Jim Bob
January 29th, 2004, 8:54:16 AM
Here is an interesting idea from Bruce Dowbiggin's new book Money Players:
p 270
A three-phase scheme has been proposed by Andy Bernstein in the magazine SportsBusiness Journal. Instead of establishing a hard formula to share revenues more equitably, Berstein proposes assessing teams on the potential of their market and using the assessment to ensure both a payroll ceiling and a floor for every club. This market assessment would depend on population, media saturation, corporate support, and currency. A large market such as Detroit (a Stanley Cup contender) or Chicago (which hasn't won a cup since 1961 and consistently underachieves) would still be assessed at the top end of the scale; Edmonton, Nashville, and Ottawa would be on the receiving end of the transfers. This market assessment would remove the need for assessing team revenues for the purpose of a salary cap - a contentious issue between owners and players.
Those smaller-market teams would be forced to spend the money they receive on raising their payroll. Under Berstein's plan, all team payrolls would have to be within, say, 10 percent of the average NHL payroll. If the average payroll were $40 million, for example, all teams would have to have payrolls between $36 to 44 million. Any team coming up short or exceeding the top end would pay a graduated tax to the NHL. As league revenues increase, the average payroll could be increased. Berstein argues that this scheme would allow for market forces to act on free agents while still keeping some restraint on salaries.
To entice players to accept the proposed structure, Berstein suggests that all players become free agents after their first contract expires. Teams seeking to keep their stars after the first contract would be allowed to offer 15 percent more than any competing offer from another team. Teams could access money from the market assessments to offer the extra money to keep their stars. This "loyalty" concept is one that's thought to be favoured by Bettman.
It is an interesting plan.
And for those that believe making players UFAs after their first contract will bloat salaries, that is a line of thought that is disputed throughout the book.
The theory stated throughout the book is that the 31 yo limit in the current CBA actually helps the players drive up contracts because it limits the number of players on the market at any given time.
Basically, it's the law of supply and demand. The high age for UFA, and the limited number of UFAs each offseason, creates a scarcity in the market and thus drives up prices.
The theory goes that if there were a lot more UFAs to choose from, that the added supply would help depress contracts.
They also apply this theory to the Entry Draft and suggest that rookie costs would come down if the draft were cut back to 1 or 2 rounds, or perhaps even eliminated all together.
If anyone is interested in the CBA stuff, I'd highly suggest getting the book.
p 270
A three-phase scheme has been proposed by Andy Bernstein in the magazine SportsBusiness Journal. Instead of establishing a hard formula to share revenues more equitably, Berstein proposes assessing teams on the potential of their market and using the assessment to ensure both a payroll ceiling and a floor for every club. This market assessment would depend on population, media saturation, corporate support, and currency. A large market such as Detroit (a Stanley Cup contender) or Chicago (which hasn't won a cup since 1961 and consistently underachieves) would still be assessed at the top end of the scale; Edmonton, Nashville, and Ottawa would be on the receiving end of the transfers. This market assessment would remove the need for assessing team revenues for the purpose of a salary cap - a contentious issue between owners and players.
Those smaller-market teams would be forced to spend the money they receive on raising their payroll. Under Berstein's plan, all team payrolls would have to be within, say, 10 percent of the average NHL payroll. If the average payroll were $40 million, for example, all teams would have to have payrolls between $36 to 44 million. Any team coming up short or exceeding the top end would pay a graduated tax to the NHL. As league revenues increase, the average payroll could be increased. Berstein argues that this scheme would allow for market forces to act on free agents while still keeping some restraint on salaries.
To entice players to accept the proposed structure, Berstein suggests that all players become free agents after their first contract expires. Teams seeking to keep their stars after the first contract would be allowed to offer 15 percent more than any competing offer from another team. Teams could access money from the market assessments to offer the extra money to keep their stars. This "loyalty" concept is one that's thought to be favoured by Bettman.
It is an interesting plan.
And for those that believe making players UFAs after their first contract will bloat salaries, that is a line of thought that is disputed throughout the book.
The theory stated throughout the book is that the 31 yo limit in the current CBA actually helps the players drive up contracts because it limits the number of players on the market at any given time.
Basically, it's the law of supply and demand. The high age for UFA, and the limited number of UFAs each offseason, creates a scarcity in the market and thus drives up prices.
The theory goes that if there were a lot more UFAs to choose from, that the added supply would help depress contracts.
They also apply this theory to the Entry Draft and suggest that rookie costs would come down if the draft were cut back to 1 or 2 rounds, or perhaps even eliminated all together.
If anyone is interested in the CBA stuff, I'd highly suggest getting the book.