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Columnist believes players will ask for luxury tax, revenue sharing

Aug 13, 2012, 5:38 PM EDT

Donald Fehr AP

NHLPA head Donald Fehr hinted at the players’ upcoming counter-proposal today, prompting others to speculate regarding what exactly that “alternate view” might be.

Sportsnet’s Michael Grange believes that Fehr and the NHLPA will propose a modified system that might include a luxury tax and revenue sharing.

Rather than an artificial drag on salaries by way of a hard cap, how about a voluntary tax — a luxury tax — on teams that see fit to invest in talent?

How about an NHL where, rather than weaker markets being propped up squeezing down the cost of labour, franchises that have unique advantages share some of their profits with those that don’t?

It’s 180 degrees from what the owners have come to enjoy and the “status quo but better” deal they’re seeking now.

If Fehr goes with this strategy, it could echo the thoughts of an insider who believes that the greatest conflict of this round of negotiations actually pits big market and smaller market owners against each other.

Having a higher ceiling for the “rich” teams while simultaneously pumping more money into the smaller markets would theoretically make the pool of money deeper.

Which would be music to the players’ ears.

We – or at least the owners – will find out if that is indeed the NHLPA’s stance on Tuesday.

(H/T to Kukla’s Korner.)

  1. phillyphever - Aug 13, 2012 at 5:49 PM

    No, please no. Keep the hard cap. I don’t want to see Homer overpaying for anyone.

  2. atwatercrushesokoye - Aug 13, 2012 at 6:03 PM

    The problem with the hard cap is the hard floor, this forces teams to spend amounts that they might not be able to spend. Just put the tax at a $1 for $1 level and you’ll likely get the salary cap you desire but it will also allow teams to not spend to where they’re losing money because of it…like Minnesota before this offseason, at least according to their owner.

    • greatminnesotasportsmind - Aug 13, 2012 at 7:32 PM

      It’s not that hard to figure out. Keep the hard cap and lower the floor cap. Make the floor 75% of the cap.

      • atwatercrushesokoye - Aug 13, 2012 at 7:59 PM

        Is the floor not already 75% of the cap? The cap this year is supposed to be $70 million and I believe the floor is $52.5 million which works out to 75%. In 2005-06 the salary cap was $39 million with the cap floor at $29.25 million, so it’s gone up more than $23 million in 7 years, outside of the top few teams how many others have seen their team revenue grow enough to sustain that?

        If they were to bring in a luxury tax then teams would be allowed to spend what they can justify economically.

  3. muir6 - Aug 13, 2012 at 6:19 PM

    Donald Feher two worse words in sports.

  4. xaf605 - Aug 13, 2012 at 6:26 PM

    No hockey this year!

  5. buffalomafia - Aug 13, 2012 at 6:52 PM

    Here comes a lock out?!

  6. ricepilof - Aug 13, 2012 at 6:59 PM

    sounds like the ones who are going to suffer the most from the nhlpa plan is the fans paying for game tickets. $85 for a nosebleed top row in balcony seat is ridiculous and sickening! All so the players can make more money. greedy bastards

    • chiadam - Aug 13, 2012 at 7:03 PM

      Idiotic. The players don’t set ticket prices, they don’t decide how much they earn, and they don’t lock themselves out. Form an educated opinion that consists of more than the tired, Joe Meatball “greedy athletes ” crap.

      • comeonnowguys - Aug 13, 2012 at 9:56 PM

        As opposed to the “greedy owners” crap you’ve been holding up yourself?

      • madman69 - Aug 14, 2012 at 8:20 AM

        idiotic? You’re right; the players don’t decide the ticket prices…the player angents do. The higher the price the agent wants for Parise and Suter the more they’ll get. You try to find logic where Parise, Richards and Suter all make more than a player like Datsyuk or Toews. The agents drive the price up so that the owners need to find a way to stay competitive. use simple logic, moron.

      • Bobcat IRL - Aug 14, 2012 at 11:43 AM

        People think that if salaries drop, so will ticket prices. It’s the other way around. Salaries are as high as they are because of high ticket prices. High ticket prices are a result of high demand and low supply.

        Does anyone honestly think that if salaries were halved that the teams would willingly lower their ticket prices from what they are already selling at? Would you sell something for half the price people are willing to pay? The only people who would benefit from artificially lower ticket prices are scalpers.

    • greatminnesotasportsmind - Aug 13, 2012 at 7:45 PM

      I don’t know about your team, but all 82 Wild games were televised in HD last year.

      Go buy yourself a nice one and save your $85 for a nose bleed seat, $9.50 for a cold one, $20 for parking, $3 for a game program, 2 hot dogs at $4.50 a piece, and gas money and your probably half way there. Besides watching a game in HD is 100 times better than watching players that look like midgets sitting in an extra uncomfortable seat, while missing half of the 2nd period while taking a piss and getting back splash all over your pants after standing in line for 20 minutes. Then standing in line for another 20 minutes trying to get your $9.50 beer and $4.50 hot dog. Then there is the waste of driving in rush hour to get to the game in a snow storm leaving your house 2 hours early and missing the first half of the 1st period. Then another hour of sitting in a log jam trying to leave the arena and sitting in traffic there.

      Your better off getting a HD TV, where you can drink half a case of beer for $9.50, have your naggy wife cook you a nice meal, take a piss during the 3 commercials that play at the 6, 10, or 14 minute mark of each period, while eatting nachos that you made in between periods, and when your done, instead of sitting in traffic you can use that extra time you save by getting laid or watching a good porn movie in HD on your new TV.

      • barkar942 - Aug 13, 2012 at 11:11 PM

        Great ideas! The only thing you forgot is to DVR each game. This way, you can spend a few minutes with the kids and naggy wife, help her put the kids to bed, then watch the game skipping all of the pre-game junk you don’t want to hear, zip through all of the commercials, zip through the fourteen minutes of commercials during intermission and whatever other fillers they have, always be able to pause the game when naggy wife comes over and starts talking to you about what she should wear tomorrow and that you need to take the smelly kitchen garbage out that she asked you to do two hours ago, and then sit down and pick up exactly where you left off! Then, you can still get to the last couple of things you mentioned at the end, unless the naggy wife is still worried about what to wear to work tomorrow.

      • greatminnesotasportsmind - Aug 14, 2012 at 12:12 AM

        So true

      • withseidelinn - Aug 14, 2012 at 3:13 PM

        Hahahah probably the best comment on this site yet.

  7. sampulls - Aug 13, 2012 at 7:52 PM

    Lol

  8. ricepilof - Aug 13, 2012 at 9:37 PM

    great post Minnesota guy! you forgot about pregame pitchers at the local bars. gotta get hammered or a nice buzz going on before you walk into the arena. or you could just attend an islanders game and sit in great seats for 50 a piece. Coyotes games are insanely cheap too. hd hockey is a good alternative but having some good seats to a game and getting drunk while doing so is my heaven

  9. dannythebisforbeast - Aug 13, 2012 at 10:27 PM

    Flyers are owned by Comcast. They will spend whatever they want and just put it in our cable bills every month

  10. savior72 - Aug 14, 2012 at 12:01 AM

    Don’t forget about having to buy your kid some overpriced thingamajig at the area store he sees. Plus missing even more of the game because he has to pee every 10 minutes!

  11. kitshky - Aug 14, 2012 at 12:28 AM

    Luxury tax is the most efficient and fair system in pro sports. No one wants to see small market teams get priced out of the game, but I’m sick of seeing teams with diehard loyal fan bases get punished because this league has teams in markets that cant support them. (Chicago post-Cup win as an example)

    Allow teams to pay what their market will bear while allowing smaller market teams to benefit by the shared revenue. It’s not perfect but it’s a hell of a lot better than, A – the crap they’ve got now, and B – the crap the owners are trying to shove down our throats moving forward.

  12. jimw81 - Aug 14, 2012 at 12:36 AM

    Kitshky nailed it. Why should teams like flyers, red wings, rangers be punish for bring in most the revenue for the league. In a luxury tax or cap system lower market teams still won’t spend.

    • hystoracle - Aug 14, 2012 at 2:17 PM

      They are not punished.. In a league. all members have to survive. You need other teams to play if the league is to be successful. The League can’t allow teams to cease to operate. The sports leagues are a cartel of sorts. They must work together for the betterment of everyone. If you allow teams to go out of business (which is what would happen if their was no revenue sharing) your league shrinks as does interest in it. Pretty soon, no one is making any where near the money they enjoy now from the owners to the players.
      US TV isn’t going to pay to air a 6 team league. No US TV No Money. Canadian market can only support so much.

  13. madman69 - Aug 14, 2012 at 8:29 AM

    So Fehr wants to turn this in to the NBA and MLB? what a jack off. A luxury tax will ruin everything the last lockout did to create parody in the game. I love being able to go to a game where the Wings play the BJ’s, Kings (when they sucked in the regular season), Rangers or Panthers and know that i’m most likely going to see a good game. The term “any given sunday” comes in to play; i love the fact that it’s a ten or twelve team battle for the playoffs until the last week. The NBA has losing records playing in the playoffs each year and the MLB only has a few competitive teams that you know will be there. Living in Michigan i’ve been spoiled though with Mr. I pumping money in to the Wings and Tigs at will. Imagine if you’re THE die hard…Panthers fan. You know you’re in Florida and that it’s the best chance at hockey you’re going to have and then the NHLPA comes in and demands that each team can spend as much money as they want as long as they have it…bye bye every sun belt team. Any team with a fly by night fan base or bandwagon-ers will flop and we’ll only have three or four competitive teams. This is a horrible idea and anyone who agrees with a luxury tax in hockey is a comunist! ha!

  14. tmoore4075 - Aug 14, 2012 at 8:35 AM

    You can still have a hard cap with a luxury tax. @Fehr Thee Well on twitter was breaking down some ideas. Basically you go 50/50 split which the cap would then be about $60mil and let teams go up to lets say $68mil if they want but you tax the crap out of them for doing but don’t let them go over $68mil. The floor gets lowered back into the 40’s plus those teams will get money from the big clubs. Anyone who says it will hurt small market teams…anymore than the current deal is? The floor is way too high and there isn’t a lot of money trickling down. I feel like I’m watching congress here where the NHL owners want to balance the budget but won’t do anything of real substance to do it. Just try an adjusted version of what they’ve been doing for years.

    • greatminnesotasportsmind - Aug 14, 2012 at 1:35 PM

      actually luxery tax and hard cap are 2 complete different things.

      A hard cap is you can’t go a penny over the set cap.

      A luxery tax, you can spend every dollar in your bank account.

      I guarantee you Sidney Crosby wouldn’t have resigned with Pittsburgh if there was a luxery tax. He would have waited knowing someone who is a Cup contender is going to break the bank for him who was already at the cap.

      Don’t forget these owners are rich savvy SOBs. Why it might sound like a lot to pay dollar for dollar each dollar they are over the luxery tax threshold. That’s pocket change to them.

      • tmoore4075 - Aug 14, 2012 at 2:05 PM

        First they are two different things when you look at them like MLB and the NFL. The idea that is being floated out there is that while there would be a luxury tax there would still be a ceiling that teams couldn’t go over. So no they couldn’t spend every cent under the idea that the one I guy I mentioned was talking about. So there would still be a cap in that sense. Something MLB does not have.

        And your comment about Crosby makes no sense based on what I had written. A team couldn’t just give him anything because they couldn’t just spend what they wanted. There would still be a ceiling that teams couldn’t go over.

        Your last comment basically agrees with me if you’d read what I wrote and not just see luxury tax and actually read my details. If it’s pocket change to go over the threshold of $60mil and they are willing to pay to the ceiling of 68-70mil that’s good for the NHL that teams are spending close to the same. Meaning Minnesota would be spending what Boston, Detroit or Philly would be. Plus all that money over the $60mil threshold for how many ever teams (14 teams right now are over $60mil by at least a little) would be taxed and filtered down to the small markets that need the help. So Bettman gets to keep PHX, FLA and CBJ and at the same time those teams don’t have to spend a lot while they are rebuilding or can’t afford it. Currently Phoenix gets 0 help from revenue sharing because of market size and neither does NYI because they are “in New York.” Both those teams need it more than most.

  15. hockeydon10 - Aug 14, 2012 at 11:34 AM

    Interesting facts to see before one agrees with the billionaire (or near billionaire) owners crying poor. I’m a little baffled why REPORTERS don’t report this sort of thing. It’s right there in the CBA. I know it would take a little research and work, so maybe that’s too much to ask of hockey reporters today. After all, this took about 5 minutes to find.

    * The top ten money-making teams contribute to the pool. The bottom 15 money-making teams are eligible to collect from it.
    * The amount of money contributed by the top ten teams is set by a formula that includes a percentage of overall league revenues and some playoff revenues. The exact number isn’t worked out until the season is over and all revenues have been counted.
    * For a bottom-15 team to collect a full revenue sharing cheque, it must reach at least 80% capacity in home attendance (last year that meant averaging about 14,000 per game) and show revenue growth that exceeds the league average. Missing either threshold means a cut in the share.
    * In 2010, a full share of revenue sharing was about $10 million.
    * Teams in markets with more than 2.5 million television households cannot qualify for revenue sharing. By my unofficial estimate, that means the Rangers, Islanders, Devils, Flyers, Blackhawks, Ducks, Sharks, Stars, and Kings are ineligible.

    What does this mean? It means every team with an operating loss EXCEPT the Coyotes, Islanders, Ducks, & Sharks had that negative operating income turn into a positive because of the current CBA. This means that really only four teams (give or take each year) lose money.

    So, what is really being discussed is the 10 rich owners that pay into the pool want the players to prop up the 15 worst teams.

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