How do we fix the imbalances in the cap system?

[Bluelines]

Rich teams that revenue share with poor teams, should be allowed to go over the cap by a % of the dollars they revenue share. How is it fair that I buy a franchise and because I run it correctly I'm taxed to help out franchises that are not run as well? If a team like Arizona keeps running their franchise into the ground, why should the fans of my team have to bail them out?

 

[RobBrown4PM]

Leafs wouldn't mind that but others would. Rather have an NHL to watch then the top 5 business teams holding half the best players.

This is a system m the MLB uses, and the Red Sox and Yankees are far from perennial champions.

 

[Throw More Waffles]

I understand how it might affect a ufa for where they want to play. But I don't think rfa's and their shark agents just accept getting less money than they could.

agent: "Direct comparables sign for 10% of cap for 6 years. So we'd like a contract in that range."

gm: "But your client will pay less taxes."

agent: "Uh.... good for him."

gm: "No no no. WE (the billionaires) are going to take that tax advantage for ourselves, pay LESS cap percentage to your client which will balance out to the same take-home. You, as the agent, will make significantly less."

agent: "Sure. No problem. We secede the players tax advantage to billionaire owners."



I mean... there's just no way in hell that would happen. Shark agents wouldn't stand for it for a second.

But I think rca's/signing-bonuses/front-loading/endorsements balances the "tax advantage" anyways.

Know who really is hurt? Small market teams that have high taxes. They're completely screwed.

 

[DuklaNation]

If you're in Toronto, this cap system has been an utter and complete failure. Why should Southern Ontario be funding lower income tax franchises who can't come close to matching our revenues? Its really crazy. Raise the ceiling. Allow for income tax equalization. e.g. Toronto should have $90M while TB should have $81.5M. That is more fair. Or abolish the cap system. I favour at least a bigger range in the floor and ceiling to allow more profitable teams some flexibility. Its one of the reasons I don't watch much anymore. Bettman has screwed Canadian teams over from a financial perspective.

 

[Stephen]

If you’re a multi millionaire fallen on hard times, and you can sell one of your 4 mansions to solve your budget problems, can you live with 3 mansions? Or do you prefer 4 mansions but you can’t pay the electricity bill. Something like that.

 

[57 Years No Cup]

Sigh. Another thread started by one of Dubas' minions in order to not so covertly support Dubas' dumb decisions.

 

[The CyNick]

Pretty comical for a thread about financial imbalance to exist on a Leafs message board.

Leafs have the following advantages over almost every market in the league:
-desireable and massive city to live in
-passionate fan base where hockey is #1
-endorsment and post-career income opportunities (commercials, signings, events, etc.)
-unlimited budget for front office and scouting
-blank check from ownership to bury contracts if needed
-blank check on front loaded bonuses
-Prestige of the logo (although maybe that's debatable at this point)

If management can't win with those advantages, they shouldn't be in management.

 

[Throw More Waffles]

Pretty comical for a thread about financial imbalance to exist on a Leafs message board.

Leafs have the following advantages over almost every market in the league:
-desireable and massive city to live in
-passionate fan base where hockey is #1
-endorsment and post-career income opportunities (commercials, signings, events, etc.)
-unlimited budget for front office and scouting
-blank check from ownership to bury contracts if needed
-blank check on front loaded bonuses
-Prestige of the logo (although maybe that's debatable at this point)

If management can't win with those advantages, they shouldn't be in management.

I agree. It's all just lame excuses. Look at how many teams (pre flat cap) had an internal cap ceiling closer to the cap basement.

I do think this is all a legitimate concern for small market/high tax cities. What a shit situation that would be...

 

[DuklaNation]

FYI, MLSE loves the current situation in terms of ROI. You think about that.

 

[AvroArrow]

It's ridiculous that were not allowed to have coaches work over the summer with our players without other teams complaining but Tampa is allowed to essentially go over the cap by 10-20 million every year due to taxes.

If we include the difference between taxes they were like 30m over this year lmao

 

[Its not your fault]

This is a system m the MLB uses, and the Red Sox and Yankees are far from perennial champions.

Far more money in filling an MLB stadium then a hockey Arena.

 

[Golden_Jet]

Pretty comical for a thread about financial imbalance to exist on a Leafs message board.

Leafs have the following advantages over almost every market in the league:
-desireable and massive city to live in
-passionate fan base where hockey is #1
-endorsment and post-career income opportunities (commercials, signings, events, etc.)
-unlimited budget for front office and scouting
-blank check from ownership to bury contracts if needed
-blank check on front loaded bonuses
-Prestige of the logo (although maybe that's debatable at this point)

If management can't win with those advantages, they shouldn't be in management.

Pay 15% in taxes due to RCA’s.
Also Canadian teams pay US taxes in the states they play in, not 100% CDN taxes.

 

[Golden_Jet]

It's ridiculous that were not allowed to have coaches work over the summer with our players without other teams complaining but Tampa is allowed to essentially go over the cap by 10-20 million every year due to taxes.

That would require a CBA change, which the PA would never go for.

 

[PromisedLand]

If you’re a multi millionaire fallen on hard times, and you can sell one of your 4 mansions to solve your budget problems, can you live with 3 mansions? Or do you prefer 4 mansions but you can’t pay the electricity bill. Something like that.

Dubas wants a 5th mansion to forget about the other 4

 

[New User Name]

I'll agree taxes play into where some players want to play.

Let me remind everyone that prior to the salary cap the Leafs last cup was still in 1967.

 

[The Nic]

This has nothing to do with state or provincial taxes... but I would like to see a luxury tax system implemented. Something like... up to $10 million over the cap - a team pays a dollar for dollar penalty to the league (which would effectively increase overall revenue and also raise the salary cap)... and between $10 million and $20 million over the cap - a team pays a 2 dollar per dollar penalty to the league. Obviously, only the rich teams will even consider this... but it would (1) increase league revenue and (2) allow the big market teams to spend what their markets can easily support. I find it hard to believe that, taken to the extreme, a $20 million dollar payroll difference would destroy competitive balance. What it would do is allow all of the teams that are currently capped out to be able to retain most of the key players that they have developed. In a flat cap world... just imagine how stupid, boring and terrible the 'summer signing' day is going to become in a couple of years. Take a look at the players that most teams signed yesterday... I'll be that the average fan won't have any idea who half of the guys are. Rosters are constantly being diluted in order to remain cap compliant... and this will eventually take it's toll on the quality of the product. In fact, it probably already has.

 

[The Iceman]

players are paid in US funds.
Cdn players can spend those US dollars in Canada at a 1.24

Pretty nice, wish I could be paid in US dollars.

 

[Lightsol]

I'll agree taxes play into where some players want to play.

Let me remind everyone that prior to the salary cap the Leafs last cup was still in 1967.

Well, we know that. The Leafs honestly didn't flex their financial muscle for most of their history, because Harold would NEVER pay market rates for anybody. But there's a reason the most successful era of Leafs hockey was after Ballard croaked but before the cap was implemented; the Leafs are one of the few teams that don't actually have to worry about overpaying players, because they make more than enough money to cover it. The only reason salaries are an issue NOW is because of the cap.

 

[New User Name]

Well, we know that. The Leafs honestly didn't flex their financial muscle for most of their history, because Harold would NEVER pay market rates for anybody. But there's a reason the most successful era of Leafs hockey was after Ballard croaked but before the cap was implemented; the Leafs are one of the few teams that don't actually have to worry about overpaying players, because they make more than enough money to cover it. The only reason salaries are an issue NOW is because of the cap.

So petition the Canadian and provincial governments to bring in a professional sports player tax rate. (PSPTR)

Now to be serious. There is as much chance of the PSPTR as there is the league doing anything to help Canadian teams.

It's that simple, why bellyache about something we can't control.

Maybe Canadian born players should take a discount to play for their boyhood teams. WTF they don't even want to play in Canada. Except for a very few and most of them in the final years of their playing life.

That's reality, sadly.

 

[Stonehands1990]

do not agree with the OP's position. Taxes don't have as big of a role to play.

- Leafs do rcas, which NBA has banned
- Leafs players makes more revenue in advertising and marketing than any other players in the league unless you are Ovi, Crosby, McDavid
- Leafs can front load the contract like few other teams can

why front loading the contract matters?

• You get a lot of your money a lot before
• You can invest in a property NOW instead of waiting, and then earn higher rate of return. Imagine Marner buying property before pandemic, and then the ridiculous house price increases during the pandemic itself especially in Toronto, and marner selling these properties at the inflated prices. This higher rate of return is only possible when you have a large capital available "Right Now"
• You can also invest in stocks/currencies/funds etc... "Right Now" instead of waiting
  
  • Simple Example: investing 1 million in a fund that has 1% rate of return versus investing 10 million in a fund that has a 1% rate of return.
  • Leafs players can make quite a bit of money compared to other players playing for other franchises.

bottom line: I don't buy the tax theory that OP is talking about. For the Leafs thats not a big issue.

Exactly. The tax theory is WILDLY overrated by fans. If it was a true theory Vegas, Seattle, Nashville, Panthers, Dallas and TB would be untouchable. It’s only a discussion because Tampa is competitive