Wednesday, June 08, 2005


NHL: A Capped Agreement?

I have not commented much at all about the NHL talks for various reasons. Why report on non-news and speculation?

Now, it looks like there is something real to talk about...

The Globe and Mail reports that the NHL and NHL Players' Association have agreed on a formula for a salary-cap system based on team-by-team revenue.

According to the Globe's league and player sources, a team-by-team salary floor and cap will based on a percentage of each NHL team's revenue. The paper adds that in the first year - based on revenue projections by both sides - the salary cap will range from $34 million to $36 million US, with the floor from $22 million to $24 million US.

The Globe also reports that the formula calls for a dollar-for-dollar luxury tax to kick in at the halfway mark between the floor and the cap. If the floor of the lowest team is $22 million US and the cap on the highest team is $36 million US, then the 'tax level' will be $29 million US.

The formula would allow wealthier teams to spend a bit more money, but would also bridge the large gaps in spending between higher payroll teams and lower payroll teams.

I am amazed that a luxury tax would come in at such a low rate. To have a $50 mil payroll, a team would need to spend $71 mil at that rate.

Now, presuming that this isn't just another baseless rumour, we must ask if this was really worth it from the PA's standpoint?

The NHL's resolve was much stronger than the NHLPA anticipated and the PA seemed to have much better offers before the cancellation of the entire 2004-05 season.

While pundits such as Tom Benjamin(Canucks Corner) and Lyle Richardson(Spector) seem to think the PA will make up such losses as teams hire 'Capologists', these figures, at first glance, look to be a huge victory for Gary Bettman's wreteched vision of the game.

More to come...

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