<h2>The NHL Salary Cap Solution, maybe!</h2>
The NHL and the NHLPA have dug in their heels and they are prepared to keep every NHL hockey fan hostage for the entire 2004-2005 season.
Like any relationship or marriage, most breakups or disagreements is 90% of the time about money and trust and let’s not rule out control. So, as Gary Bettman and Bob Goodenow are looking for the perfect solution to this lockout, and it looks as if both are determined in their stance and one way to settle this CBA is to create a 3rd party solution and call it “<b>Central Administration</b>” which would be controlled by members of the NHL and the NHLPA.
Since the main theme or Gary Bettman’s favorite word these days is “<b>systematic</b>” changes, and with both parties locked in their positions pretty strongly, then this calls for a drastic overhaul of the administrative structure of the NHL business. The players and owners realize, the NHL is in serious trouble in the United States in every aspect of the game, so to be confrontational at a time when the game is in dire need of it’s leaders to make this work for the future, they will need to have a common goal.
In fact, I would consider this business like a “Tim Horton’s” restaurant and each team would be run like a franchise with Headquarters being the “<b>Central Administration</b>” controlling all the financial, marketing and administrative duties of the industry.
First things first, you start from scratch and you set an industry budget and for a starting point, you use the Levitt report and set the budget at 2.1 billion dollars for the next playing season. With a budget in place, you set a players % of the budget towards the salaries, which would be split between all 30 teams. Instead of calling it a salary cap, you name it “<b>control salary allotment</b>” for each franchise to spend on their players. Although the players are dead against any type of cap or fixed budget, they must look at this from a competitive point of view and work to increase the “<b>control salary allotment</b>” each year. If “<b>Central Administration</b>” and the league can increase their revenue each season, then the “<b>control salary allotment</b>” budget gets increased. Bottom line, when the league increases their revenues, then everybody gets raises. In fact, a salary can be like a mutual fund, if the business makes money during a business season, then your pay gets adjusted to reflect the new percentage, ala "pro rated". However, the players and owners must realize they are starting from ground zero and work their way up.
As for the “<b>Central Administration</b>” office, the NHL and NHLPA can create two divisions, one for the Eastern Conference and the other for the Western Conference. <b>Central Administration</b> would control every financial transaction regarding advertising, salaries, season tickets and every other expense that comes with running an NHL franchise. In a nutshell, everything must get audited and authorized at <b>Central Administration</b>. Some owners might consider this a pain in the rear, but if it’s a system that works, then what’s wrong with that?
Now, you can’t control inflation from year to year and the revenue and expenses will fluctuate from season to season. Therefore, each summer you hold an annual meeting to review the financial report and from this report, you can set the budget for either the next year or the next 3 years. However, once this structure is in place, the NHL and NHLPA will have to realize the budget can go from 2.1 billion a year to 1.1 billion. Or, it can also go from 2.1 billion to 5.2 billion, s<b>o it’s a risk everybody must share.</b>
Therefore, the NHL and NHLPA along with <b>Central Administration</b> must be ready to deal with the adjustments and concentrate on getting each franchise profitable and healthy. If the NHL and NHLPA are serious about getting their house in order, then they must look at the NHL as an umbrella and that each franchise is like a spoke in the umbrella which is part of the big picture.
I feel once the NHL and NHLPA can work out the “<b>economic system</b>” and share the “<b>control</b>” of the league, then they can concentrate on other important issues such as the Shannahan summit and working on getting this game back where teams have 6 or more 30 goal scorers per team like it was in the 80’s. Plus, “<b>Central Administration</b>” can review the franchises each 3 years and if a market is not working out, then the league can retract some teams. Let’s face it, the NHL was best in the 80’s when it had 24 teams and maybe a review of downsizing a bit would not hurt the business and it might be needed to increase the revenues.
Anyway, I’m not sure this is the right solution, but I think it’s a step in the right direction and both parties can work off a similar system like a joint <b>3rd party solution</b> like “<b>Central Administration</b>” and we can get back to watching the best game in the world.
Ron Raymond
The NHL and the NHLPA have dug in their heels and they are prepared to keep every NHL hockey fan hostage for the entire 2004-2005 season.
Like any relationship or marriage, most breakups or disagreements is 90% of the time about money and trust and let’s not rule out control. So, as Gary Bettman and Bob Goodenow are looking for the perfect solution to this lockout, and it looks as if both are determined in their stance and one way to settle this CBA is to create a 3rd party solution and call it “<b>Central Administration</b>” which would be controlled by members of the NHL and the NHLPA.
Since the main theme or Gary Bettman’s favorite word these days is “<b>systematic</b>” changes, and with both parties locked in their positions pretty strongly, then this calls for a drastic overhaul of the administrative structure of the NHL business. The players and owners realize, the NHL is in serious trouble in the United States in every aspect of the game, so to be confrontational at a time when the game is in dire need of it’s leaders to make this work for the future, they will need to have a common goal.
In fact, I would consider this business like a “Tim Horton’s” restaurant and each team would be run like a franchise with Headquarters being the “<b>Central Administration</b>” controlling all the financial, marketing and administrative duties of the industry.
First things first, you start from scratch and you set an industry budget and for a starting point, you use the Levitt report and set the budget at 2.1 billion dollars for the next playing season. With a budget in place, you set a players % of the budget towards the salaries, which would be split between all 30 teams. Instead of calling it a salary cap, you name it “<b>control salary allotment</b>” for each franchise to spend on their players. Although the players are dead against any type of cap or fixed budget, they must look at this from a competitive point of view and work to increase the “<b>control salary allotment</b>” each year. If “<b>Central Administration</b>” and the league can increase their revenue each season, then the “<b>control salary allotment</b>” budget gets increased. Bottom line, when the league increases their revenues, then everybody gets raises. In fact, a salary can be like a mutual fund, if the business makes money during a business season, then your pay gets adjusted to reflect the new percentage, ala "pro rated". However, the players and owners must realize they are starting from ground zero and work their way up.
As for the “<b>Central Administration</b>” office, the NHL and NHLPA can create two divisions, one for the Eastern Conference and the other for the Western Conference. <b>Central Administration</b> would control every financial transaction regarding advertising, salaries, season tickets and every other expense that comes with running an NHL franchise. In a nutshell, everything must get audited and authorized at <b>Central Administration</b>. Some owners might consider this a pain in the rear, but if it’s a system that works, then what’s wrong with that?
Now, you can’t control inflation from year to year and the revenue and expenses will fluctuate from season to season. Therefore, each summer you hold an annual meeting to review the financial report and from this report, you can set the budget for either the next year or the next 3 years. However, once this structure is in place, the NHL and NHLPA will have to realize the budget can go from 2.1 billion a year to 1.1 billion. Or, it can also go from 2.1 billion to 5.2 billion, s<b>o it’s a risk everybody must share.</b>
Therefore, the NHL and NHLPA along with <b>Central Administration</b> must be ready to deal with the adjustments and concentrate on getting each franchise profitable and healthy. If the NHL and NHLPA are serious about getting their house in order, then they must look at the NHL as an umbrella and that each franchise is like a spoke in the umbrella which is part of the big picture.
I feel once the NHL and NHLPA can work out the “<b>economic system</b>” and share the “<b>control</b>” of the league, then they can concentrate on other important issues such as the Shannahan summit and working on getting this game back where teams have 6 or more 30 goal scorers per team like it was in the 80’s. Plus, “<b>Central Administration</b>” can review the franchises each 3 years and if a market is not working out, then the league can retract some teams. Let’s face it, the NHL was best in the 80’s when it had 24 teams and maybe a review of downsizing a bit would not hurt the business and it might be needed to increase the revenues.
Anyway, I’m not sure this is the right solution, but I think it’s a step in the right direction and both parties can work off a similar system like a joint <b>3rd party solution</b> like “<b>Central Administration</b>” and we can get back to watching the best game in the world.
Ron Raymond
