So will the NHL salary cap continue to grow year after year?
Is hockey inoculated from the real world economic downturn?
Will the Canadian dollar continue to be stronger than the American dollar?
Will consumers keep paying higher and higher ticket prices to help owners pay free agents long term contracts?
Is the new CBA better than the old CBA? For instance, what would a 22-year-old restricted free agent have made as a RFA under the old system?
Will offer sheets remain a viable threat against owners in the future?
What happens if the salary cap ever does go down?
Why would the players’ union EVER complain about this system? 
The players have so much leverage. RFA years have now become like UFA years and UFA is reached at a younger age. There is arbitration and there is now the threat of offer sheets. There are always new owners coming into the league that want to make “a splash” for their market. It is a great time to be a player in the NHL. Plus the players get a disproportionate share of the revenues and the revenue growth compared to the owners, a good deal for the players and their agents.
There are a lot of questions to be answered over the coming years. There are a lot of decisions being made today that will look dumb in the not too distant future. We are all at risk except for the players that get guaranteed contracts and the bloggers and message board posters that never have to live truly with the consequences of their words and recommendations. We live in interesting times, don’t we?
It doesn’t matter if RFA years have now become like UFA years. It doesn’t matter that UFA is reached at a younger age. It doesn’t matter if there is arbitration. It doesn’t matter if there is now the threat of offer sheets. It doesn’t matter if there are new owners that want to make “a splash” for their market.
All that matters is that the sum total of player salaries is CAPPED at a fixed percentage of league revenue. Period.
If players are getting ridiculous amounts of money, it isn’t because they are asking for it; it’s because they are being OFFERED ridiculous amounts. Nor are all players in that boat. For every $7-million-plus salary there is one (or more) near the league minimum. Why? Because the the sum total of player salaries is CAPPED at a fixed percentage of league revenue. Period.
You argue that the players get a disproportionate share of the revenues and the revenue growth compared to the owners? I concede, albeit grudgingly, that whether or not the players share of revenues is disproportionate is, at least, arguable — though the proportion they get is the proportion owners agreed to. But to argue that the players get a disproportionate share of revenue growth is without merit, even ludicrous — simple algebra tells us that, with player salaries defined as a fixed percentage of revenue, both players and owners share the exact same rate of growth.
Apparently, though, I’m “not at risk” because I’m a mere message board poster that never has to live truly with the consequences of my words and recommendations. I do, however, have to live truly with the promises and agreements that I make, even if they put me at risk — as do you.
Ted, we’ve heard it all before. An owner of a professional sports team cries foul after the bargaining agreement that HE HELPED FORGE doesn’t turn out in his favor. The simple fact is that everyone’s got a hard cap that they have to abide by and the salary cap has grown 17 million since the lockout.
Salary cap growth in other sports (and purse growth in golf) is driven by one thing – TV ratings. Football gets good ratings, which means more advertising, which means more interest/competition in broadcast rights and a huge chunk of money going into the league. Hockey doesn’t have that right now and will need to continue to grow in terms of building fan interest. Even with HD broadcasts, developing new fans is difficult. As you’ve noted before, hockey is a game people take up because they are interested in it and can afford to. You can’t play hockey 1-1 without a bunch of equipment and space.
Hockey is vulnerable to the same pressures as the rest of the economy. Hockey is entertainment, not a necessity. As essential costs (such as food, transportation) increase their share of the household budget, non-essential costs (such as entertainment, vacation) go down. That means fewer people going to games, especially as ticket prices grow to accomodate the ever increasing costs of players. The fan base of the Caps include the real fans (who live, breathe, and die with the performance of the team and, more importantly, buy merchandise and support the team and drag other people to games) and the corporate seats. The corporate seats provide a steady flow of income, to be sure, but don’t really develop serious fans. From talking to friends who’ve gotten corporate seats to games, they go because the tickets are free, but if they weren’t they probably wouldn’t be there. So the real fans are the ones who will be getting hit with the biggest pinch between essential and non-essential expenses. Ironically, the plethora of ticket packages may work against the Caps…people shift down to ticket packages with fewer games because, even though the price per game goes up, the associated costs (getting to the game, food and/or drink before/during the game, etc.) go down, making it less expensive over the long haul.
It’ll be interesting to see how the broader economy affects the Caps finances. Getting quality stars on the ice for the team helps increase the draw, though.
we have one already
karl alzner
Re: “There are a lot of decisions being made today that will look dumb in the not too distant future.”
Didn’t you just today on another post say: “It is now time to look forward NOT backwards. No more discussion of the past…”
So while a lot of today’s decisions will look dumb soon, we can’t talk about them? Is that how it works in Ted-land? Or is it only ok for YOU to question the decisions of others, Ted?
“the bloggers and message board posters” are the most passionate of fans who buy the tickets and raise the ratings and buy the pricey t-shirts and beer and bobble heads and on and on and on and talk endlessly to their coworkers about what a great game hockey is. Some posts are…lets say pointed…maybe stupid sometimes, but the customers are the ultimate cash cows that run the whole show. So if many of us have our noses out of joint because of the Kolzig to Huet to Theodore …process?…let us vent just as we do when we we are making ourselves hoarse screaming for the team at the phone booth and wearing our arms out waving the damn red towels. Interesting times indeed!
Kate: not everyone on the message boards is claiming that GMGM is a dummy…the impression I get is just the opposite (after the initial shock of losing Huet). I for one think the way we are going about this is the right way; slow, methodical, calculated…acquiring the foundation.
p.s. agree with doughless….we need a true blueliner
I agree with you Ted. I am nervous aboout what is going on in the NHL. These players are asking for ridiculous amounts of money and a good portion of them are unproven or inconsistent. I really hope the NHL gets this under control b/c if they even get close to another lockout type situation there will be huge repercussions. I also like the fact that you’ve said (again) that there are REAL repurcussions for the owners and everyone else involved in the team when signing players. I get so frustrated with the demands and insults on the message boards. I think you guys are doing a great job and we will have a continued good future with this team. GMGM has proven himself not to be a dummy as everyone on the boards are claiming.
Ted:
plenty of us message board posters agree with you, especially on some of the ridiculous amount of money being thrown around the NHL to sign players. we realize there are tradeoffs to the decisions you make relative to the salary cap. i am just one of many fans that have observed that an upgrade in the defense might serve the purpose of getting our hands on the Stanley Cup. Because at the end of the day, that is what it is all about. right?
Ted, I remember reading an article written by Bill James (the baseball writer) and it had to do with free-agency and the best way to make salaries come down. They way to do it is by allowing every player to be a completely free agent once their contract is up.
Sure you might have one team try to outspend others to build a superteam (a lot of good that did for the NY Rangers at the start of the decade) but in the end salaries will go down for most players due to supply and demand. When talent (which is what the players represent) becomes more freely available (i.e. increased supply), then the cost of talent will go down.
I don’t think that will work out though, as the NHLPA won’t go for that, and I bet they prefer having the various degrees of restricted/unrestricted Free Agents…