salary cap crunch

I don't have a link to this (edit: ok, found a link), I only saw it on the scrolling tsn ticker on TV.

Also, bear in mind, this is purely speculation and not fact (yet).

Due to a slumping economy and a slightly lower Canadian dollar, players will be expected to return the escrow fund which could result in a cap drop to as low as 48 million dollars.

An 8 million drop is going to be huge. And I am hugely curious to see how teams are going to get under that number should such a drop occur.

Story Here

It's on TSN. So apparently the cap will only drop to $55 million, which yes still will have an affect of teams, but it isn't much.

They (well the only one that doesn't seem to want to change is Bettman) need to relocate the struggling franchises first. Hard to argue that it won't have a positive effect.

DashRiprock wrote:It's on TSN. So apparently the cap will only drop to $55 million, which yes still will have an affect of teams, but it isn't much.

They (well the only one that doesn't seem to want to change is Bettman) need to relocate the struggling franchises first. Hard to argue that it won't have a positive effect.

Florida to Quebec City
Tampa Bay to Kansas City
Phoenix to Winnipeg
Nashville to Hamilton/Kitchener
Carolina to Harford

tell me that wouldnt help

DashRiprock wrote:It's on TSN. So apparently the cap will only drop to $55 million, which yes still will have an affect of teams, but it isn't much.

They (well the only one that doesn't seem to want to change is Bettman) need to relocate the struggling franchises first. Hard to argue that it won't have a positive effect.

The whole escrow thing is super-complicated and I don't pretend to understand it all, but here's what I can gather:

The escrow is a reserve fund of money, collected out of the players' paychecks at a set rate of something like 10% (this is a flexible figure, I think), that the NHL can draw on to balance things out in the league ("revenue sharing") whenever they get in trouble.

And trouble is coming, it seems, at least if things continue as they are for the next year or so.

Thing is, the money taken from the escrow fund next year -- now widely expected to deplete the fund altogether -- is going to soften the blow. Hence, those two different figures ($48 mil and $55 mil) for the cap. Projected league revenues would suggest a $48 mil cap, but the escrow fund kicks in and provides some protection against a sudden drop.

That will be 3 years' worth of escrow collected money used to pad one year, though, so things could get significantly worse in the 2010-11 season.

Here's a good Coles notes version of the CBA, revenue-sharing, and escrow:

http://hfboards.com/showthread.php?t=162356

Tukker wrote:

DashRiprock wrote:It's on TSN. So apparently the cap will only drop to $55 million, which yes still will have an affect of teams, but it isn't much.

They (well the only one that doesn't seem to want to change is Bettman) need to relocate the struggling franchises first. Hard to argue that it won't have a positive effect.

Florida to Quebec City
Tampa Bay to Kansas City
Phoenix to Winnipeg
Nashville to Hamilton/Kitchener
Carolina to Harford

tell me that wouldnt help

it would in theory BUT some of those cities deserve their teams so....

Florida to Quebec City - YES, DO IT SOON
Tampa Bay to Kansas City - Give them more 3 years
Phoenix to Winnipeg - They've got a good thing growing there...6 years more,
Once their young gun mature, they'll be a good team. Americans love winners.
Nashville to Hamilton/Kitchener - VERY underestimated hockey market, they've saved their team a couple of times.
Carolina to Harford - YES, DO IT....but not to hartford...winnipeg.

it seems they editted that article a bit since my first read.

and that seems to make a lot more sense that the cap would only drop by about a million, since 8 million is quite an insane drop for one year.

but apparently this year is going to cost them all of their escrow money, although i wonder if that includes their "reserve" or just this year.

anyways, i guess this is where the smart GMs will really earn their money.

Tukker wrote:

DashRiprock wrote:It's on TSN. So apparently the cap will only drop to $55 million, which yes still will have an affect of teams, but it isn't much.

They (well the only one that doesn't seem to want to change is Bettman) need to relocate the struggling franchises first. Hard to argue that it won't have a positive effect.

Florida to Quebec City
Tampa Bay to Kansas City
Phoenix to Winnipeg
Nashville to Hamilton/Kitchener
Carolina to Harford

tell me that wouldnt help

WOW!! I'd have a hard time staying a Sens fan with Nashville in Kitchener. (don't hurt me!)