Is a 30-35 million cap even possible?

With the recent negotiation breakdown I thought that I would look into the feasibility of a salary cap. It seems like the owners won’t bend on this so I looked at the current salary of my favorite team and wanted to see if a rumored cap of 30 to 35 million was even possible.

I will start by saying that my favorite team is the Leafs and their player contracts were the easiest to find as it is listed on their website. I will also answer the arguements that I am sure to hear from fans of teams like Atlanta who only had a team payroll last year of 27.2 million compared to the Leafs 61.8.In looking at the Leafs payroll for next season 2005/06, they only have 12 players under contract. The players are; Belfour, Tellqvist, Bell, Colaiacovo, Hedin, Kaberle, Klee, McCabe, Stajan, Sundin, Tucker and Wellwood. The salaries of these players adds up to approximately 30 million dollars, with 8 million of that going to Mats Sundin who is under contract until 2007/08. If a cap does come into affect at the 35 million range then the Leafs have about 5 million to spend on 2 more defenceman and about 14 forwards. This is just not possible.

Many people have suggested that the league will have to grandfather a salary cap in and this seems like a certainty. Teams like my Leafs, the Flyers, Wings and Avalanche cannot be punished for playing within the rules of the previous CBA. Now, there are those that will say that the Leafs and the big money spenders have caused their own problems and will just have to cope with a cap. Is this really the case, well lets look at the Thrashers and their 27 million dollar payroll. Things might look good for them right now but lets take a look at some of their players salaries; Heatley – 1 million, Kovalchuk – 1.1 million, Lessard – .5 million, Kloucek – .4 million, Stefan – 1.3 million. I could keep going on with this but my point is these guys and others will all be getting raises, especially Kovalchuk and Heatley who should get in the area of 6 million and 5 million respectively. Just adding these two salary increases pushes the Thrashers payroll to 36 million and over the cap.

I believe that the current CBA does not work and will kill the NHL and I also believe that we pay our pro athletes way too much money BUT I also feel that the owners have caused this mess themselves. Unfortunately teams like the Leafs, Rangers and before them the St. Louis Blues have tried to hide a deficiency in any ability to develop a team through the draft and drive up player salaries by raiding the smaller market teams. They did this however within the rules of the CBA and thus caused their own problems. I am not really sure how owners of teams like Toronto, Philadelphia, Detroit, Colorado, St. Louis, Dallas, Los Angeles, and the Rangers can justify a cap.

Yes, a cap might help to save the league but if the rumored 30 to 35 million is correct I just can’t see how teams can sign 25+ players and play within those rules. This means that each player on average will earn less than 2 million – this isn’t going to happen.

The information for this article was obtained through TSN, the Maple Leafs website and the NHLPA.

23 Responses to Is a 30-35 million cap even possible?

  1. Minky says:

    i didn’t read all of that, but my opinion is 30 – 35 million cap is impossible with player salaries these days.

    I think what they should do, is make the cap around 40-50, and reduce all the players salaries by 30%. If some players don’t like it, they can leave, it would be a better game with players playing that have a passion for the game, and not for a fat paycheck.

  2. Rancid says:

    if the cap is around 40-50 the rangers can sign 2 more players…which is a fairly good upgrade on the squad they had last year.

  3. cgolding says:

    The owners problem is that it is from their own ranks that the problem has been created, similar to every other sport where this has become a problem. They should adopt a system of luxury tax, similar to the NBA, with the gradual luxury tax increase that baseball has been working in… but more punitive.

    Bettman wants a 30-35 million dollar cap(I think it has to be more like 35-40, but that is beside the point) set the soft cap at that 30-35 mil mark, and then exact the tax from there… gradually.

    year one: 10% of amount over goes to pool for other teams.

    year two: 20% of amount over goes to pool for other teams.

    year three: 40% of amount over goes to pool for other teams.

    year four: 80% of amount over goes to pool for other teams.

    year five: 100%.

    okay… we don’t want this to be matching right away, because that is really unfair to teams that weren’t doing anything wrong in the first place. 10% seems reasonable, so if the cap is 35 and someone is at 60, they need to put 2.5 million towards a pool of cash that goes to the teams that are below the cap(there NEEDS to be a rule that these teams will use that cash for their own salaries rather than pocketing it, which is an issue in baseball).

    Now, 2.5 million is not all that much, but if you stay at that team salary you are going to be paying 5 the next year, then 10, then 20, and in year five matching dollar for dollar that you go over the cap.

    The reason you step it up like this is to allow as many contracts as possible to clear the books before you get truly punitive. Most players don’t have contracts much more than 3 years(actuaries have proven that 3 is the optimal contract to sign a player to), and most of those contract were signed prior to this CBA, so they’ve played at least a year of that contract already. So reasonably by year 3 of the new CBA most teams would be conforming to the new luxury tax system, unless they wanna throw cash to other teams, and the contracts would be reasonable to exist under the system.

    So, if teams wanna dish out the cash still, and keep players they already have… they can. Which sorta satisfies the players belief in this so called free market system they want to live under… while at the same time basically creating a hard cap, because most teams will not want to deal with a 1:1 penalty down the road for contracts over the cap.

    The hard part about this is my desire for a rule that forces team owners to use the cash they recieve from this towards there team… I’m not sure how strictly enforce that rule, but I don’t think it’s fair for teams to recieve cash from a luxury tax and then rather than using that for their team they simply pocket it to help out the bottomline, because that doesn’t solve the “competitive balance” problems and is unfair to both that teams fans, and the fans of the team that are giving up the penalty cash.

    nevermind the bullox,


  4. TheCoach says:

    I think they’d also introduce the Larry Bird rule, like in the NBA. This would prevent owners from splurging in free-agency, but would allow them to re-sign their key players without being penalized for going over the cap.

  5. cgolding says:

    Heatley – 1 million, Kovalchuk – 1.1 million, Lessard – .5 million, Kloucek – .4 million, Stefan – 1.3 million. I could keep going on with this but my point is these guys and others will all be getting raises, especially Kovalchuk and Heatley who should get in the area of 6 million and 5 million respectively. Just adding these two salary increases pushes the Thrashers payroll to 36 million and over the cap.

    i didn’t mention it in my response, but the direct result of salary caps is that players salaries will not grow as quickly or as high as they have in the past decade. that is specifically why NHL players aren’t interested in a hard cap of any kind, it will eliminate the growth that they’ve come to enjoy across their career… they’ll still be well paid, but much slower. if the NFL didn’t have a salary cap the player salaries would be absolutely monstrous considering the amount of cash that is flowing into that league…

    look at baseball… if baseball has a cap that is in a reasonable area around 80 million or so where it would actually have some teeth, A-Rod never signs that contract.

  6. samsdad says:

    This is a great topic that I have wondered about myself. My team, the Bruins, has only a few people under contract, but if you look at Thornton (6.75), Gonchar (5.5) and Samsonov(3+), you are already at 50 % of a proposed cap. So what is going to happen? Each team with one-two good players, the rest of the team fill ins? Or do you try to build a team of decent, but not top players? And what happens to players who had salary arbritration? How can an arbitrator be awarding amounts, when there is no idea what a cap amount will be… Is Thornton (or any player for that matter) worth 20 % of a teams payroll? Do they really want to win the Cup, or just have a big payday for themselves?

  7. The_Coach says:

    Hey Chris,

    Great comments!!!!

    This is exactly my thought on a solution to the current CBA woes. I can’t for the life of me understand why Bettman won’t consider a luxery tax. Your gradual increase sounds like an excellent idea as a means to ensure that the higher payrolled teams won’t unfairly be penalized right away.

    The players have already proposed this idea plus an immediate 5% decrease on all current salaries and a limit to rookie contracts, I think that they are being fair but like you say, also eventually buying into cap-like conditions.

    If the taxed money that gets divided up amongst the other teams (under the cap) does go to player payroll and team improvment, it should also bring about league parity. So, even if the teams like my Leafs, Rangers and Wings decide that 60 million is well within their budget then at least the smaller-market teams can benefit from their big-brothers and use that extra revenue as a means to ensure that they lock up their own young superstars.

  8. The_Coach says:

    Good point,

    At least then I will really know what players that have grown up in Toronto really have had a life long dream to play for the Leafs and which ones just say that as they collect their millions of dollars more then their previous team was going to pay them!!!

  9. guinsfan4life says:

    Nice idea, Chris. The only part about it I am skeptical about is if it takes 5 years for teams to get under the salary cap, how long would this CBA last before we have to turn around and negotiate a new one?

  10. cgolding says:

    40-80% isn’t chump change, and after year 5 you can actually evaluate it to see if it is working. if it is then hopefully they would re-up it and work it from there, so i would look for the new deal to be a 5 year commitment from both sides to see what happens.

    honestly, i think teams would be getting below the salary cap as quickly as possible in most situations. most of the teams aren’t making and those that are do not make that much. sure some teams like the leafs, detroit, flyers, rangers, etc… have a lot of cash behind them, but in the end these guys aren’t all that interested in losing a lot of cash on their team.

    for example, Ed Snider claims the flyers lost cash this past season… i posted my belief that his claim is the product of creative accounting, but for a moment we’ll believe him. lets say the flyers lost 5 million on the team this past season, with their low 60 million salary. if they were to attempt to keep that salary level together they would be losing 30 million a year in year 5. i would be shocked if they were willing to keep that level of cash output up… and anyone else was willing. no matter how much cash you have behind a team, losing 30 million a year on the team is a steep price to pay when it has been proven that younger and cheaper high-end talent can get the job done…

    plus, for anyone that follows the NFL the salary cap lesson is clear, the league will get younger in the cap world. teams place a premium on young cheap talent, and veterans that hurt the ability to afford an entire team tend to find their way out the door.

    in any event, it is much easier to re-up a deal that has already been agreed to than it is to negotiate a completely new one. i think if the cap is 35-40, not the 30-35 that bettman wants, the players would be more willing to accept it. the players aren’t against a “cap” as much as they like to say they are, they are against a cap that low. you can set a salary “cap” at 70 million that will effect no one, what do the players care? sure it might be an issue down the road with inflation, but the union members care about the here and now… which is why they are willing to limit rookie contracts… they aren’t in the union yet.

    nevermind the bullox,


  11. wingedim says:

    Great comment, and I agree that this would be a viable solution. However, the union is saying that they will not negotiate a salary cap in any form, and in order to have the luxury tax system you need to have a ‘cap’. I know they proposed the tax idea already, and it was shot down by the league, but (I’ve asked this before) how can you have a luxury tax system without a cap? What do you base the tax off of? Does the union realize how stupid they’ve made themselves look by that statement?

    I think that if the league were to negotiate a luxury tax system, the union would reject it only to save face with the ‘no cap’ statement.

  12. Freeze says:

    A $42 million cap seemes more realistic:

    3 players at $.5 million = $1.5 million

    5 players at $1 million = $5 million

    3 players at $1.5 million = $4.5 million

    3 players at $2 million = $6 million

    2 players at $3 million = $6 million

    2 players at $4 million = $8 million

    1 players at $5 million = $5 million

    1 players at $6 million = $6 million

    TOTAL = 20 players at $42 million

    This is just a very rough example, but top players need to make a scaled down top salary. You will always have a couple of those guys.

    I just don’t see how a $30-35 million cap will work. There’s no room for growth to reward the young, cheaper stars that are deserving of higher salaries as they are the ones who put fans in the seats and dollars in the owners’ pockets.

  13. The_Coach says:

    I do like your thinking on this but I do see some problems. I will use Atlanta again as my example and point out that they have two of the NHL’s future superstars in Kovalchuk and Heatley. If you were the Atlanta GM, who would you give the 6 million to?

    I know that your plan is a rough idea of how that cap figure could work but the problem is that there are some teams with an abundance of superstar players or future superstar players and how can you justify paying some higher than others.

    I think that as long as the league is talking cap, we will have to be content with the AHL and junior hockey.

  14. The_Coach says:

    I think that the difference lies in the wording of either a hard or soft cap. With a hard cap such as the owners want, there will be a limit of say 35 million and that will be it, end of story. With a soft cap, which is where the luxury tax falls in, the league will set a number, again say 35 million but the difference is that the owners are free to go over it.

    For the players, the hard cap is obviously not going to happen but with the luxury tax, I think that their feeling might be that there are enough rich teams out there that wouldn’t mind paying the luxury tax to constantly field a cup contender.

    I personally like the luxury tax as it allows owners to spend within their reason to their revenue. One other area that they should explore however is adding a similar rule to what they use in the NBA. Teams should be able to resign their own players to a higher salary than their cap space would allow without penalty. Maybe this way we have greater parity in the league as players would be more inclined to stay with their own teams that would be able to pay them more.

  15. cgolding says:

    the disparity in signing player problem stems from the lack of a major TV contract, which the players don’t seem to grasp. the NBA still has problems with teams not being able to pay their players, but in hockey the big-market teams would still have a huge advantage due to the lack of TV-money coming to the smaller market teams.

    it would be nice if they had the NBA rule, but you will still have an issue i think.

  16. cgolding says:

    throw out the price of previous contracts. they don’t matter.

    if you set a 35 million contract, then player contracts are going to fit under that 35 million cap and it will dictate how high contracts go.

    35 mil is completely workable if you grandfather contracts into the system, and the players contracts would adjust to the new landscape. however, what players used to be making is irrelevant.

  17. Freeze says:

    Compared to the $65-70 million payrolls of teams like the Rangers, Wings, Philly, Dallas (at least over the last couple of years) a $42 million cap is a H-U-G-E cut in team salary. Maybe it’s a jump in salary for teams like Atlanta and Calgary, but aren’t we trying to reach some common ground where the small market teams will be able to better compete with the big market teams without completely destroying the quality of hockey throughout the league? The big market teams will also reap HUGE profits from a setup like this.

    If you can’t compete with a $42 million cap, then maybe that city doesn’t deserve an NHL franchise in the first place.

    A $30-35 million cap won’t make it worthwhile for the Europeans to give up their homelands to play in North America. The quality of hockey will head south, and we will be treated to lumberjack hockey Canadian style. I can see that brand of hockey in the minor leagues today for a lot less money.

    I agree that a cap is needed, but one that makes sense.

    Gary Bettman for Commissioner of the ECHL.

  18. Freeze says:

    The only realistic way to implement this plan is to gradually lower the cap year by year until you reach $42 million. It could be phased in over a few years where we start with a $50 million cap with a luxury tax for team over the max, followed by a $46 million cap with a higher luxury tax, followed by a $42 million HARD CAP – no exceptions. Something like that might work.

  19. cgolding says:

    actually, i believe the league avg. in salaries is like 45 million or something like that… so across the league a 42 million dollar cap is nothing really, that’s ignoring disparity in team revenue that goes toward contracts.

    i’ve actually said more than once that the most interesting by-product of the cap may be that less europeans play hockey in the NHL. the league will remain the best hockey league in the world, and even with a 35 million dollar cap they will be recieving more than they do in europe, so it won’t be quite that dramatic, but players from europe will probably have shorter NHL careers before returning would be my guess.

    but as i said, what players are making right now has ZERO bearing on what they “deserve” in a 35 million dollar cap world. the market for players salaries would be completely different and they would drop to fit under the cap and field teams, just the way it would work.

  20. cgolding says:

    the only cap that is reasonable immediately is a soft cap yes, which is why i don’t understand the owners stance of an immediate hard cap. i assume that is a bargaining position, but only time will tell.

  21. skandelousHABSfan says:

    Let me start by saying that this is a great post, and a very good idea. The one problem i can find is thatif money derived from the luxery tax is given to a team that is under the cap (lets say the team is at $34 million, and is awarded $5 million), it makes it impossible for the team to spend the money on salaries without going over the cap itself (assuming its finances are already in order). this would mean that the team would either spend the money on marketing, other expenses, or more likely, just pocket the money.

    I know that you pointed out how difficult it would be to make sure that the luxury takes that were awarded would be spent on payroll, but from what i can see, it is vertually impossible.

  22. skandelousHABSfan says:

    what i want to know is whether minor league contract will figure into the cap (be it hard or soft). because if they do, then this becomes much mroe complicated. Sure AHLers makes very little money, but when you add up all there saleries it becoems a problem. also, what happens if you call a player up, do you then have to add that to you cap total. the same thing goes for sending a player down, are you then relieved of his salery? it is matters like these that make this topic much more complicated then we are capable of discussing in a casual manner.

  23. SabresAreCool says:

    My take on it….

    $40 Million soft cap….with a luxury tax going up to a maximum hard cap of $60 Million. We all know a 30 mil cap will never work, it is just a starting point for negotioations. Any team having over 40 mil in payroll pays a percentage of what they’ve gone over….this money is then divided amongst the teams that did not go over the cap. The important part with my plan is to have a hard cap so no team could go over 60 mil regardless of a luxury tax; which i think might keep the leafs, detroit, philly and the rangers somewhat in check.

    And you forgot that toronto also has owen nolan, niewy, roberts under contract….as well as some others. there payroll is in the 60 million dollar range already.

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