An interesting look at Salaries vs. Revenues

[nccanes]

I got this from CapsNut who posted it on the Tampa Boards... Rather interesting if it's even an approximate look at the numbers.

FUN
WITH
MATH!!!!!!!!!!!!!!

The interns were bored so I made them add up the numbers in the November 15th, 2002 Hockey News that I keep on my desk. That was the annual "Bucks and Pucks Issue" that prints the salaries of the NHL players according to the NHLPA.

They added up the total salaries and came to the total of $1,271,389,549 for the 2002-2003 season NOT including signing bonuses, deferred payments, and performance bonusues.

Divide $1,271,389,549 by 30 NHL teams and you get $42,379,651.63 as the NHL average payroll.

That falls between the payrolls of the New York Islanders and Carolina Hurricanes who are listed as 14th and 15th respectively.

Now why is this important? Well according to reports that I've read and heard, that $1,271,389,549 represents about 75% of the NHL's total revenues. It is because this number is so out of whack that the NHL Owners want to install a salary cap.

If the $1,271,389,549 is 75% of the NHL's revenues, then the NHL takes in roughly $1,695,186,065 and leaves just around $423,796,516 for the league and the 30 franchises.

Now, that $1,695,186,065 number is also important. Because any Salary Cap that is installed is going to be based on that number. Commission Gary Bettman was instrumental in setting up the current NBA "Soft" Cap. That Cap is currently set at 55% of League Revenue. So let's assume that the NHL is eventually able to do the same thing (get a Cap at 55% of League revenue), the league wide Cap (based on 2002-2003 numbers) would be $932,352,336. Divide that by 30 teams and your team Cap is set at $31,078,411.

That's right, a $31 million Salary Cap. That would mean that only Edmonton, Ottawa, Tampa Bay, Columbus, Atlanta, Nashville, and Minnesota were be under the Cap at the start of last season.

Is it any wonder that teams want to cut salary NOW instead of after next season.

Is it any wonder that the NHLPA is telling their players to brace for a long stoppage?

Now if anybody can provide some documentation to refute the numbers I've used here and would care to correct them, please be my guest.

[StormShaman]

IMO, a salary cap isn't a good thing--it doesn't do anything to keep teams like New York and Dallas from buying players and then just paying the luxury tax.

I'd much rather see revenue-sharing, which IMO will be better in the long run for the small-market teams like Edmonton and Minnesota.

Just my 2 pfennigs

[Logansfrog]

it doesn't do anything to keep teams like New York and Dallas from buying players and then just paying the luxury tax

Storm, I don't understand what you mean here. But I don't have a strong grasp of this whole issue, so it's probably me. :)

Anyway, by luxury tax, do you mean that teams with deep pockets will keep salaries under the cap but buy the big players by giving them all sorts of bonuses? Are bonuses and other perks not included in a salary cap? (I understand any cap hasn't even begun to be negotiated, but I just mean in general.)

[Jeff O Rocks]

I guess Heddy summed up this subject after the party at the Civic Center at the end of the playoff run....when asked if he wanted to stay with the Canes or sign with a team that could pay him much more, Heddy replied...I am happy here..and MONEY ISN'T EVERYTHING!! :D I love hockey but I wish ALL the players could play for the love and not be so greedy...I am afraid that the greed will kill the NHL, which hurts me the most. The NBA and MLB are next!! When baseball players went on strike years ago, the clubs never recovered!! Hockey just can't afford to lose any fans for any reason!! :sad:

ok...I will get off my soapbox now! :roll:

[StormShaman]

In all fairness, Bret did say that money was a consideration--but it wasn't the only consideration. :)

Anyvey.

The "luxury tax" is something that's implemented by the NBA--basically teams can sign whoever they want to however much they want, but if the team payroll goes over a certain amount then the owner must pay a "luxury tax" (which is essentially a fine that gets divided among the other teams in the league--it's a bass-ackwards revenue-sharing thing).

[SouthernHockeyChick]

I agree....just a salary cap isn't gonna cut it. I'd like to see revenue sharing AND a salary cap.

I really, really hope that everyone involved in the process really thinks long and hard about how bad an extended lock-out would be for this league and about whether or not the league can even withstand it.

[Shell]

Bettman looks at new type of CBA
Canadian Press
6/5/2003

EAST RUTHERFORD, N.J. (CP) - NHL commissioner Gary Bettman isn't looking to emulate any of the collective bargaining agreements found in other professional leagues.

Bettman, appearing on CBC during the second intermission of Thursday's Game 5 of the Stanley Cup final, said that he isn't looking at specific systems when thinking about the NHL's new agreement.

``I'm not going to comment on the other systems,'' Bettman said. ``It's too easy for people to speculate about things they really don't know about.''

The NHL's current CBA expires in August 2004 and many have predicted a lengthy work stoppage will occur at that time.

The owners will almost certainly be looking to implement a system to control rising salaries, something the players will vehemently oppose.

Bettman didn't get into specifics on Thursday night. He said that the league needs to function so that all teams have the ability to compete both on the ice and financially.

``We, in my opinion, need a system that links revenues and expenses so that all of our franchises can be healthy and competitive,'' Bettman said. ``It's very simple.

``I didn't say it's going to be easy to achieve and we have a lot of work to do with the players union. But in concept, what we need, to me, is something very simple.''

[Jillsdad]

I colud be mistaken but doesn't the NBA hava what they refer to as a soft salary cap and MLB has the "luxury tax". The NBA has a cap on any free agent signings as long as the free agent was not from your team. Each team can re-sign its own free agents at any price they see fit. It is affectionately called the Larry Bird Rule. MLB on the other hand has no salary cap whatsoever, they just have a luxury tax where if you go over a certain salary budget, you must pay a percentage of the overage to the league which is then distributed to the other teams to use as they see fit. But once again I could be mistaken.

[Jillsdad]

The bad part of the MLB deal is that the league did not dictate how that extra money is to be spent, so greedy owners, instead of spending it on salary to improve their individual teams(ie expos, brewers, etc.), they can lline their own pockets with it or spend it on whatever they want. IMO a big mistake.