Salary cap an unfair system
The Brad Richards deal and its possible repercussions throughout the league reveals the detrimental side of the salary cap system for all to see. Welcome, ladies and gentlemen, to the New NHL.
Insert bill face side up to continue.
There is a key flaw in the salary cap system currently employed by the NHL. It makes the league’s 30 seperate corporations one entity for the purpose of artificially limiting player salaries. The problem is, players don’t work for the league, they work for their individual teams.
Why should players in markets like Toronto, Detroit or Philidelphia, who help earn the club owners large profits, get a smaller percentage of their club’s take because the league insists on rapidly expanding into false markets that can’t support an NHL franchise? These teams drag down the average per-team revenue and thus, drag down the cap.
That’s like asking workers at a profitable General Motors plant in Oshawa or Detroit to take a huge paycut because a Ford plant in Carolina is losing money. We’d laugh at the idea. But for some reason, it’s alright to do it in sports.
The NHL says no more than 55 per cent of league revenues will go toward player salaries. Fine. Sounds fair, doesn’t it? That must mean revenues are similar throughout the league, right?
But hang on a minute, the Maple Leafs, for example, earned more than double the revenue (and profit) of the Ottawa Senators last season. Under the cap system, Leaf players are earning a far smaller percentage of revenue than their Ottawa counterparts. Assuming little or no change in sales from last season and a $39 million payroll this season, the Leafs spent less than 40 per cent of their revenue on player salaries.
What happened to the 55 per cent Gary Bettman promised?
As an intersting side note, last season the Leafs and Sens spent exactly the same percentage of their revenue on player salaries, down to a tenth of a percentage point (around 60 per cent). In other words, they both spent what their market could bear.
The Leafs still made at least $14 million in profit, according to Forbes Magazine. The Sens lost $2 million.
Under the salary cap system, profit earned by the Maple Leafs will more than double. That’s a fact. A similar situation is likely in other large market areas like those mentioned above, though I don’t know their numbers. So much for doing this for small market teams.
The cap wasn’t installed to help the on-ice competative balance as some would have us believe — the owners would hardly have scrapped a year for that. It was done to ensure profit margins. And maybe, as a side benefit, it might help keep smaller market teams afloat.
It’s interesting to note the money spent by some small market teams did not change under the cap system. The Sens payroll was just below the $39 million cap last season as well. In other words, nothing’s changed in Ottawa — except for the fact they’ll likely lose one of Redden or Chara to free agency years earlier than they would’ve under the old system and won’t have a realistic chance at keeping both of them because of an artificial cap.
Granted going forward, player salaries have been reduced some — thanks to the Players’ Association’s 24 per cent rollback offer — but as we now see with Gaborik and Richards, it’s still going to cost a lot of dough to sign the top players. Would Richards have got this contract under the old system when he’d be four years away from free agency? I doubt it. He’d have no leverage except holding out.
Ask Alexei Yashin how that worked out for him (sorry to keep picking on Ottawa, but I am a Leafs fan).
Don’t get me wrong, the cap does have good points. I just don’t see why players should be punished for the idiocy of some GMs in the league. If the Rangers want to throw away $9 million on Holik, so be it. It leaves players with actual talent available for everyone else.
If Nashville or Carolina or whoever can’t keep up with player salaries, what are they doing in a business thay can’t compete in? Would you start a automobile manufacturing business in Oshawa to try and compete with General Motors? Of course not, you’d be a fool to do so. Why then is it being done in the NHL?
The point is, the cap isn’t going to help keep individual player costs down. It simply limits the number of quality players a team can employ and gives the owners an excuse to more money in their pockets.
Can’t you just see Richard Peddie or Larry Tannenbaum talking to the media in a month or so?
“Well, we’d love to get (insert big name FA here) but we just can’t do it under the cap.”
(An aside to his fellow owners) “So instead, we’ll just have to put more of the fans’ money in our own pockets. Shitty deal, eh? HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA ! Merry Christmas to me…”
Thanks so much Mr. Bettman.
If the owners were so concerened with competative balance, why wouldn’t they establish a more comprehensive revenue-sharing scheme for the good of the league? This would leave individual companies to determine their own salary structures in accordance with their individual revenue and players would earn their fair share.
Ah, but of course, the owners would never accept a profit cap.