Post by dreamcatcher on Dec 10, 2004 12:03:01 GMT -5
As I've posted in another thread, if the counter offer from the NHL is a $1 for $1 Luxury Tax on a payroll threshold of $30-$35 million, and $2 for $1 on a threshold higher, (dare say anyone would go higher) it COULD work...but I suspect that this offer of $1 for $1 or worse, would be rejected, and the NHLPA would put themselves into an "Impasse" position for next year, allowing the NHL to implement a hard cap per team and force players to accept it, or play elsewhere.
A while back, the luxury tax-based system did not represent an acceptable alternative for the League in collective bargaining. When they first approached the Union in March 1999, alerting them to the growing concerns with the significant salary inflation caused by our current economic system, and the mounting team and League-wide losses resulting from the inflation, perhaps the NHL were better-positioned to "experiment" with system changes that may have been "well-intentioned," but lacking in certainty of results. But the Union never offered to make those changes, instead insisting on "staying the course," and maximizing player salary growth over the remaining 5-1/2 years of the CBA. Now, having experienced roughly $1.8 billion in losses over the term of this CBA, and almost $500 million in League-wide losses in just the last two years, the League no longer has any margin for error. They can no longer afford to "guess," and that's what a luxury tax-based system is premised on -- guesswork.
By definition, the establishment and implementation of a luxury tax cannot and does not produce "certainty." The parties (the NHL and the NHLPA) would necessarily have to project and estimate (based on the payroll threshold at which the tax would take effect and the rate at which payroll dollars would be taxed) how any tax implemented would impact Club behavior, if at all.
What if, despite everyone's best intentions, projections and estimates are wrong? The future of this game is too important to take any chances -- to "gamble" on a result -- especially when an alternative which provides absolute "certainty" and is fair to everyone is so easy to design and implement. It is player greed that is standing in the way of all certainty.
Moreover, and just as important, a luxury tax-based system allows for the continuation of payroll disparities among Clubs -- and, depending on the structure of the tax, potentially wide-ranging disparities (a la the New York Yankees and Tampa Bay Devil Rays in baseball). This is not something the League is prepared to accept.
Rather, the League is committed to significantly reducing or eliminating payroll disparities among Clubs, so that fans in all 30 of the NHL'S Clubs' markets feel their team has the ability to compete for championships on an annual basis. That's what sports is all about -- attractive competition; and the more "even" the competition, the more attractive the sport is bound to be.
Finally, under a luxury tax-based system, Clubs which choose to ignore the tax -- regardless of its threshold or its rate -- would continue to establish inflationary benchmarks for comparable players that all other Clubs would be forced to deal with, and be competitive with. This necessary dynamic of a luxury tax-based system would continue to fuel salary inflation on a League-wide basis, and is one of the principal dynamics responsible for the failure of our current economic system.
For all of these reasons, the League has no interest in a system premised on a luxury tax on player payroll and I am confident that even though I believe a $1 for $1 or $2 for every $1 system COULD work, there are no guarantees for the League in this, and thus, ultimately there will be no Hockey this year.
Look to next year and the implementation of a hard cap in the $30-$35 million range, and several court challenges from players and their attorneys...if not the NHLPA itself!
Armageddon is just beginning folks! When all is said and done, it could become very inexpensive to house an NHL team.
A while back, the luxury tax-based system did not represent an acceptable alternative for the League in collective bargaining. When they first approached the Union in March 1999, alerting them to the growing concerns with the significant salary inflation caused by our current economic system, and the mounting team and League-wide losses resulting from the inflation, perhaps the NHL were better-positioned to "experiment" with system changes that may have been "well-intentioned," but lacking in certainty of results. But the Union never offered to make those changes, instead insisting on "staying the course," and maximizing player salary growth over the remaining 5-1/2 years of the CBA. Now, having experienced roughly $1.8 billion in losses over the term of this CBA, and almost $500 million in League-wide losses in just the last two years, the League no longer has any margin for error. They can no longer afford to "guess," and that's what a luxury tax-based system is premised on -- guesswork.
By definition, the establishment and implementation of a luxury tax cannot and does not produce "certainty." The parties (the NHL and the NHLPA) would necessarily have to project and estimate (based on the payroll threshold at which the tax would take effect and the rate at which payroll dollars would be taxed) how any tax implemented would impact Club behavior, if at all.
What if, despite everyone's best intentions, projections and estimates are wrong? The future of this game is too important to take any chances -- to "gamble" on a result -- especially when an alternative which provides absolute "certainty" and is fair to everyone is so easy to design and implement. It is player greed that is standing in the way of all certainty.
Moreover, and just as important, a luxury tax-based system allows for the continuation of payroll disparities among Clubs -- and, depending on the structure of the tax, potentially wide-ranging disparities (a la the New York Yankees and Tampa Bay Devil Rays in baseball). This is not something the League is prepared to accept.
Rather, the League is committed to significantly reducing or eliminating payroll disparities among Clubs, so that fans in all 30 of the NHL'S Clubs' markets feel their team has the ability to compete for championships on an annual basis. That's what sports is all about -- attractive competition; and the more "even" the competition, the more attractive the sport is bound to be.
Finally, under a luxury tax-based system, Clubs which choose to ignore the tax -- regardless of its threshold or its rate -- would continue to establish inflationary benchmarks for comparable players that all other Clubs would be forced to deal with, and be competitive with. This necessary dynamic of a luxury tax-based system would continue to fuel salary inflation on a League-wide basis, and is one of the principal dynamics responsible for the failure of our current economic system.
For all of these reasons, the League has no interest in a system premised on a luxury tax on player payroll and I am confident that even though I believe a $1 for $1 or $2 for every $1 system COULD work, there are no guarantees for the League in this, and thus, ultimately there will be no Hockey this year.
Look to next year and the implementation of a hard cap in the $30-$35 million range, and several court challenges from players and their attorneys...if not the NHLPA itself!
Armageddon is just beginning folks! When all is said and done, it could become very inexpensive to house an NHL team.