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After Tax Salary Caps

I am Canadian said:
The cap is 100% for parity. Low budget teams would be terrible and would attract zero fans. Leafs, Habs, Rangers, Chicago, Philly, Detroit etc would buy out the league.

If it wasn't about parity they would let teams exceed it who have excellent finances
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That literally defeats the purpose of a cap. The cost certainty is only obtained by ensuring the teams you’re bidding against are playing by the same rules you are.
 
Salary cap is about cost control more than fairness. Do you really think the owners of high tax teams like Toronto, Buffalo, Anaheim, Montreal, etc. want to spend another 5-10$ million "bonus" cap to have to spend on salary? They may say they do to keep fans happy but they don't really want to spend more.
 
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Jason MacIsaac said:
One is of monitary value where the other is quality of life, the military gives out PLD to compensate for costs in certain cities. I know this is near impossible to quantify but it would be great if you could do the same in sports. Have the base cap but a team like Ottawa has an extra 1.5 million in cap space.
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Then the cities with the best quality of life would have the advantage over all other teams and you’d need to compensate for that no?
 
TOGuy14 said:
As a Toronto fan I would fully support some sort of modifier for tax jurisdictions in the next CBA.

Toronto gets told we can’t have our facilities open all summer to train prospects or use minor league refs at scrimmages because that is unfair to the other teams in the league, meanwhile Tampa getting 10-30% discounts on their signings and Bettman is like “this makes sense”
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First of all, 30%? That’s completely made up. And 2nd of all, if you’re doing that then we need to compensate for the ability to pay in big signing bonuses, compensate for endorsement opportunities etc. You can’t have your cake and eat it too
 
BoredBrandonPridham said:
USD v.s. CAD doesn't mean shit. It's not like something that costs $3CAD in Canada always costs $3USD in the US. All else equal, if USD -> CAD is a rate of 1.3, then your $3USD purchase in US would just be $3.9CAD in Canada.

The conversation about buying power between US and Canada is not about exchange rate, it's about cost of living, and I'd wager on average the cost of living where Canadian teams are located on average is greater than the cost of living where US teams are located. And that is in addition to generally having higher taxes.
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Lol. Adam Smith, is that you?? "All else equal" in economics always made me laugh in University. All else is never equal, and only qualifies for base theory exams where you look at charts in a vacuum.

In 2019, the PPP (purchasing power parity) for CAD to USD was 1.194, per OECD.org. Per the Bank of Canada, the annual average FX was 1.3269. PPP "theory" compares currencies through their ability to buy certain goods or baskets of goods, which is what youre talking about. Your example of 3US for a cheeseburger or whatever, to 3.9CAD, is of two currencies at par PPP assuming a 1.3 FX rate.

This almost never happens, since currencies are based on supply and demand, along total market sentiment. Added to the fact that the US is always in demand since it the most used reserve currency, means having or earning USD is generally beneficial.

PPP theory is macroeconomic and more about GDP and trade. Its fairly useless when comparing Ohio to Alberta, etc. Its absolutely an advantage to make USD in Canada. Maybe that advantage is lessened if you live in Vancouver, but to just say purchasing power = FX rate, is ultra simplified.
 
Jason MacIsaac said:
Oh I agree, everything needs to be quantified and adjusted at least every 5 years.
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That’s the thing. For everything you adjust, something else will come up, then debate about how much each needs to be adjusted, then try to ratify it with the NHLPA, it would take 5 years to get it even close.
 
"Competitive balance" is just some shit the NHL sold the fans so they would accept the lockouts. The reality is, the cap is primarily about financial certainty for the league, so allowing some teams to spend more because they have more income tax, is actually against the spirit of the cap.
 
MGK said:
Poor NYR. Nobody ever wants to play for them.
Except Fox. And Trouba. And Panarin. And


If it weren't for taxes and *checks notes* 11m spent on buyouts...
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Thinly useless comment here.

NY is one the most exciting and desired city in the world, especially when you're rich and famous.

Your comment doesn't apply for less enticing (see boring) cities with the same tax rate as NY.
 
Dache said:
That’s the thing. For everything you adjust, something else will come up, then debate about how much each needs to be adjusted, then try to ratify it with the NHLPA, it would take 5 years to get it even close.
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it would all come down to % of HRR. If it was a net raise they would sign off on it. Owners would not like that. A net neutral one would be complex and leave a lot of people unhappy for various reasons. A net diminishment of HRR would obviously not fly with players.
 
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Dache said:
That’s the thing. For everything you adjust, something else will come up, then debate about how much each needs to be adjusted, then try to ratify it with the NHLPA, it would take 5 years to get it even close.
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I don't think we give the brain trust of the NHL the credit they deserve. Just because it is different from how we do business doesn't mean it is wrong.
 
Jason MacIsaac said:
They should strive to be fair, otherwise we wouldn't have a salary cap.
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As people have already told you in this thread, the salary cap was never about parity

It was strictly about cost certainty for the owners.

The owners didn't cap the players earnings as a collective out of fairness to each other, they did it to suppress player earnings and keep them from growing unchecked
 
ResilientBeast said:
As people have already told you in this thread, the salary cap was never about parity

It was strictly about cost certainty for the owners.

The owners didn't cap the players earnings as a collective out of fairness
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Regardless of the reasoning behind the salary cap, one of the outcomes stressed by the NHL and NHLPA was parity among NHL teams. At the end of the day, why shouldn't we be trying to create an even playing field among teams? Why are people so against that? For the people saying that it is work, of course it is work. Anytime you look to institute change there is a lot of work involved. Is the juice worth the squeeze? I believe so.
 
Jason MacIsaac said:
I don't think we give the brain trust of the NHL the credit they deserve. Just because it is different from how we do business doesn't mean it is wrong.
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Never said it’s wrong. I’m saying it’s too complicated to do properly.
 
Jason MacIsaac said:
Regardless of the reasoning behind the salary cap, one of the outcomes stressed by the NHL and NHLPA was parity among NHL teams. At the end of the day, why shouldn't we be trying to create an even playing field among teams?
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Jason MacIsaac said:
They should strive to be fair, otherwise we wouldn't have a salary cap.
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This is certainly a contradictory statement to your follow up.

Yes that was what they stressed because the owners can't come out and explain that they don't want the costs associated with running their teams to skyrocket as players demand more money.

Here you go

Saying they have lost $1.8 billion over the last decade and close to $500 million in the last two years, NHL owners have demanded "cost certainty" in any new deal in a bid to gain control of skyrocketing payrolls.

CNN.com - NHL cancel remainder of the season - Feb 16, 2005

It was never about parity @Jason MacIsaac
 
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