The Blueline Report: $19 million salary cap gap between NHL and NHLPA proposal

As Don Fehr and Gary Bettman resume negotiations this week, the rhetoric between the two sides has been interesting but not surprising with Bettman touting the revenue sharing plans in the NFL and NBA, while Don Fehr has spoken pretty highly of baseball’s revenue sharing system as he has been touting baseball’s model quite frequently in the past week.
Just how far apart are the two sides can be looked at the $19 million gap each proposal has for the salary cap in 2012-2013. Under the NHL’s proposal, the salary cap would drop to $50.8 million next season (Numbers via Canadian Press), and would be roughly $20 million less than the summer cap of $70.2 million, while the NHLPA’s proposal would have the salary cap at just north of $69 million and would increase in 2013-2014 and 2014-2015.
The NHLPA’s proposal falls right in line with the tentative cap in place now of $70.2 million.
Only two teams, the New York Islanders and Phoenix Coyotes are under $50 million in committed salaries for 2012-2013.
The NHL’s proposal is a drastic proposal designed to slow players salaries, while word around the league is that wealthy owners shot down the NHLPA’s proposal immediately last week when the proposal was received and clearly designed for wealthy teams like the Rangers, Leafs and Canadiens to bail out the poor and struggling teams. I’m told the big market owners strictly see the NHLPA’s proposal leading to a scenario in baseball where a number of small market teams pocket the money and don’t consistently try to win. Personally, I don’t like either proposal much. One reason I don’t see players caving like NFL players did last summer is that most NHL players actually save their money well and don’t live paycheck to paycheck and also have overseas options to be compensated well financially in the event of a lockout.
Meanwhile, one team that is losing money but goes about business the right way is the San Jose Sharks who reportedly lost $15 million last season, despite selling out every game and consistently trying to build a Cup contender every year.
The Sharks’ parent company said this summer that it lost $15 million last season despite selling out every game. But the disclosure — coming shortly before the start of NHL collective bargaining talks — wasn’t as surprising as the group’s response, ” Pollak writes.
“We’re OK with that because that’s a decision we’ve made to stay competitive,” said Kevin Compton, referring to the fact his team’s player payroll bumped up against the NHL salary cap.
A franchise valued by Forbes magazine at $211 million operates with no CEO or president.
“We’ve taken out a few layers (of management) in the organization, and that makes it faster to get decisions made,” said Stratton Sclavos. The owners, according to Pollak, say the Sharks are debt-free. Instead of turning to banks to cover operating losses, they turn to one another with annual cash calls. “We’re a completely liquid organization and so far have continued to fund operations by choice,” Compton said. “This isn’t Phoenix.”
— Check out “The Blueline Report” by lead NHL analyst Will DePaoli every Monday, Wednesday and Friday’s at Insidepittsburghsports.com–

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William DePaoli

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William DePaoli is the President/Founder of Inside Pittsburgh Sports LLC and can be reached at wdepaoli@insidepittsburghsports.com

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