Ok, so now I’ve decimated the owner’s position and said the players need to yield to keep the sport healthy, what the heck is supposed to happen? It involves the dreaded s-word: “Salary Cap”. If you give the owners everything they want, you end up with the NFL but far less rich and popular. Owners make lots of money every year, players have absolutely zero job security, and only the best players make anything even remotely approaching what the owners are making.

So what kind of salary cap are we talking about? I would advocate a soft salary cap, which means that each team can only spend a certain amount on player salaries, with some exceptions. The NBA has a soft cap, and some of their exceptions make a lot of sense. For instance, teams can go over the cap if they resign their own free agents. I would also advocate another feature of the NBA Collective Bargaining Agreement (CBA), having maximum and minimum salaries that are indexed by the number of years in the league. Bonuses (signing and otherwise) would be prorated over the life of the contract, as the NFL does.

So what about linkage? Well, you would use revenue and expense history to set the inital salary cap, but the cap each year would not be hard linked to expenses- perhaps it could go up by a certain percentage each year unless revenues dropped or something like that. I’m sure this will be a sticky negotiation point, but if there is no definite linkage (hard and fast relationship between league revenues and player payroll) I think the players will deal.

So why no linkage? For one, it’s too easy to hide revenue. When teams are owned by companies that broadcast games or otherwise provide team revenue, through accounting tricks you can make the team (or parent company) almost as rich or as poor as you want. Cablevision has the exclusive local contract the Rangers, and they own the Rangers. Cablevision could pay the Rangers far under market rate for the TV rights, making the Rangers look very troubled financially. Then Cablevision is doing great because they just paid a buck and a half for the TV rights and got millions in advertising revenue that never shows up in the Rangers’ books. I’m sure there are millions of variations on this scheme. The Flyers are owned by Comcast, the biggest cable provider in the country. The Ducks are owned by Disney, who owns ABC and ESPN. Up till now, the owners have not provided all the financial information the players’ union has requested. Hmm, I wonder why that is?

Are players going to make the same salaries under the new system as they did? No, but they don’t expect to anyway- otherwise they would not have proposed a 24% pay cut right off the bat. But with some tweaking of the structure, free agent rules, and salary arbitration, they won’t be struggling to put food on the table (unlike Latrell Sprewell).

Well, I couldn’t stay away, haha. It’s been almost a year since I’ve last posted, and a lot has happened in the hockey world in that time. Some of it surprising, most of it not. My Sharks lost in the playoffs to Calgary, who ended up losing to Tampa Bay in the finals. Vincent Damphousse, Mike Ricci, and Todd Harvey are gone to other teams. There have been no NHL games this season, so I can’t say I’ve been too derelict in my duties. Ok, ok, I’ve been derelict.

Might as well take this opportunity to weight in on the lockout, it seems like everyone else has. I’m going to be in the minority and take the players’ side, at least partially. Players only spend 3-4 years in the league on average, and they are the ones putting their bodies in harm’s way. If anybody should make a disproportionate amount of money, it should be the players. That being said, it’s not the same as agreeing that the system prior to the lockout was working. There do need to be changes made in the financial structure of the league in order for hockey to survive.

For one, there needs to be heavy revenue sharing. Football has it, and it works. Football also has a gigantic TV contact where the NHL does not, but I have confidence that the NHL business minds can come up with something that will level the playing field a bit. To have one team financially able to spend 3, 4, 5 times as much money as other teams is a problem. It ends up producing exactly what we have- some teams spending so much on free agents that the othet teams have to overspend to compete at all.

But, having a hard connection between revenues and payroll is the same as saying they want a mandated profit margin. Sorry folks, that’s not how a business works in a free market. You do well, market well, sell well, put out a good product and manage expenses, you make money. You don’t do well, you have runaway expenses, you lose money. Pay Bobby Holik $100 million dollars (or whatever it was). Sorry, you lose money. Have fun dumping that contract.

More later.