The big news from yesterday afternoon was the report from the Toronto Globe and Mail that the league and the NHLPA had come to an agreement on a salary cap system:
According to a source with ties to both owners and players, and another source close to the owners, there will be a team-by-team salary floor and cap based on a percentage of each team's revenue. The actual percentage is not known, although the league had been demanding 54 per cent.In the first year of what is thought to be a six-year deal, based on revenue projections by both sides, the salary cap will range from $34-million to $36-million, with the floor from $22-million to $24-million . . .
According to the formula, a dollar-for-dollar luxury tax will kick in at the midway point between the floor and the cap. If the floor of the lowest team proves to be $22-million and the cap on the highest team is $36-million next season, then the tax will come into effect at $29-million.
This will allow the wealthier teams to spend a little more money, but will prevent the large gaps in spending in the previous agreement that saw teams like the Pittsburgh Penguins with payrolls as low as $18-million, while the New York Rangers were spending $80-million.
The luxury tax will be spread among the lower-revenue teams to help them stay at the salary floor or higher. Plans for further revenue sharing are still vague, aside from the owners' offer to share some playoff gates, but management sources say they have long been assured there will be further sharing.
One source close to the owners said it is important to realize that the $36-million cap does not mean all of that money will be spent on player salaries. It includes all player compensation, which means benefits, signing and performance bonuses will be paid out of that pool of money.
Tom Benjamin is predicting disaster for the league, and in particular, small market teams with rapidly improving rosters like the Ottawa Senators:
Even after the 24% rollback, Ottawa has committed $23.6 million to ten players next season. That leaves $14 million or so to sign 15 players. (This assumes they have the average of 2 full time players required to cover for injuries.) The unsigned players include Hossa, Havlat, Fisher, Spezza, Volchenkov and Todd White.If Senator fans want to dream the impossible dream and pretend all their unsigned players accept their qualifying offers, they'd have 20 players under contract - five short of what is necessary - and the payroll is at $34 million. John Muckler had better get on the phone and try to give away some players.
John Palmer thinks the report is still too short on the details, but writes that it looks like a win for management. So does Jes Golbez:
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.
As for me, I think it's much too early too tell. Remember, it was a little more than 10 years ago when we all thought that management had scored a big win against the players after the of 1994-95. And we all know how that turned out.
And if this is really the final version of the proposed cap/luxury tax, don't think for a moment that it won't be tinkered with and modified in the years to come. Am I the only person who can remember the famed, "Larry Bird exception"?
Here's a description from Hoops World:
This is the most significant exception in the collective bargaining agreement (CBA) because it allows teams that are over the salary cap to spend freely when re-signing their own free agents. A team can use the exception when re-signing players that have played for three seasons without being waived or changing teams as a free agent. Players keep their "Bird rights" when they change teams via trade. This allows the Detroit Pistons to use the Bird exception to go over the cap to re-sign Rasheed Wallace even though he played for three teams this past season.
No, there isn't any indication that something like this exists in the draft CBA agreement at this point. But I wouldn't be terribly surprised if the league amended the CBA to make room for it, or something very like it.
Finally, I'm not ready to declare this scheme as terrible for hockey just this yet, though it may very well turn out to be that way. After all, if coaches can scheme with the trap and the left wing lock, then I completely expect NHL front offices to figure out inventive ways to circumvent the salary cap.
One thing for sure -- if this is what we're staring down the barrel of, then this offseason is going to be the most interesting in years with all the player movement it's going to force. Stay tuned.
yup…get ready to e-bay your favorite player’s jersey from his old team, meaning your team.