Cap up to 50.3 mill...is this a good or bad thing for NHL?

Post by **CatchUp** » Fri Jun 29, 2007 8:35 pm

TSN is reporting the cap number for next year will be $50.3 mil. This is because the PA is expected to vote in favour of adding a 5% 'inflator" to the cap number, as they expect league revenues to climb again next season.

Other than revenue sharing - which you have to make little money (or lose money) to qualify for, the owners are slowly running of out options to keep smaller market teams operating, IMO.

bruins72 · Post by **bruins72** » Fri Jun 29, 2007 8:52 pm

That's a big jump from last season's cap number. What's the cap going to look like in 5 years? This isn't the NFL with their big TV contracts. The NHL mostly works off what they take in at the gate. They really can't afford to keep raising the cap like this. It's defeating the purpose of the cap. I'd actually like to see them keep the same cap number for a couple seasons and if not, only boost it $1 or $2M.

Post by **B. Stinson** » Fri Jun 29, 2007 9:11 pm

Yeah, I'm kind of curious as to where they're getting this room. $6M is quite a leap to make overnight... especially for such a financially challenged league like the NHL.

bruins72 · Post by **bruins72** » Fri Jun 29, 2007 9:20 pm

Maybe they're making the younger players spend their summers as "pool boys" for the owners' wives?

That's gotta be worth some extra money!

Post by **batdad** » Fri Jun 29, 2007 10:22 pm

The way the league/players association calculates revenue for the purpose of the Cap is crazy. With the escrow thrown in, and everything else...it is a complete mess. $50.3 mill is way over the top. At best should have been the 49 I heard discussed. I dunno, I just do not get the league.

How will a team like Edmonton compete at a cap that they will have to play at...Clearly their budget will be below the cap, and if they play at the cap....they will lose big $. Rangers/Wings/Flyers will be loving this....here we go again with all the big names going to those guyses.

rubbish.

Post by **Shadd666** » Fri Jun 29, 2007 10:43 pm

So the cap increased of 11M$ in only 2 years, starting at 39M$ in 05-06

That's insane.

Rubbish is definetely the word here

crosby87 · Post by **crosby87** » Sat Jun 30, 2007 11:30 am

So the players got what they wanted, ie earlier UFA status, and it looks like the NHL is getting nothing, which is what the cap might aswell be soon.

Post by **archibalduk** » Sat Jun 30, 2007 11:39 am

It really does seem like the players are getting what they wanted. It's going to drive the league into the ground. They really need to be a lot stricter with this if they want the league to survive in the long run.

The salary floor will now be at $34.3m; that's nearly as much as the salary cap was a few seasons back! Insane!

Post by **batdad** » Sat Jun 30, 2007 6:27 pm

It is so funny...the players association is going nutso on the people who made the deal: Saskin, Linden, et al. The owners appear happy as clams....Yet, this summer you are going to see someone sign for upwards of 8 million dollars per year, just because the cap went up. False economics if I ever have seen it.

The salary floor at 34.3 mill. Hilarious....Doug Maclean has said his ownership would never let him spend over $33 or so...so now the team has to go higher...jesus. These owners are clueless to reality.

Is Charles Wang looking like an idiot now for his 10 year contracts? Well..Yashin yes. But if Dipietro keeps performing the way he is, and the cap keeps going up...I wonder what he could actually get paid in 3 years...10-12 mill? Not a bad deal. The Cap is going insane, and by signing guys cheaply 1 year, 2 years ago....Wang could be making this ISles team into a dynasty again if he actually manages to sign the right guys to 10-15 year deals. And knows when to quit.

Players must be dancing in the street. Owners of small market teams are looking for ways to get out of the league. This is horrendous.

Post by **archibalduk** » Wed Jul 04, 2007 9:06 am

Here's an interesting article on Fox that's basically pointing out that the salary cap is now allowing the big teams to dominate and the smaller teams to struggle - exactly the opposite of what Bettman aimed to do with the salary cap.

Personally, I think some balance should be reached between the two extremes (but perhaps a bias towards spreading the talent throughout the league). On the one hand, it's dull to see the same big teams winning all of the time (see the English football FA Premiership) but on the other hand perhaps, as the article mentions, we need the big-spending teams, such as the Wings, Flyers and Avalanche, to have a lot of the stars and perform well in order to boost interest in the sport:

Fox Sports wrote:The NHL has never been as popular and as highly ranked in the American sports picture as it was when the New York Rangers won the Stanley Cup in 1994. If teams like the Rangers and Philadelphia are successful, they are guaranteed to provide better ratings than the likes of Ottawa, Anaheim, Edmonton and Carolina, the last four Stanley Cup finalists.

Post by **Shadd666** » Wed Jul 04, 2007 11:39 am

I'm not convinced at all on this one. Sure, NY is a top american market, and having a great team in NY should help TV ratings in some ways, but if winning the Cup is all about money and no more about hockey, then small markets will simply disappear, being unable to follow the wealthy teams. And do you really think the league's image will be better if a third of the teams decide to leave the league? I really don't think so

Oh, sure, the league should have a few positive results during a few years, but not that much on the long term IMO. Firing Bettman would be a far better solution to help the league, and then hire a comish that knows what hockey is! Else, i wouldn't be surprised to see a concurential league born in the following decade, with former $mall market$ and the Canadian teams that can't follow the cap rythm. That may announce the return of big teams in Winnipeg and Quebec, which are markets the league was totally wrong to abandon.

So no, raising the cap like crazy is not going to help the league in anyway on the long term. It could most likely kill the league, or worse, kill the game itself!

Bettman is not the solution to the league's problems. Bettman is the problem!

bruins72 · Post by **bruins72** » Wed Jul 04, 2007 5:52 pm

I can kind of see the point the article was making about needing the major market teams to do well. The NHL was much more popular back in the early 90's than it is now, right? At the time, I was in the military and stationed in Utah. That's not a state known for hockey. They might've had a sub-minor league team there. Or maybe it was just roller hockey? Anyhow, the only thing they knew there was Utah Jazz basketball. Some of the people followed the Denver Broncos in the NFL too. It was a big sports area. Yet ESPN (I think ESPN 2 came out around then) would broadcast game and they usually seemed to feature the big market teams. You'd always see the Rangers, Flyers, Red Wings, Kings, and a couple others. Those teams were in the big markets and they also had some talent on their teams with marketable players. Those were the teams that got the casual fans to watch.

Post by **batdad** » Wed Jul 04, 2007 6:00 pm

No..the NHL was not more popular in the 90s. It had more casual fans turned on in major market cities because some were winning. But you know what, as soon as they would lose, they were gone. If the Rangers go to a cup final again, the league will appear to have a greater popularity again...

But those guys don't stick around, or buy much. IT becomes the cool, in thing for a week or so.

But yeah, of course big market teams bring out more casual fans...there are more people.

But still, if the league is going back to helping out the big market teams, it better not be at the expense of the smaller markets. Revenue sharing better get dealt with fast.

bruins72 · Post by **bruins72** » Wed Jul 04, 2007 6:12 pm

I still contend that the NHL was more popular back in the early 90's. At least in the US it was. I knew a lot of people back then that were from different parts of the country. They had different backgrounds and most were not hockey fans or from hockey hotbeds. At least they were aware of the league then. These days... that's not the case. Heck, even in hockey hotbeds there are tons of people that aren't even aware of the league these days. The NHL has fallen into obscurity.

Post by **batdad** » Wed Jul 04, 2007 7:08 pm

Mod note: Hey Catchup--Hope you don't mind, changed the topic title to reflect where it has gone in the thread since the confirmation of the change in cap.

Now back to the topic. I am not going to argue with you Bruins. Maybe it is because living in Canada I am yet to meet a person who if they were not a hockey fan back in 1990 are now a hockey fan, and I have yet to meet a person who was a fan in 1990 who is not one now. Maybe different here. I dunno. I know some people's passion for the game has waivered and changed since 1990, mainly based on getting older and having different responsibilities in life. Someday, maybe I should grow up too?

Cause that is what those people say to me as their reason for dropping being a fan. Ugh.

Anyway, got an interesting thought about the cap from another board.

2006 free agents who signed big contracts: Kubina, McCabe, Chara, Jovo, Gonchar,Richards,Rob Blake, Havlat signed by Toronto, Boston, Phoenix, Pittsburgh, Tampa Bay, LA Kings, Chicago....what do those teams have in common?

1. They all either missed the playoffs, or did not go anywhere.
2. They all did not sign a big name Free Agent for big dollars this season.

Interesting is it not? Blew their wad last year...no success. Now in difficulty (with the exception that proves the rule clearly being Pittsburgh). LA could be an exception as well, with Handzus, Nagy, Preissing...they are starting to look good, but they blew up their team at the end of last season to start over. Now they still need goaltending.

Could it be that even though we see some guys going nutso this year (philly, NYR,LA as examples only) that these teams will not be able to do it every year, like in the past where two or three teams just kept reloading every season? Too short a sample pool maybe.

Also if the NHL is becoming less popular (not remaining stagnant, or increasing), you can only raise ticket, merchandise prices so much...so the revenues should drop off...

Which means maybe, just maybe these teams are going to be in a cap issue if it goes down in the near future. So far, it looks great for players but in the future if revenues drop...it may not be so great.

Just random thoughts.

Also these front loaded contracts are clearly the way around the cap.

Year 1 9 mill
Year 2 9 mil
Year 3 8 mill
Year 4 5 mill
Year 5 3 mill
Year 6 2 mill
Year 7 2 mill
Year 8 2 mill

40 mill/8 years: adds up to a 5 mill cap hit, over the course of the contract. Pretty good deal for both the team and the player. Get a huge $ player (Briere) and still leave yourself alot of room under the cap.

Plus if he sucks in year 5 You buy out the last 3 years at 2 mill each. Cheapo. Still have the cap hit but it is then spread over 6 years instead of three. 5 mill per year cap hit, 3 years 15 mill. Instead of this, take 2.5 mill per year cap hit for 6 years. Whup de doo....Especially if the cap rises.

The players are benefitting, and the big guy capologists are figuring out how to make this work for teams who have money now, and how to make it work 7 years down the road when a player like Briere is getting really old.

The cap is becoming a non issue for some teams. OThers have to figure out how to get to the floor.

Anyone get any of this???

Edit: Holy rubbish, that was long. Anyone read all of that? I sure don't want too...

Post by **B. Stinson** » Wed Jul 04, 2007 7:40 pm

I think that in just another year or two the league will be right back where they were pre-lockout. At which point, I think there'll be another huge debate over finances... the media will suddenly care and report it everywhere... and then everyone will realise once-and-for-all what a big joke this league is for nearly crashing and burning in a span of only a few years... thus permanently damaging the league's image and any chance of them ever getting any new fans(no matter how form-fitting they make the jerseys).

A little over the top, maybe, but that's where I see this imprudence taking the league.

Post by **batdad** » Wed Jul 04, 2007 7:46 pm

Actually Stinson, I think your point could be right on the mark. But I think there is an out clause for both the NHL/NHLPA on the current CBA? Cannot recall, but it may be in two more years. If the owners have brains (yeah I know, maybe giving em too much credit) they dump Buttman, and dump the CBA...and the players will have to cave in because no way can they afford another lockout.

In the next CBA, front loading will have to be banned, as will buyouts...loopholes must be closed.

This league is going to be in BIG trouble. I mean already a 34 million floor. That will already essentially kill off teams like Columbus, who have a 38 mill budget or so for EVERY SINGLE PLAYER in the organization, not just with the big club.

bruins72 · Post by **bruins72** » Wed Jul 04, 2007 7:48 pm

Yeah, I think there is a major difference between the US and Canada when it comes to hockey, even in traditionally big US hockey markets. I know in Boston there are less people caring about the team or even paying attention to them. Boston used to be obsessed with their Bruins (okay, not like they are the Red Sox but still pretty obsessed). If you look at the stands in a Bruins game, there are a lot of empty seats. Even though the attendance numbers show the tickets being sold, there aren't butts in the seats. The numbers are off due to corporate season tickets that are going unused. You get the occasional casual fan. When I've gone to games I've seen lot of people show up late in the first period, make constant trips to the beer stand, and then leave somewhere during the third period. The real fans have been pushed away by high ticket prices. What you get are some of these people with lots of money and they're just looking for something to do. They don't pay much attention to the game. Either that or they got the tickets for free from work. Anyhow, back in the 80's and 90's it wasn't the price that prevented you from getting Bruins tickets, it was the lack of tickets available.

Oh yeah, I read you LONG bit about the cap. There's actually some interesting info there. The cap is so confusing. Are you saying that the average per year is what the cap hit is, not the actual amount paid for that year? But when a team buys out a contract, they've only got to worry about a cap hit based on the salary left on the contract? That seems like quite a loophole that I can see some teams (New Jersey maybe? Definitely New York and Detroit) exploiting. I like the way the NFL works better. You can cut a player and owe him nothing. You get no hit to your cap. Of course, this favors the teams but I think it keeps players honest. You're not going to see as many guys floating after getting a big fat long term contract.

Post by **batdad** » Wed Jul 04, 2007 7:56 pm

Yes average per year is the cap hit.

No, the cap hit if there is a buy out is the same as the cap hit without a buyout. In my example, cap hit in year 7 is still 5 mill. Even though only paying 2 mill.

But if you buy it out..you actually physically pay the 67% of 4 mill...whatever that is to the player in one shot.

But, The cap hit is then spread out over double the length of the contract. So the cap hit is still 5 mill per, but if you buy out after year 6...2 years left. Double that time...and spread the $10 mill hit over 4 years. This is 2.5 mill cap hit per year for four years. INstead of 5 mill for 2 years.

Make sense? Oh, and any team that signs these 7-8 year front end loaded deals, is looking at the buyout after 5 or 6 seasons as the way out of the deal...No question .. otherwise too much of a risk to sign a 30 year old for that long.

The NFL does not guarantee anyone's contract. That will never happen in the NHL. The NHLPA has guarranteed contracts, and the NFLPA is widdled that they do not. Some day, they will....if the association in football ever gets powerful and smart enough. But I see your point.

Post by **Danny** » Wed Jul 04, 2007 7:58 pm

Yes, the cap hit is the average over the length of the entire contract and not what's being paid in one year, Timonen gets what, 8m in the first year, or something, still a cap hit of 6.3 p/a

Edit
and rather surprisingly Batdad was quicker

Devils88 · Post by **Devils88** » Wed Jul 04, 2007 9:18 pm

the cap raise is just insane

what do the owners think....first they cry the players get too much money and they are losing cash.
now they put up the cap and still throw their money after the Free Agents.
the begin of this season really makes me wonder....cap raise, silly contracts for average players, team moving talks...
it only can get better.......but wait...there's one big FA name out there: Forsberg. Interesting who will burry him with big bucks. (i would like him on the devils rosters, but lou won't spent over 4 mio for a swede)

Post by **batdad** » Wed Jul 04, 2007 9:25 pm

Devils--Since the cap is tied to league revenues and the player percentage of those revenues ( no more than 56% I think is to go to player salaries?) is to remain at or near a certain percentage of league rev's....the league had no choice but to increase the cap. The problem comes when the revenues for the NHL drop which they are bound to in the future because

1. you can only raise prices so much, and fans quit buying. The league is not selling more stuff than before, and as we all know seats being sold is going to remain stagnant, cept for drops because some teams in the league suck and fans won't go see them.

2. You can only change the jerseys so many times to have fans go buy more...eventually, at least I think/hope fans will get widdled and stop buying (although apparently not the case in Vancouver .. home of the jersey change)

3. Some teams are already in trouble, and will not ice a good product--leading to attendance issues.

4. Revenue from TV is going to get worse before it gets better. (Although Hockey Night In Canada--$ went up again, for unkown reasons, when ratings are down)

5. the league is dumb, so revenue will likely decrease, causing cap to decrease, causing havoc for some teams at the new high level cap.

Foppa: May not sign for big bucks, I believe he is eligible for an incentive laden contract because of age/injuries.

Post by **B. Stinson** » Wed Jul 04, 2007 10:39 pm

1. you can only raise prices so much, and fans quit buying.

I know the Flyers are pushing this concept. They've got the new jerseys up for pre-order. And they've got the blank authentic jerseys listed at... $350. Double that, and you've surpassed the amount at which you could buy a phone that doubles as a darn computer.

I'm dying to see how many of these actually sell... especially considering the only change is how the thing fits... on the players.

Post by **batdad** » Wed Jul 04, 2007 10:49 pm

The Flyers? Pushing the financial limits? Nah....no way. Must be an Eklund rumour...

(funny thing is ... I am a closet Flyers fan...just hate oh the last 15 years or so)

Post by **Shadd666** » Thu Jul 05, 2007 2:50 pm

batdad wrote:5. the league is dumb, so revenue will likely decrease, causing cap to decrease, causing havoc for some teams at the new high level cap.

I may be wrong, but i think that the CBA tells that if the Cap decreases, then salaries will automatically decrease of the same percentage, to avoid putting teams into troubles with the cap. So if the cap goes down by let's say 10%, then all the salaries would be downed by 10% as well.

However you're right at the start of your sentence, "the league is dumb"