Salary cap won’t go up to $52 million
I previously linked to a report in the NY Post that the NHLPA was going to ask for a 5% bump in the cap, which would have been around $52 million based on gross revenues. The same newspaper has printed another update suggesting that the salary cap will probably only go up to $48.5 million. Unfortunately for the Wings, that limit would prevent them going after a big name free agent like Ryan Smyth (not like it was a high probability anyways).
Slap Shots has learned that the PA has been informed by the league that the players will suffer an approximate 2-3 percent escrow loss for the 2006-07 season, with the NHL calculating that it paid out between 57-58 percent of HRR, as opposed to the 55 percent to which the union was entitled. You should know that MLBPA head Don Fehr and assistant Michael Wiener last week urged the NHLPA to hire a full-time forensic accountant during the meeting in Toronto reported by Slap Shots.
According to figures supplied to the NHLPA by the league, total 2006-07 NHL payroll amounted to $1,266,388,151 for a total of 791 players. Every time a player goes on the long-term-injury or injured-reserve list and a reinforcement is recalled from the minors, every player in the league pays. When Glen Sather decided to keep Sandis Ozolinsh on NHL IR rather than dispatch him on waivers to Hartford, every player in the league paid for the GM’s largesse.
If the league payroll of $1.266 billion accounted for approximately 58 percent of the gross available to the players, this means that the league’s HRR (plus benefits) was thus in the neighborhood of $2.25 billion. It also reminds us that when league officials announce projected revenue totals, they are citing gross dollars, not those that will necessarily be utilized in the calculation of the cap.
Indeed, one PA official told Slap Shots on Friday that Gary Bettman’s recent proclamation that 2006-07 revenues would be close to $2.4 billion “is disconnected” from 2007-08 cap reality. Fact is, even if the PA does, as expected, assert its right to build a 5-percent bump into next year’s cap (according to a union source, the 5-percent bump is a default number unless waived by both parties) it now appears that next year’s upper limit will be no higher than $48.5 million.
Spector reminds us that there is a way for teams to go above the cap by 7.5% through bonuses for veteran players. The Wings can definitely use this clause with players like goaltender Dominik Hasek and defenseman Chris Chelios.
The Post story also noted teams could legally exceed the salary cap by 7.5 percent by signing players over 35 years old to short term, incentive-laden bonuses.
The paper used Brendan Shanahan as an example, noting he could re-sign with the Rangers to a one-year base salary of $2 million along with $2 million of bonus clauses that would pay him similar to last season’s $4 million salary without adversely affect the Rangers cap.
MLive.com hockey blogger George James Malik suggested that could work to the advantage of the Detroit Red Wings, using that clause to squeeze in bonuses for over-35 players like Dominik Hasek and Chris Chelios.
Ultimately, it appears the cap for 2007-08 could only exceed the original estimate of $47.5 million by $1 million.
Bettman & Daly are given raises
It appears that both Gary Bettman and Bill Daly got some pretty nice raises.
His [Bettman] salary remains a fraction of what other executives earned, according to each league’s most recent tax filing (see chart). It’s also 50 percent less than what NFL Commissioner Paul Tagliabue made at his peak ($11.6 million, as reported in 2003), and 60 percent less than what MLB Commissioner Bud Selig made last year.
“It looks awful when senior executives are paid when the public is suffering from the diminution of the sport, but … it’s in line with the other major sports, given the (NHL’s) franchises, the TV audiences and the attendance,†said Stephen Unger, a sports compensation consultant with KSMU in Los Angeles.
Daly, who was lead negotiator during the lockout, was rewarded, as well. His promotion from chief legal officer to deputy commissioner came with a 215 percent raise for the fiscal year ending June 30, 2006. His total compensation reached $2.78 million last year. That number reflects a $113,126 contribution to his retirement plan.
I know the owners are trying to reward the two for their winning efforts during the lockout. However, it seems most fans like myself don’t think Bettman is deserving of this raise. Ratings are falling due in part to the NHL signing a TV contract with Versus. The league is considering expanding. Again. For the most part, the NHL has been the fourth professional sports team in the US. Other sports and leagues are starting to overtake the NHL in this area.
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