Salary Cap: The three things ruining the NHL (Especially Canadian Teams)

[Nineteen67]

Seeing Canada win made me think to myself, why is it that Canadian teams struggle to win? How long can we go without a cup before a course correction is made?

These are the things I identified.

1. The Cap vs Canada's higher taxes. Some sort of resolution must be made at the govt level for pro athletes. It needs a pro sport competitive fairness lobby to ensure that leagues which allow betting have a level playing field.

2. The NMC should not exist. No teams should be bound to a player. It does not make sense and a limited NMC generally should suffice. This obviously again affects cap if you are stuck with a non performing player.

3. The buyout should be a one and done final option with no cap penalty. 1 a year at the very least, why are teams bound to this crazy concept.

Made it a poll to see how others feel.


[[[If you borrow this for your tv segment wave at the camera or something]]]

California has won 3 Cups in 18 yrs. Taxes can’t be the problem.

 

[TMLBlueandWhite]

Seeing Canada win made me think to myself, why is it that Canadian teams struggle to win? How long can we go without a cup before a course correction is made?

These are the things I identified.

1. The Cap vs Canada's higher taxes. Some sort of resolution must be made at the govt level for pro athletes. It needs a pro sport competitive fairness lobby to ensure that leagues which allow betting have a level playing field.

2. The NMC should not exist. No teams should be bound to a player. It does not make sense and a limited NMC generally should suffice. This obviously again affects cap if you are stuck with a non performing player.

3. The buyout should be a one and done final option with no cap penalty. 1 a year at the very least, why are teams bound to this crazy concept.

Made it a poll to see how others feel.


[[[If you borrow this for your tv segment wave at the camera or something]]]

I'm not on board with any of these.

1. Is outside the box thinking. And I mean waaaaay outside the box. Most teams and leagues operate under a principle of transparency anyway. So all public knowledge regarding gambling bets is generally under full disclosure for the bettor. Taxes and gambling don't have anything in common other than taking the average citizen for a ride. It's not up to the league to manage players and teams finances and I doubt they would want the league doing it anyway.

2. Once upon a time a NMC was used as a reward for a star player at the end of his career. Now every Tom, Dick, and Harry in the league gets one as soon as they are eligible. As much as I can understand why a Leafs fan would want them abolished it's not up to the league to prevent teams from shooting themselves in the foot.

3. Compliance buyouts reward inept managers. It's not up to the league to prevent teams from shooting themselves in the foot.

The only one that has any chops is the first one.

That's the only one that is dictated under third party. The other two are fully under a team's control. Too bad taxes are unavoidable and life ain't fair.

These guys are all in the platinum card club anyway so they receive favourable treatment and tax havens us poor working slobs know nothing about.

 

[seanlinden]

That’s just part of the business. The player is still getting millions. I would be ok with a limited trade clause I guess so the players can have a bit of a say but these no move ones really bother me.

"The business" is what players (as a collective) and the league (as a collective) determine it to be. Collectively, they've determined that once a guy has put in an amount of "service" in the league, or has reached an age where he might have kids, that he should be able to negotiate movement protection into his contract.

Don't get me wrong, I have a problem with no-move clauses as well, as I think it would be unreasonable for the guy that signs in Tampa for $9m (turning down Winnipeg at $11m) to be traded to Winnipeg a week later for a 1st round pick. However, I do think players owe the team sort of a 'bare minimum of performance' that they wouldnt want to be rid of him for nothing.

That being said, I think it's on GMs, not the league, to regulate how and when they're giving out the full no-Moves.

 

[thewave]

California has won 3 Cups in 18 yrs. Taxes can’t be the problem.

California has to be the top destination for wealthy young couples. Anywhere Canada is not that and not just for tax reasons.

 

[thewave]

"The business" is what players (as a collective) and the league (as a collective) determine it to be. Collectively, they've determined that once a guy has put in an amount of "service" in the league, or has reached an age where he might have kids, that he should be able to negotiate movement protection into his contract.

Don't get me wrong, I have a problem with no-move clauses as well, as I think it would be unreasonable for the guy that signs in Tampa for $9m (turning down Winnipeg at $11m) to be traded to Winnipeg a week later for a 1st round pick. However, I do think players owe the team sort of a 'bare minimum of performance' that they wouldnt want to be rid of him for nothing.

That being said, I think it's on GMs, not the league, to regulate how and when they're giving out the full no-Moves.

I still believe the only resolution is to lobby a unified tax treaty for professional sports players. It wouldn't be hard to do. There are only what? 4000 pro athletes making over 1 million? Probably even less. They just need to have a special filing designation. They could probably level the playing field in an afternoon brainstorm and pitch it between states.

They could also make a designation and tax pool and split the money equally among states and provinces.

How about if states used pro player taxes into a fund for use for specifically state and provincial sprts and rec initiatives.

How about harmonizing it and earmarked those monies for olympic programs?

Aren't those better ideas?

 

[seanlinden]

I still believe the only resolution is to lobby a unified tax treaty for professional sports players. It wouldn't be hard to do. There are only what? 4000 pro athletes making over 1 million? Probably even less. They just need to have a special filing designation. They could probably level the playing field in an afternoon brainstorm and pitch it between states.

They could also make a designation and tax pool and split the money equally among states and provinces.

How about if states used pro player taxes into a fund for use for specifically state and provincial sprts and rec initiatives.

How about harmonizing it and earmarked those monies for olympic programs?

Aren't those better ideas?

It would be wholly irresponsible for a government to dedicate time and/or resources thinking "how can fix things for 4000 people".

Not sure how many states have teams in them, but asking somewhere in the neighborhood of 35 to 40 governments to get together on this? Pigs will fly first.

At the end of the day, a state / province doesn't care, and cannot care, whether somebody is a hockey player or laywer when it comes to taxation purposes.

 

[TMLBlueandWhite]

I still believe the only resolution is to lobby a unified tax treaty for professional sports players. It wouldn't be hard to do. There are only what? 4000 pro athletes making over 1 million? Probably even less. They just need to have a special filing designation. They could probably level the playing field in an afternoon brainstorm and pitch it between states.

They could also make a designation and tax pool and split the money equally among states and provinces.

How about if states used pro player taxes into a fund for use for specifically state and provincial sprts and rec initiatives.

How about harmonizing it and earmarked those monies for olympic programs?

Aren't those better ideas?

I think the whole tax thing is overblown anyway.

Not everyone can play in a sunshine state with no taxes. There's only a few limited number of spaces available. So not many athletes make a move because of tax reasons.

Most just follow the bigger paycheque and use different tax shelters and havens to reduce their amount owing.

 

[MK78]

Interestingly, Kane was making $6.3mm against the Cap their last win.
The next year he was making $10.5mm against the Cap.

Ditto: Jonathan Toews

Now they're a bottom feeder.

Any Leaf fan would take 3 cups in 5 years and they could be bottom feeders for a decade.

 

[ULF_55]

Any Leaf fan would take 3 cups in 5 years and they could be bottom feeders for a decade.

Yep.

As soon Hawks had to pay full rate for Toews and Kane they were done.

Leafs paid full without ever having success.

 

[Guy Boucher]

I have other questions:

Why are teams limited in what % of salary they can retain? Why is it 50%? Why not 100%?

Also why are they limited in how many players they can retain salary on? Why is it only 3?

These things make little sense to me. If I'm a rebuilding team, I want to maximize the returns I get on players (and retain more). If I'm a contending team, I want to add the best players for the lowest price and will pay futures to get that.

This doesn't effect the salary cap (it's one system in the end and revenue is shared with the players).

It just makes player movement more difficult and the league less exciting.

 

[thewave]

It would be wholly irresponsible for a government to dedicate time and/or resources thinking "how can fix things for 4000 people".

Not sure how many states have teams in them, but asking somewhere in the neighborhood of 35 to 40 governments to get together on this? Pigs will fly first.

At the end of the day, a state / province doesn't care, and cannot care, whether somebody is a hockey player or laywer when it comes to taxation purposes.

So why doesn't Canada ever win a cup?

MTL got close a couple times and EDM in 34 years is it? How could that be?

Are Canadians less intelligent? Do the smartest Canadians leave Canada to work in the USA? Statistically there myst be a reason for the lack of success we have here. 1/3 of the league give or take goes 0 for 34, why do you think that is if not for the cap?

It would not be that hard to create a classification. There are diplomats, ambassadors and all sorts of classifications which could be repurposed IMHO. T999 tax forum whatever.

I think the whole tax thing is overblown anyway.

Not everyone can play in a sunshine state with no taxes. There's only a few limited number of spaces available. So not many athletes make a move because of tax reasons.

Most just follow the bigger paycheque and use different tax shelters and havens to reduce their amount owing.

How does Canada go 0 for 34 years without a cup? Are we just stupid business people? Maybe we are just a country of backwoods dopes. I mean, there has to be a reason for such a crazy stat

 

[ULF_55]

Crazy and impossible are indeed words that come to mind.

Even making some generalized adjustments that vary from franchise-to-franchise would cause major grief in calculating and applying a cost-certain salary cap that is determined in advance of the season and doesn't change substantially based on based on player movements including trades etc.

My spitball suggestion doesn't need to impact the League Cap.

Cap remains the same for the league.

What I suggest, again just throwing things at the wall is for example:

Very very basic:

$100mm cap.

Highest taxed teams get Cap+6%
Lowest taxed teams get Cap -6%

Pro-rate other teams that fall between the 2 extremes.

Total Cap dollars do not change.

In reality nothing is going to happen, as the league doesn't care who wins, just want it to be a good American market. Canadian and small market teams they could give two poops about.

 

[MK78]

Canadian players get paid in US dollar as well. If they live full time in Canada, isnt that an advantage or at least a wash in being paid in USD while spending in CAD?

I don't blame Americans though for not wanting to sign with Canadian teams when they have a choice. The covid travel restrictions & mandates soured a lot of them, not just hockey players. If it happened once, it can happen again.

 

[thewave]

My spitball suggestion doesn't need to impact the League Cap.

Cap remains the same for the league.

What I suggest, again just throwing things at the wall is for example:

Very very basic:

$100mm cap.

Highest taxed teams get Cap+6%
Lowest taxed teams get Cap -6%

Pro-rate other teams that fall between the 2 extremes.

Total Cap dollars do not change.

In reality nothing is going to happen, as the league doesn't care who wins, just want it to be a good American market. Canadian and small market teams they could give two poops about.

It's probably one of the better solutions but likely needs to be about 10%

Players signed in that state or province withn+10 can take the bonus to a low tax state

 

[ULF_55]

It's probably one of the better solutions but likely needs to be about 10%

Players signed in that state or province withn+10 can take the bonus to a low tax state

I would not have players salary/contract changed if traded.
Acquiring team just accepts the contract, although seller could still retain.
So a player signing for a lower amount in low/no-state income tax risk they could be traded to a high tax team if they don't have protection.

Mostly we're talking UFA players, on 2nd. or 3rd. contracts where the player decides where they go. If they don't get NTC protection they could end up paying the price. So maybe players choosing those locations fight harder for NTC's. Identify 10 teams they can't be traded to ... Canada and California that's about 10 LOL.

 

[Nineteen67]

California has to be the top destination for wealthy young couples. Anywhere Canada is not that and not just for tax reasons.

Are you suggesting Canadian lifestyle is not conducive to winning Stanley Cups

 

[thewave]

Are you suggesting Canadian lifestyle is not conducive to winning Stanley Cups

No I am saying that Canada is not as desirable to young men and women who grow up in rural Canada and want to taste the limelight with their new found riches.

Imagine. Hey bud I will give ya two choices, LA or Toronto in the winter, same money, same taxes. Seems kinda silly right?

The other issue is taxes, I mean what else could it be when Florida is getting Kucherov for 9.5m

 

[seanlinden]

So why doesn't Canada ever win a cup?

MTL got close a couple times and EDM in 34 years is it? How could that be?

Are Canadians less intelligent? Do the smartest Canadians leave Canada to work in the USA? Statistically there myst be a reason for the lack of success we have here. 1/3 of the league give or take goes 0 for 34, why do you think that is if not for the cap?

It would not be that hard to create a classification. There are diplomats, ambassadors and all sorts of classifications which could be repurposed IMHO. T999 tax forum whatever.



How does Canada go 0 for 34 years without a cup? Are we just stupid business people? Maybe we are just a country of backwoods dopes. I mean, there has to be a reason for such a crazy stat

I wrote up a decently lengthy post about it earlier... copying and pasting for reference.

As for why a Canadian team can't seem to win a cup, there's quite a few reasons (beyond taxes) that are for the most part, unchangable.

1. Weather, in most of Canada, sucks during hockey season. The last truly cold-weather team to win a cup was the Blackhawks 10 years ago. Even Denver, isn't all that bad these days.

2. Hockey players tend to be pretty humble, under the radar, type of people. The best ones don't want to be the centre of attention. They don't want to get recognized walking down the street or grabbing a coffee.

3. Young hockey players in on Canadian teams get lauded as the 2nd coming, and don't neccessarily have to "earn their stripes"... look at the post-ELC contracts handed out to the Maple Leafs trio, even Elias Pettersson in Vancouver. To win a cup, you need a lot to line-up right, and that includes getting guys on bridge deals to outperform.

4. Getting into the "micro-details"... possibly because of the fan pressure, only the Oilers and Leafs have really been able to "bottom out" over a number of years to be able to get the pieces that you need to win. Edmonton has the 2nd worst weather in the league, and Toronto grossly mismanaged the contracts of those 3, along with running into some bad luck with respect to COVID.

You as a Canadian hockey fan want to see Canada's teams win more cups? Simple. Make the weather better, make sure nobody cares when one of these guys walks into a starbucks, and honestly, stop getting excited when your team gets a dynamic young player. Yes, this last paragraph is facecious.

 

[seanlinden]

I have other questions:

Why are teams limited in what % of salary they can retain? Why is it 50%? Why not 100%?

Also why are they limited in how many players they can retain salary on? Why is it only 3?

These things make little sense to me. If I'm a rebuilding team, I want to maximize the returns I get on players (and retain more). If I'm a contending team, I want to add the best players for the lowest price and will pay futures to get that.

This doesn't effect the salary cap (it's one system in the end and revenue is shared with the players).

It just makes player movement more difficult and the league less exciting.

I think the league "goal" with salary retention was to allow players to be moved, without having to resort to buyouts all the time.

I don't think the NHL really wants to see the top teams hemmoraging 2-3 years of draft classes in an arms race loading up on players retained at 100%. Increasing the excitement of the trade deadline wasn't really the "goal" of introducing salary retention.

Personally, I think it would be more interesting to do away with this "double" retention deal that now happens at the deadline to squeeze guys in that have no place being on that roster from a cap standpoint.

Maybe have a rule that says in order to retain salary on a player, they must have been with your team for 3 months.

 

[Ciao]

My spitball suggestion doesn't need to impact the League Cap.

Cap remains the same for the league.

What I suggest, again just throwing things at the wall is for example:

Very very basic:

$100mm cap.

Highest taxed teams get Cap+6%
Lowest taxed teams get Cap -6%

Pro-rate other teams that fall between the 2 extremes.

Total Cap dollars do not change.

In reality nothing is going to happen, as the league doesn't care who wins, just want it to be a good American market. Canadian and small market teams they could give two poops about.

That could work.

 

[Ciao]

Canadian players get paid in US dollar as well. If they live full time in Canada, isnt that an advantage or at least a wash in being paid in USD while spending in CAD?

I don't blame Americans though for not wanting to sign with Canadian teams when they have a choice. The covid travel restrictions & mandates soured a lot of them, not just hockey players. If it happened once, it can happen again.

If you live in Canada, you must have noticed that a car that costs $40,000 USD or $50,000 CAD, and the same is true of almost everything else except for gasoline and healthcare.

It doesn't matter what the exchange rate is, the real cost of goods and services is pretty much the same across the border.

Besides that, you can only spend so much on consumer goods.

 

[thewave]

I wrote up a decently lengthy post about it earlier... copying and pasting for reference.

As for why a Canadian team can't seem to win a cup, there's quite a few reasons (beyond taxes) that are for the most part, unchangable.

1. Weather, in most of Canada, sucks during hockey season. The last truly cold-weather team to win a cup was the Blackhawks 10 years ago. Even Denver, isn't all that bad these days.

2. Hockey players tend to be pretty humble, under the radar, type of people. The best ones don't want to be the centre of attention. They don't want to get recognized walking down the street or grabbing a coffee.

3. Young hockey players in on Canadian teams get lauded as the 2nd coming, and don't neccessarily have to "earn their stripes"... look at the post-ELC contracts handed out to the Maple Leafs trio, even Elias Pettersson in Vancouver. To win a cup, you need a lot to line-up right, and that includes getting guys on bridge deals to outperform.

4. Getting into the "micro-details"... possibly because of the fan pressure, only the Oilers and Leafs have really been able to "bottom out" over a number of years to be able to get the pieces that you need to win. Edmonton has the 2nd worst weather in the league, and Toronto grossly mismanaged the contracts of those 3, along with running into some bad luck with respect to COVID.

You as a Canadian hockey fan want to see Canada's teams win more cups? Simple. Make the weather better, make sure nobody cares when one of these guys walks into a starbucks, and honestly, stop getting excited when your team gets a dynamic young player. Yes, this last paragraph is facecious.

Some of that makes sense.

How is it that in the 60s 70s 80s Canadia teams had no issues winning. Did a switch get flipped in 93?

 

[seanlinden]

Some of that makes sense.

How is it that in the 60s 70s 80s Canadia teams had no issues winning. Did a switch get flipped in 93?

There are likely several plausible explanations.

1. Quality of information - The first NHL draft wasn't held until 1963; where 16 year old players were drafted. In those days, local scouting was huge, and you couldn't exactly see prospects on YouTube. Given the high number of players that come from Canada, the Canadian teams likely had a bit of a leg up with respect to drafting and insight.

Montreal especially, had a very strong foothold amongst players from Quebec.

2. The 90s saw a long, lengthy drop in the value of the Canadian Dollar. In late 1991, the dollar peaked around 89 cents US. By 2000 it was 67 cents. That made all but Toronto and Montreal small market teams.

3. The game in the United States expanded rapidly in the 90s. Gretzky to LA helped massively. San Jose 1991, Tampa Bay 1992, Florida & Anaheim 1993, 1993 Minnesota to Dallas, 1996 Winnipeg to Phoenix, Nashville 1998, Atlanta 1999, Columbus & Minnesota 2000.

This, combined with on-ice success of American teams (after a 7 year run of Oilers, Habs, and Flames winning), really helped elevate the popularity of the game in the states, making more of these teams "big market teams".

Today, hockey is big business, you've got a generation of players who are armed with advisors on what's the most economically advantageous place to play. Social media, and even the traditional media, have all grown to the point where now in Canada it's largely suffucating. A lot of guys realizing that they can have nice weather, no pressure, south of the border.