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Sal Galatioto Predicts NHL Cap & Floor Dropping

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#21 toby91_ca

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Posted 12 July 2012 - 12:43 PM

I fundamentally do not understand why we need a salary rollback when the cap itself has almost doubled over 8 seasons. It went from $39.0 million to $70.2 million. Heck, the salary FLOOR is significantly higher now than the Cap was in 2005-06...so how does it make any sense that we need to roll back player salaries?


I think the biggest issue is that the floor has increased so much. My guess from your comments are that you don't understanding why their needs to be a rollback because revenues have obviously increased dramatically, that's why the cap has gone up, what's the problem? Well, revenues have gone up signficantly, but those revenues are being generated by the rich teams. The current system simply caused the rich teams to get richer (i.e. profits have increased because player salaries have gone down). The poorer teams are really struggling now to afford paying our salaries to get to the floor.

I'm not sure what the best solution is though as rolling salaries back and reducing the % that players will get to 50% of league revenues let's say will help a bit, but at league revenues grow (because of the rich teams bringing in all the revenues, the poorer teams are still going to struggle as the floor keeps riding up.

I think it would be tough to not raise the floor as you would then lose competitiveness as some teams would be spending WAY MORE than others (as it used to be). I think the only logical solution is to add in some form of revenue sharing (I think they already have something, but it needs to be more signficant). Some will argue that rich teams shoudln't have to support poor teams, but the counter to that is that the teams are earning money off the league, not simply their own operations, therefore, those league revenues should be shared in some way.

#22 bogeygolfer

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Posted 12 July 2012 - 02:03 PM

basically the new CBA will be a lot like the last one, the framework is already there. I could see more revenue sharing to protect the bad teams and thus protect union jobs. In exchange the cap might come down, but I could also see the cap floor dropping and the cap ceiling staying where it is. The union wont like that, no one wants to be on one of the cap floor teams. So maybe the players agree to cut revenues from 57% to 53%? Who knows.

I can also see the cap floor rules enforced for stringently, more money for rookies, maximum years on contracts, deal structuring rules etc.

I predict well lose a month of the season, maybe less.

#23 Pskov Wings Fan

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Posted 12 July 2012 - 07:49 PM

I think it would be tough to not raise the floor as you would then lose competitiveness as some teams would be spending WAY MORE than others (as it used to be). I think the only logical solution is to add in some form of revenue sharing (I think they already have something, but it needs to be more signficant). Some will argue that rich teams shoudln't have to support poor teams, but the counter to that is that the teams are earning money off the league, not simply their own operations, therefore, those league revenues should be shared in some way.


Agree. Team needs an opponent to play hockey. So unless "rich" teams want to be the only teams left they need to share.

#24 Pskov Wings Fan

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Posted 14 July 2012 - 08:55 AM

The initial NHL proposal for a new CBA sounds like trouble.

http://www.tsn.ca/nhl/story/?id=400580

Here are the highlights:
  • reduction of players' hockey-related revenues from 57 per cent to 46 per cent
  • players would need to wait 10 seasons before becoming unrestricted free agents and that contracts would be limited to a maximum of five years
  • end to salary arbitration and that entry-level contracts would be five years instead of three as they are under the current CBA
  • eliminate signing bonuses on future contracts and mandate that all future deals have an equal value for every year of the contract


#25 Seraph

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Posted 14 July 2012 - 09:04 AM

Yikes, those are all issues the NHLPA will fight to the death. I know the general consensus is that the players got screwed last time so I don't see how they will tolerate any of this.

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#26 RedWingsDad

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Posted 14 July 2012 - 10:40 AM

Redistribution of wealth (revenue sharing) does not solve the problem of teams in weak markets. It put's a bandade on the problem at the expense of the successful owners. In other words, it punishes success and rewards failure... which never helps matters. The solution is to move teams out of weak markets, period. The NHLPA needs to get behind moving failing teams.
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#27 Pskov Wings Fan

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Posted 14 July 2012 - 12:01 PM

Redistribution of wealth (revenue sharing) does not solve the problem of teams in weak markets. It put's a bandade on the problem at the expense of the successful owners. In other words, it punishes success and rewards failure... which never helps matters. The solution is to move teams out of weak markets, period. The NHLPA needs to get behind moving failing teams.


The assumption/hope that stronger markets do exist might not be true. You need people with money who want to watch hockey and are willing to pay for it.

#28 Barrie

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Posted 14 July 2012 - 12:59 PM

What a mess. The entire system needs to be changed. They should study the other 3 sports and see how they run things, and go with a luxury tax, because obviously this system isn't working.

They miss an entire year, only to have worse problems 7 years later? Bettman and the Owners don't have a clue on how to conduct their business. Every 5-7 years we're going to have to put up with this if they continue to be so stubborn and clueless in their ways. Bettman and the Owners need to realize that this is entertainment. I for one have been turning my attention and sports $$$ to Baseball and Football. All the off the field crap that goes on in those two sports get taken care of quickly, unlike the NHL where it overshadows what's going on on the ice.

All this CBA crap and head shots should have been dealt with 3 years ago.

Yikes, those are all issues the NHLPA will fight to the death. I know the general consensus is that the players got screwed last time so I don't see how they will tolerate any of this.


Right, it's time to take down Bettman and the Owners.
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#29 BottleOfSmoke

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Posted 14 July 2012 - 01:13 PM

Right, it's time to take down Bettman and the Owners.


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#30 RedWingsDad

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Posted 16 July 2012 - 10:25 AM

The assumption/hope that stronger markets do exist might not be true. You need people with money who want to watch hockey and are willing to pay for it.


In the event that there are no favourable markets to move a team to, the franchise should be eliminated entirely. In summation, financially insolvent teams should be eliminated or moved to a market where they can be solvent.

Edited by RedWingsDad, 16 July 2012 - 10:25 AM.

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#31 toby91_ca

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Posted 17 July 2012 - 09:53 AM

In the event that there are no favourable markets to move a team to, the franchise should be eliminated entirely. In summation, financially insolvent teams should be eliminated or moved to a market where they can be solvent.

Won't make the players very happy at all, for every team that is eliminated, there would be "x" number of players out of a job.

I think revenue sharing needs to exist to some exit. I agree with the notion that if a market simply isn't working, you need to deal with it (move to a better market), but I think sharing needs to exist because the generation of revenues by each individual team are not solely do to their individual efforts. I think elimination of franchises is the absolute last resort and would be avoided at all costs (both sides, players and owners, probably agree with that).

#32 RedWingsDad

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Posted 17 July 2012 - 10:35 AM

Won't make the players very happy at all, for every team that is eliminated, there would be "x" number of players out of a job.

I think revenue sharing needs to exist to some exit. I agree with the notion that if a market simply isn't working, you need to deal with it (move to a better market), but I think sharing needs to exist because the generation of revenues by each individual team are not solely do to their individual efforts. I think elimination of franchises is the absolute last resort and would be avoided at all costs (both sides, players and owners, probably agree with that).


Not trying to come across as purely disagreeable, but my question to you would be... how does revenue sharing help fix the problem of teams in a weak hockey market that cannot sustain themselves? The only way that revenue sharing would ever *potentially* be viable is if a team in a strong hockey market experienced a local disaster that effected revenues and needed support for a few years until it became financially soluble again. A team that's just in a weak market offers no reasonable guarantee that it will be soluble, and revenue sharing therefor becomes a perpetual band-aid at the expense of successful teams.
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#33 toby91_ca

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Posted 17 July 2012 - 11:54 AM

Not trying to come across as purely disagreeable, but my question to you would be... how does revenue sharing help fix the problem of teams in a weak hockey market that cannot sustain themselves? The only way that revenue sharing would ever *potentially* be viable is if a team in a strong hockey market experienced a local disaster that effected revenues and needed support for a few years until it became financially soluble again. A team that's just in a weak market offers no reasonable guarantee that it will be soluble, and revenue sharing therefor becomes a perpetual band-aid at the expense of successful teams.

I guess we are probably looking at it differently. I don't necessarily see revenue sharing as a "fix" to a temporary issue for which the smaller market team will come out of. I see it more of a permanant thing whereby teams share revenue since overall revenues are driven by the league, not necessarily individual teams. I'm not suggesting you take all the revenues and divide it evenly amongst all the teams in the league (though I'm sure there are people out there that might suggest that), I just think there shoudl be sharing of revenues that are not necessarily team specific. A team can't make money if they aren't playing another team.

To use an extreme example, if the league was made up of 2 teams and they just played each other all the time and the only revenues being generated were from the gate, if one team was in a different geographic region, different economic factors, etc., they might be bringing in significantly more revenue than the other team. In that model, it would make sense for one team to be bringing in more money, but it wouldn't make sense if there was an enormous disparity between the two.

Look, I think the ultimate solution is to get rid of the teams in struggling markets, but I think we need to forget about that, it is not an available option.

#34 LeftWinger

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Posted 17 July 2012 - 06:58 PM

Sure would be hilarious if the players didn't agree to a salary drop and Minny had to "cut" a ton of salary! :lol: Heatly would be GONE after he told the Olsen twins that they could win! But, but, he a F**king All-Star! Oh what would centcougar do?

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