd. No team should be forced to subsidize someone else's team but if that someone else's team can't survive paying $30 million in payroll they don't belong in the league. Therefore a cap is the only way.

[Triumph]

The NFL and NBA have huge television contracts. They're not gate-driven leagues as much as the NHL. Therefore, a team is going to be competitive in order to draw fans into the building, ensuring greater profits. Also, the nature of the NBA draft helps, since there aren't minor leagues for the NBA. Any team that decides to cut everyone is going to get a top 5 pick, which they will have to pay an exorbitant amount to.

There's also a lot more free agency in the NFL and NBA.

I don't think a salary floor is enforcable in the NHL unless they changed the UFA age, thus making it a league like the NFL, where you root for the laundry instead of the players. I believe you said that that stinks. Well, it does. But even without a luxury tax we have one team that isn't trying to be competitive and that's the Blackhawks; and even that is debatable.

[NewarkDevil5]

Why should a team pay for the "right to spend money?" If a large market team makes a lot of money, thats great. They paid a lot to own that team. If a smaller market team doesn't make as much money, well he's still making money on his investment and having fun with it. As long as everyone is making money and the league is competitive from top to bottom there is no problem.

[Matteau#32]

That is why a luxury tax is absurd. No team should be forced to subsidize someone else's team but if that someone else's team can't survive paying $30 million in payroll they don't belong in the league. Therefore a cap is the only way.

With a cap, you are crippling the large revenue teams. You are preventing them from re-investing revenues. The tax is more of a happy medium. The NFL thrived because in the early 60's Pete Rozelle was able to get the owners to view the league as a giant department store. Each team was a department, but the LEAGUE was the company. Their league was more practical for this. Teams all played at the same time, shorter season. 95% of the games sell-out, not sure if this was the case back then, but it has worked. This wouldn't work in hockey, because their is too much dissention amongst the owners themselves. Before they can even begin to think about the war with the NHLPA, they need to get on the same page and think about the league as one company and the teams as departments.

[NewarkDevil5]

You aren't crippling them one bit. The only thing they can't reinvest their revenues in is player payroll. If they want jumbo jets for their players or keeping the best doctors in the world on retainer thats their perogative. How are you crippling them when you're allowing them to spend the same amount as smaller market teams? They can reinvest it in their own pockets for all that makes a difference, it doesn't adversely affect them one way or another. Everyone spends the same, everyone reinvests the same amount in player payroll. That doesn't cripple anyone, it levels the playing field.

[Matteau#32]

maybe crippling wasnt the best word. You are preventing them from using one of their assets to help their team win. Ala the whole goalie playing the puck behind the net scenario and brodeur I laughed about last week. I know, I know different idea. Their fans pay more for tixx, their advertisers pay more for spots, hence the larger tv contracts, they should be able to invest in their team. Why do you think Yankee fans don't complain about ticket prices or having to get a dish to watch YES? Because they know George will give them the best product possible for their buck. Personally, I am for a cap, i think it will help, just trying to show the different arguments.

Anyway, I am off to AC.

[NewarkDevil5]

Money should not be a factor in a team winning.

[thrillhouse]

i think the NHL sees the shape that baseball is in and realizes it needs to set a salary cap now. I think all sports should have a maximum and a minimum. Baseball went from the national pastime or game to a buissness environment where everyone is trying to eliminate (permanantly) their competition.