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HOCKEY

THE PERCENTAGE SOLUTION
How is it possible to have "linkage", and "cost certainty",
while continuing to honour contracts?
Mr. Bettman says he doesn't want to end guaranteed contracts,
but it seems like the only way to accomplish his goal.

There is a way to have linkage and cost certainty.
I call it the Percentage Solution.

 - Welcome - > - Wolf Den - > - Hockey  - The Percentage Solution  -
THE PERCENTAGE SOLUTION

Listening to Mr. Bettman talk about cost certainty got me to wondering. How will it work? If you have a player making 8.3 million (Jagr post rollback), how do you fill the rest of your roster to stay under the cap figure?

I realize that his version of cost certainty would take several years to filter through, as the higher priced players retire. But how could you possibly have linkage? Let's just say that this year the salary cap is 42 million. What criteria do we use to assign next year's cap?

What happens to teams that have payroll commitments that take them above that figure. They have players signed to multi-year deals, what do they do? Cut the players? Renege on contracts? They try to make a trade, but no other team will bite, now what? I believe Mr. Bettman doesn't understand the meaning of the word "guesswork", because the system he is touting has more guesswork in it
not less.

The legal ramifications are enormous. To apply a salary cap would necessitate the end of guaranteed contracts, which Mr. Bettman says he is not trying to do. But is there any other way out of this? If so, Mr. Bettman isn't saying. I don't believe him when he says he doesn't want an end to guaranteed contracts.

I batted this idea around in my head a bit last year, and it has come up again, so let me run it by you.

If the league were to go to a linkage system, the only way I can see it working is to award player contracts on percentages rather than absolute dollar figures. If there is to be linkage between revenues and payrolls, then let that linkage be a percentage of revenues, rather than bandying about dollar figures every year.







Regardless of what percentage of revenues is to be used for player payroll, the idea is to award a player a contract based on his percentage of the payroll pie.

Under the expired CBA, a club was permitted to have 90 players on its reserve list.
 "Reserve List" means the list of all players to whom a
Club has rights including all unsigned draft selections, all
players signed to Player Contracts (whether or not currently
playing in the NHL), and all players who have signed Player
Contracts but who have subsequently been returned to Canadian
Major Junior Hockey clubs. A Member Club may have on its Reserve
List, at any one time, not more than 90 players, which shall
include the following:


(a) Not more than 50 players signed to Standard Player's
Contracts and not less than 24 players and 3 goalkeepers under
contract.
Age 18 and age 19 players who were returned to
Canadian Major Junior Hockey clubs, and who have not played 11
games in the NHL in one season, shall be exempt from
inclusion in the 50 player limit.
Any club violating this provision shall
be liable to loss of draft choices as
determined by the Commissioner.


So the reserve list consists of no more than 90 players,
no more than 50 of which are signed to standard player's contracts.

With the playing roster set at 24, (23), that leaves 26 other players signed to contracts, that by definition would have to be classified as minor league contracts.

A minor league contract was set at a minimum of at least $25,000 or the league minimum. So 26 players will be getting somewhere between $25,000 and $100,000 to play in the minors, while being on an NHL team's Reserve list. I don't know exactly how the money works, whether these players actually get any money from the NHL team, or whether their salary comes directly from the AHL. Regardless of those facts, we are concerned with an NHL team's Playing  Roster.
NHL League minimum salary was $150,000.


The current buzz says that the league, fans, somebody, wants the teams to be on equal footing as far as the financial ability to sign players. I keep hearing the word parity, although it seems to mean different things to different people. To the league it seems to mean financial parity.  While I agree that under the current system it is too easy for one owner with more money than sense, to singlehandedly inflate the marketplace, well beyond reason to the point that the smaller teams cannot compete.

The league's solution seems to be to try to squeeze all the teams into the same mold. Financial parity. That's what a salary cap is supposed to do. I don't buy this notion, completely. A salary cap will be circumvented by one team or another before the ink is dry.

Why shouldn't a financially succesful team be able to reinvest some of that gain into player development, moreso than a financially troubled team? Levelling the playing field too much would guarantee Levitt's "treadmill to mediocrity." This urge for "parity" is a result of our politcally correct media age, and has little historical precedent.

What the league should be more concerned about is setting a minimum bar for financial, and consequently on-ice competitiveness. To qualify as the best league, with the best players, the league should set minimum standards. At the same time, there should be some limit to the amount these minimum standards can be exceeded by.

The percentage solution is not intended to guarantee that all teams spend the same amount on payroll. There is enough flexibility in the system to allow the rich teams to spend more. The percentage solution is designed to limit the degree of overspending, and limit the degree to which a single team can inflate the marketplace. It is also designed to prevent teams from coasting, and lowering the marketplace. I am not trying to level the playing field, but merely to define the boundaries of that field.

The system starts with a league TARGET SALARY. This is basically the league targeted total salary, divided by the number of teams.
For the sake of argument and to give us some round numbers to work with, lets say the league expected revenues in the area of 2 billion dollars for a particular season, and the agreement with the PA was for 55% of that figure. My solution would put 50% of the revenues into guaranteed salaries, and the other 5% into a guaranteed bonus pool. (55% total)  We will leave the bonuses out of the picture for the time being, and deal only with the 50% guaranteed salaries. (1 billion dollars) Divide that by 30, and we get a team target salary of 33.33 million dollars.
(A 10% player would be guaranteed 10% of his team's 33.33 million dollars = $3.33million.)

A team would be able to contract out less than 100% of that amount, but only down to a certain "floor limit".
A team would be able to contract out more than 100%, but only up to a certain "ceiling limit".


The top six or eight teams would still be allowed to spend more than the lower teams, but instead of the top team spending more than triple what the bottom team spends, the percentage solution would max this difference out to roughly double. Teams are free to spend pretty much the same percentage of league average as they do now, except for the top few teams, who will have to come down a bit, and the bottom  few, who will have to come up a bit.


The most important element from a fan point of view, is that there would be a ceiling on individual player contracts.
No single player could be guaranteed more than 25% of the per team targeted average salary, and no more than 2 players per team could be over 20%. 

In fact there are some teams that would not be able to afford that kind of money, but that, to a degree is their problem. A look at payrolls and team success shows that more than this kind of spending doesn't guarantee success to begin with. Calgary and Tampa proved that positively last year, and the New York Rangers prove it negatively annually.

The percentage solution prevents one team from flooding the market with money, (hard earned by the fans).
How the percentage solution works.

For this model to work properly, there would have to be a set of minimum circumstances.
  • Performance bonuses are no longer a negotiated part of a player contract, but instead paid out of a 'league-administered' fund, which is collected in a shared-revenue plan, from both the teams, and the players. Each team will have to contribute 5% of its revenues to the bonus fund. (The definition of revenue is the stumbling block). Obviously, the richer teams will be paying more, but then again their players should be expected to gain a larger share of the bonuses.
  • (If the league has to start sharing its revenue more, so will the players.  The players will have a bonus fund tax deducted from their paycheck based on a sliding scale.)
  • An NHL team's player payroll would be set at a certain percentage of revenues. (based on previous year's numbers and market projections) This allotment will be called the "payroll pie."


With twenty four player's on each team's playing roster on opening day, we can calculate each player's piece of the payroll pie.
the average player would get 4.16% of the payroll pie. (100% divided by 24 players)

The Islanders currently have Yashin at about 20-25% of their payroll pie. That leaves them 75-80% of the pie to split between 23 other players.
Contracts are signed based on the percentage of the pie, instead of on an absolute dollar figure. So Alexei Yashin's contract wouldn't be for $10 million dollars per year, it would be written as a 20% share.

A team's payroll could not exceed 100%. (Actually there are instances when it can, but we will discuss those later, when we get into details.)


The beauty of the system is this. A team can only sign so many players to the high percentage shares. As you increase the number of higher paid players at the top of your payroll, you have to reduce the quality of the supporting cast. This check and balance system keeps the high rollers in check.
You can only go so high with an individual player's percentage, before you start to have an adverse affect on the rest of the team.
There aren't that many bonafide 20%ers out there. A player who negotiates a contract over 20%, is like a floor painter who finds himself in a corner surrounded by wet paint.

The league minimum player salary percentage would be .05% (one half of a percent) Based on a 32 million dollar cap, that works out to $160,000 per season.  If Alexei Yashin was under contract for 20%, he would get $6.4 million in a year with a $32 million dollar cap. That would go up to $8.4 million if the cap rose to $42 million per team.

Alexei could probably make ends meet, and perhaps have a little left over to buy some art.

The Edmonton Oilers operated an entertaining hockey team with only one player at just above 10%, the rest falling in below that. They had 9 players above the league average, the remaining players being at or below the league average.

Many teams have a goaltender at somewhere around 10%. The Flames had Iginla at 20.6%, and Turek at 11.67%,  of their $36.4 million dollar payroll last year. The next highest player came in at 6.59%, and the remainder falling below that. The Flames as you recall, were one goal away from the Stanley Cup. The danger is having only two players representing almost a third of your payroll.

The difference here is that Iginla is as close to a bonafide 20%er as you will find in the league, while I wouldn't give Yashin more than 10%.




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THE RANGE OF SALARIES:

So how do we allow the rich teams to spend more than the poorer teams?

First of all we allow teams to exceed 100% by as much as 10%. 110% of target is the Ceiling limit. Using our 33.33 million dollar example, a team has a maximum regular salary of about $36.66 million dollars.

Secondly, we allow teams  a Floor limit of 75%. That would be $25 million dollars using our example.

Already there is an allowed disparity. The top team could spend an amount equal to 146 percent (about 1 1/2 times)  of the bottom team's payroll.
That is nowhere near the current disparity, but it is also not yet enough of a disparity.

Don't forget, we WANT some teams to be able to spend more. Their fans support the team, and they deserve better than the teams without the fan support. But we aren't finished yet.


Instead of calculating total percentage on the 24 man roster, the idea is to give each team a 2 player cushion. These are called the EXCEPTION PLAYERS.

Each team can designate one player as a FRANCHISE player. This player must be a player that the team drafted, or signed out of the developmental system as an undrafted player. To designate a player as a franchise player, the player's salary must be contracted to at least 12.5% of the target salary, but cannot exceed 25% of target.

Each team can designate one player as a MARQUEE player. This player can be any free agent signing or player traded for. A team could use a second drafted player as their Marquee player, but cannot use a traded or free agent player as a Franchise player. To designate a player as a Marquee player, the player's salary must be contracted to at least 12.5% of the target salary,(around $4 million in our example) and cannot exceed 25% of target.($8.33 million from our example) The fact that this just happens to be just slightly less than Jagr's post 24% rollback salary is a fortuitous coincidence.

The salary % of these two EXCEPTION players is not counted against the team's total percentage.
So the total team percentage that varies between 80% and 110% is for 22 of their 24 players. Two players, outside of that calculation can add anywhere from 24 to 50% of Target, on top of those figures.
The maximum that a team could spend would be 110% for their 22 regular players, plus 50% for their EXCEPTION players a total of 160% of target. ($53 million using our example) Granted, there are teams that can afford nowhere near that kind of money, but for the teams who can, great!

The happy thing is that there are limits to the individual salary inflation. Exception players are limited to 25% of target.
Players not designated as Exceptions can still negotiate for up to 20%, but have to remember that every percentage point up for them, is one percentage point less for the rest of the team. This check and balance system should help control runaway inflation, as well as create enough leeway for teams to find a level that suits their own individual revenues.

THE EFFECT OF EXCEPTION PLAYERS ON THE MINIMUM AND MAXIMUM


The minimum that a team could spend would be 75% of target (which includes 0, 1, or 2 exception players)
So if a team had no exception designates then the 75% would be on the full 24 man roster. They could not go below this.
If a team had only one exception designate,  then their regular payroll would be on 23 players, and would have to be at least somewhere from 50 to 62.5%. (plus the 12.5 to 25% for the Exception player) as long as the total was at least 75%.
If the team had 2 exception players, their regular roster of 22 would still not be permitted to go any lower than 50%, so their total roster could not be lower than 75%.

Note that these are the team rosters of no more than 24, and no less than 23 players. A game day roster is 2 goaltenders and 18 skaters. (with 3 or 4 players as healthy scratches, rotated in and out of the lineup for various reasons)

So with a minimum of 75% ($25 million in our example), and a maximum of 160% ($53 million), we could have a disparity where the top team can spend a little more than double the bottom team. Some feel that is too wide. I say pish! These are businesses, and businesses should be allowed to compete. There should be incentive to improve your bottom line to allow your business to excel.

The interesting effect of the Exception player rule is that it allows for a maximum of 60 exception players in the league at any given time. (2 per team). Owners and managers would have to choose their exceptions wisely.

THE SYSTEM AS APPLIED TO LAST YEAR'S NUMBERS (MINUS THE OFFERED 24% ROLLBACK)

This system, applied to a post-rollback (-24%) of last year's salaries shows that Detroit and the Rangers would still have to shed some payroll, ($5.8 and $5.2 million respectively).
Columbus, Chicago, Edmonton, Atlanta, Minnesota, Pittsburgh, Florida, and Nashville would have to add payroll to their post 24% rollback numbers.  Of those teams, only Nashville would have to go higher that their pre-rollback number.  Columbus was at 32.1 pre-rollback, so in effect they would really be able to shed as much as $7.1 million. While Nashville would have to come up with an extra $1.8 million over last year's payroll. Cash strapped Pittsburgh paid $26 million last year. Post rollback brings them down to around $20 million, but they would still be able to pay less than last year and fit within my solution.

The remaining 20 teams would already be in the ballpark using the post 24% rollback numbers.


The system isn't breaking the bank. It is providing a degree of cost certainty, decreasing the overall disparity, while still allowing for healthy competition.


BONUSES ADMINISTERED BY THE LEAGUE

My own personal preference in the matter would be for guaranteed player salaries to be at around 45% of projected revenues. (31,200,000 per team based on last year's numbers)

An additional 5% of projected revenues would go directly into the league bonus fund, making the total league guaranteed player payroll at 50% of projected revenue. This money is guaranteed to the players, although it isn't guaranteed to ALL the players, just those who earn it.

There are circumstances that would allow for players to earn more than 50% of revenues, but these are based on league profitability, and player performance.

The players would have a bonus fund tax deducted from their paycheck, on a sliding percentage. (based on their own negotiated percentage of payroll.)
The high percent players would pay more, but then again, they would be expected to collect more bonus as well. A 20% player might pay 5% of his paycheck into the bonus fund, while a 1% player might only pay 2%.

I say that this is my own preference, but you know that the PA will want at least 55% guaranteed. We might end up with 50% in guaranteed base salaries, and another 5% in guaranteed bonuses. There should be a provision for more to be added to the bonus pool in fat years.



END OF SEASON ADJUSTMENTS

At the end of each regular season, the financial picture is analysed , and revenues, profit and loss, etc. come under the microscope.

If actual revenues exceed projected revenues, then players are entitled to their share of the excess, providing that the league is profitable. If actual revenues fall below projected revenues, then one of two things has occurred. Either the product on the ice was not up to par, and didn't attract enough fans, or the bean-counters missed their projections, and need to buy a new dart board.

 Obviously all revenues and expenses are subject to both league, player's association, and third party audit.

PROFITS


If the actual revenues exceeded projected revenues, AND, the league was profitable, then both parties would share in the windfall.
Players would receive up to 60% of projected revenues, or 55% of actual revenues, whichever is the higher amount, as long as that amount still allows for owner profit.
The player's portion of any additional money would be divided into several funds for disbursal.

In the event that actual revenues fall below projected revenues, yet
the league was still modestly profitable as a whole, despite the shortfall in revenue, then no changes would be made. The players would still receive their 50% plus 5% bonus, and no more. (The amount already received is in excess of the actual CBA figures, although more diligence is required in assessing next year's projections.)

Profit is shared amongst owners based on each team's percentage contribution to revenues. The high revenue teams get a greater share of the profit, as they raised a greater share of the capital.



NET LOSSES

If the league loses money while earning less than projected revenues, a shortfall provision would be enacted. (deferred salary account adjustment)
The logic being that part of the reason for less than projected revenues being a result of a poor product on the ice.

If the league loses money while earning more than projected revenues,  a different shortfall provision would be enacted. (players retain deferred accounts, but receive no more than their 50 + 5%) The logic behind this is that the players put in a good season, and boosted revenues, but somehow the owners managed to piss it away.



PLAYER'S PAYCHECKS AND DEFERRED ACCOUNTS

Player's would receive their regular paychecks, with the following stipulations.
  • Players are paid based on the number of games they are on the player roster. ie. total payroll per projection divided by the number of games per season - times the player's percentage of total payroll = player's pay per game.
  • Player receives 90% of his pay per game in a regular paycheck.
  • The other 10% of the pay-per-game money goes into a PA administered deferred account, which gathers interest until the end of the regular season. This deferred money serves two purposes. In the event of net league losses at the end of the season, some or all of this money(but no more than this) can be used to settle the shortfall provision. If, on the other hand, the league is profitable, (or only a portion of the deferred account is needed to settle shortfall) this deferred money will act as regular paychecks during the off-season.
  • The standard deductions apply, as well as the player's bonus fund tax, union dues etc.



POTENTIAL CONFLICTS

INJURIES
How does this work with injuries?
When a team has a player on the injury reserve list, they usually call up a player from the minors to fill in.
The injured player's percentage is not counted against the total, but the called up replacement is counted.
In cases such as this, there would be exceptions to the 75% minimum, for the duration of the injury.

If a player were to have a season ending injury, I believe that insurance kicks in for a portion of the salary. Article 23 of the expired CBA is not completely clear on that point. It does discuss career ending injuries, but is less clear on season ending injuries. Article 16.10 talks about the injury reserve list and replacement player rules, but does not mention payment to the injured player.

Regardless of who is on the hook for the salary, the injured player's salary would not be included in the percentage calculations,as long as he is on the injured reserve list.

POST TRADE DEADLINE / END OF SEASON ROSTERS

After the trade deadline, teams are allowed to call up as many players on its reserved player's list as it deems necessary to complete the season.  These players are often from the AHL, and the NHL portions of their contracts are not a very high percentage to begin with, however some teams make huge trade deadline acquisitions to help in their playoff run.
The period from trade deadline to season's end is about 3 weeks, and work out to about 10 games each team. (1/8 of the schedule)
Teams would be permitted to exceed target by an extra 5% to their regular payroll during this period. (up to 115%)
In addition they could add one TEMPORARY Marquee player for the duration of the season and the playoffs.(at 25% max bringing the total of Exception players to 75%)
So for the last 10 or so games a team could be operating at 1.9 times the target salary, which seems like an awful lot.
When you work out the maximums at 1.6 times target for 72 games and 1.9 times target for the last 10 games it comes out to a maximum annual payroll of 1.6366 times target for the regular season. The addition of the post deadline payroll has a negligible effect on the totals.

The caveat here is that teams would have to manage their regular payroll carefully so they would have room to add at the end of the season. If a team wanted to add a 10% player, they would have to already have 5% room available, plus the 5% end of season allowance. At team running at 110% before the deadline is asking for trouble, because they won't be able to add anything other than a temporary Marquee without first subtracting.

They could move one of their regular players up to temporary Marquee status, as long as that player was already making the minimum Marquee salary of 12.5%. That would free up some room on the regular payroll.
You would not be allowed however, to make a temporary Marquee promotion unless your payroll demanded it. (This is not to be used as a loophole for abuse of the system.)






REVENUE SHARING IDEAS RELATED TO THE PERCENTAGE PAYROLL SYSTEM

PAYING INTO THE SHARING POOL
Of course at season's end, there would be a revenue sharing/performance adjustment calculation made.
Teams would be rated according to overall payroll percentage, and pay into a pool accordingly.
The benchmark is 3.3% (1/30th) of league payroll. A team at the benchmark in payroll would contribute an amount equal to 10% of their total  salary to the sharing pool. A team over the benchmark would pay more than 10%, a team under the benchmark would pay less.

We can use last year's numbers to show the effects of this sharing pool, but we must remember that last year there were teams above and below the limits allowed by the percentage system, so the top numbers are inflated and the bottom numbers are deflated. Under the percentage solution it would be unusual for a team to get higher than 5.5% of league payroll as opposed to last year's Red Wings at 5.9%, and no teams would be able to go as low as Nashville's 1.7%, the minimum being in the neighbourhood of 2.5%.


Detroit at 77.8 million paid 5.9% of the league total, so would have to pay into the pool...
(5.9 divided by 3.3)x (10% of 77.8 million)
= 1.77 x 7.78
= 13.772 million dollars into the sharing pool.


Islanders (closest to league average) at 43.8 million paid 3.32% of league total so would pay into the pool....
(3.32 / 3.3) x (10% of 43.8 million)
= .997 x 4.38
= 4.365 million

Nashville at  23.2 million paid  1.76% of the league total,so would pay into the pool...
(1.76/3.3) x (10% of 23.2 million)
= .528 x 2.32
= 1.225 million

The total amount of money in the pool using last year's numbers would be $147,611,308.30
This represents about 11.2% of the total league payroll, of $1,318,500,000.





COLLECTING OUT OF THE SHARING POOL

The pool would then be divided by each team's percentage of standings points.
The total of all teams standing points last season was 2605 points.
We take each team's points divided by the total to get their percentage share of the league points.

Last season Detroit finished with 109 points, which was 4.2% of the league total. They would take 4.2 % of the pool, about $6.17million.
Subtracting that amount from their contribution, they would have a net Salary sharing loss of about $7.59 million.

Before you freak out, remember these are last years numbers, pre-rollback, pre-percentage solution.
What I am illustrating here is the concept of revenue sharing based on contributing a percentage of salary paid and collecting a percentage of results achieved.

The Islanders would at 91 points, take out a 3.49% share amounting to about $5.15million for a net gain of $791,000.

Nashville at 91 points would take out the same amount as the Islanders, but because they paid less in salary, they have a higher net gain, $3.9 million.

Tampa naturally had a high net gain as well with low salary and high finish. $3.45 million.

Teams with a high payroll and a low finish would be the big losers in this pool. The incentive should be for teams to spend their fan's money wisely.
The Rangers naturally would have faired the worst in this department. Losing $9.5 million in the pool. On top of their $77 million dollar salary, they would have spent more than $86 million on payroll plus sharing. This is insanity. Now you know why Bettman can't sell revenue sharing. (the percentage system will address this)

The difference between the Red Wings and the Rangers is the fact that Detroit would more than recoup that money in the playoffs, while the Rangers would have to lick their wounds.
Six of the 10 teams that would have lost money in this type of pool, were playoff teams.
The Rangers, Anaheim, L.A., and Washington have to go back to the drawing board.
Fortunately they have the draft to help them.


APPLYING THE SHARING CONCEPT TO OUR POST ROLLBACK, POST PERCENTAGE SOLUTION NUMBERS

If you used last year's numbers and then subtracted the 24% rollback you would get a payroll of about $1,002,060,000.
Using that as your target total salary, the target team salary would be $33.4 million.

In our examples from the introduction I used 33.3 million as the team target, or $1 billion total. (So we are in the ballpark so to speak)
I multiplied this target by the percentages of total that most teams spent last year,
with the exception of Detroit and New York which had to be dropped to the upper limit, from 5.9% to 5.33% (1.6 times average)
and the bottom 8 teams which had to be adjusted (slightly) up to the lower limit.(.75 times average)

The end result was that the total league payroll ended up being 1.8% above target ($1.018 billion)
Now we know that the team's points may not have worked out the same with these slight modifications, but they are close enough to run through the smoke house.

When applying our new slightly modified percentages of payroll to the contributions we would end up with total contributions of $112.3 million, again about 11% of the league payroll.

Leaner meaner Detroit would have only had to pay $8.5 million into the pot, and their 4.2% points share would have been worth $4.7 million, their net contribution to payroll sharing would have been $3.833 million. Add that to their league high payroll of $53.3 million and you get $57.166 million. (about 2 million less than the 24% rollback)

The Islanders new net gain in payroll sharing would be $614,000 compared to the $791, 000 pre percentage solution.

Nashville, forced by the constraints of the percentage system to up their payroll to the minimum 75% of target (.75 x 33.33 = $25million)
would have had to pay $1.875 million into the sharing pool, and their 3.49 percent share of points would allow them to collect $3.924 million for a net payroll sharing gain of $2.049 million. Subtract that from their payroll of $25 million, and it would have cost them $22.951 million dollars in payroll, which is still less than the $23.2 million spent last season. We are spending less total on salaries, yet ensuring a minimum level of competition, by increasing the minimum percentage for participation, and yet, the small market teams are coming out ahead. Teams are allowed to spend roughly what they were spending before, but within limits that allow for financial advantage, and yet cost certainty. The net league loss of $96 million as reported by Forbes, is turned into a gain of $203 million, just by applying this system. The 17 teams reported to be losing money last year was reduced to seven by using this system. (3 because of bad player deals and excessive spending, one because of a bad arena deal that is soon to be rectified, one team that was nearly bankrupt and folded but is on the road to recovery, and one that needs to reach out to its community and grow a fan base, and one team for a combination of the above reasons.)None of the 4 most recently added teams is found in this list, so you opponents of expansion can back off slightly.

Tampa again was the big winner, coming out at a net payroll sharing gain of $2.634 million, which would reduce their net payroll from $25.4 million to $22.7 million. (Last year they paid $33.5 million in pre percentage solution salary.)

The Rangers would still have lost out large, but not as large as before. $53.33 million payroll, plus $5.558 million sharing contribution works out to $58.891 million dollars spent on net payroll to get an early start on golf season.  Last year's salary minus the 24% rollback would have been $58.5million. Again, we are in the ballpark.

Again, the target league salary was within 2 million dollars of the 24% rollback number.
Using the percentage solution, we ended up spending just 1.8% above target. Cost certainty.
A minimum level of competition was ensured by the minimums, yet the 8 small market teams who had their payroll percentages adjusted upward were still better off than last season.
Of the remaining teams, all but the two top teams were still allowed to pay salaries in roughly the same proportion as before, and those top two teams are still the top two teams.
No owner can singlehandedly inflate the marketplace.
No owner can cheat the fans by deliberately putting a substandard product on the ice.
The stability will enable all involved to concentrate on that product, and its continued quality.
The stability and goodwill will attract sponsors, and broadcasters, and just possibly act as an example of how people can work and grow  together, which is what small town hockey has been doing all along, and which is why hockey parents get up at five in the morning.
This isn't rocket science, its a game!

Ok, now what's in it for the players? How does this help them going forward?

Using these post rollback target numbers, we have to hammer out a consistent definition of revenue, that is transparent, and not subject to chicanery on the part of the owners. This will not only help the player's trust, but might go a long way to repairing fan trust.
Once we have this carved in stone definition, we simply take our target salary, and divide it by our defined revenue figure. There is our target index. We negotiate some minimum and maximum parameters for the index, to allow for economic factors that directly affect our source of revenue, hello! remember us?
Don't forget, you guys are arguing over OUR MONEY!

Individual players will still have salary increases as they mature through the system replacing retiring stars. A player's 4 year contract might be negotiated at say 6% in year one, 6.5% in year two, 7% in year three, and 7.5% in year four. The actual dollar amounts would vary according to economic conditions and the popularity of the team and the league, but the negotiated % raises would stand.

Players would benefit from the fact that one of their own cannot put the other jobs at risk by accepting a contract from a foolish owner that endangers the viablility of a franchise, and the stability of the league as a whole.

Players would benefit from increased league stability, and the possibility, within this framework to eventually expand to two more markets that would bring the league to 32 teams which is a perfect number for scheduling purposes to allow for balanced schedules, meaningful divisional standings, and a slightly reduced schedule, that would also lower travel costs in the high fuel economy. These need not be completely new markets, but perhaps former markets that previous conditions made difficult. Hello Winnipeg? Quebec? Hartford?


Excuse me Mr. Bettman, is that anywhere near cost certainty?
I will attempt to phrase the following paragraph in Bettmanese.

What we have here is a framework for cost certainty that reduces and limits the overall disparity, yet still allows the richer teams to exploit their financial advantages, and present a product that their fans, the greatest fans in the world, have grown accustomed to.
The poorer teams will have a minimum qualification amount that will ensure that the players and fans in these cities aren't getting left behind. The level of competitiveness will be enhanced, resulting in even greater fan support.

We believe that this is a basis, going forward, for a three way partnership between the owners, the players, and the fans of
The National Hockey League - Still, the fastest game!




Combining this percentage system with the league bonus fund system would result in the following.....

  • Owners would know what percentage of revenues were going to player salaries, year in year out.
  • Owner's would know what percentage of revenues would be assigned to the league bonus fund, year in year out.
  • Players would know that they are not playing for a certain amount of money, but rather a percentage of revenues.
  • There are upward limits to player compensation, because you can't go too high with a player's percentage without impacting the quality of the supporting cast. If you were to give a player 50% of your payroll, that would leave you only 50% to sign the other 23 players. Considering that the average player in the league is paid about 4% of payroll, that would leave you with 23 players making half of average, a situation that will ruin a team. Contrary to what is often bandied about by player agents at contract time, hockey is a TEAM game, and the percentage system of compensation reinforces that concept.
  • It would be in the players best interests to maximize revenues by attracting fans league-wide, therefore putting in a good effort game in game out.
  • With a revenue sharing component installed, owners would know that it would be in their best interests to maximize revenues by making sure there was a good product on the ice, league-wide.
  • Players would know that their bonuses are not from their contract, but based on a league wide, league awarded fund. It is in their best interests to play well. There are team bonuses as well as individual bonuses, so that team play is still important. Only a few of the bonus categories would be strictly a result of individual play, (goals , ice-time) most of the categories require team play, (+/-, assists, etc)
  • Fan support, souvenir purchases etc. are stronger with a better on-ice products, better TV deals, etc. The game itself might improve.





Somehow I wonder if the fans would get the shaft here. That is why we need a strong fans' association. Join the NHLFA today,

I really need to get the numbers on royalties of souvenir sales. I believe this is the key to breaking this issue open.
How much money is there in royalties? Are there breakdowns in the royalties showing which team logos are selling more than others?
How much money is there in NHLPA licensed products? Where does the NHLPA royalty money go?
How are these royalties divided up? How is the money used?


- Welcome - > - Wolf Den - > - Hockey  - The Percentage Solution  -
JOIN THE NHLFA
(NATIONAL HOCKEY LEAGUE FANS' ASSOCIATION)


Membership is free!!!

Membership is currently over 26,000 fans.

The NHLFA executive has already met with Gary Bettman,
and is constantly putting the concerns of the membership
in front of both the league and the player's association.

(Boone and Jim Spendlove, who together started the NHLFA in April 1998,
met with Bettman in late April, 99, seeking a voice in the so-called "Fan Exhibition"
at the 2000 NHL All-Star game scheduled for Toronto.
Bettman issued a challenge, said Boone - get your membership up to 75,000 and you're in. )


We need 50,000 more concerned hockey fans to be given a respected voice.

- NHLFA WEBSITE -
- NHLFA MEMBERSHIP -
spread the word   -

The NHLFA has also reached an agreement with NHL ENTERPRISES, L.P.
granting the NHLFA a license to use the name and initials of the 'National Hockey League'
as part of the NHLFA's name and initials.


Add your voice and your vote to the issues that matter to you as a hockey fan.
Join the NHLFA today, and tell 3 friends.


Member polls and discussion forum on various topics including
  • The Collective Bargaining Agreement
  • Proposed and/or desired rule changes
  • Ticket pricing
  • Annual player awards
  • Fighting and intent to injure incidents
  • Length of the season and playoff format
  • Broadcasting and marketing of the game
  • Refereeing
  • Small market teams
 
The fan polls allow the NHLFA to present the views of the membership to the league and players. You may not agree with the majority on certain issues, but by using the forums, you can present your views and reasons for having those views. Your input can be instrumental and may prove to be vital in helping to improve the game at the NHL level, so that we the fans can enjoy it.

If you are upset at all about the current state of affairs, but you do not add your voice, how will things ever change?




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