The View From Wisconsin

Just a random set of rants from a Sports Fan from Wisconsin.

Tuesday, January 11, 2005

Another Modest Proposal

Yet again, another NHL CBA proposal:

TERM OF AGREEMENT

This agreement shall expire August 31, 2011, and may be extended beyond such time by mutual agreement of both the NHL and NHLPA before that date.

Salary restrictions and requirements shall not begin until July 1 following the ratification and approval of this agreement.

SALARY CAP SYSTEM

All salaries would be placed, starting with the 2005-06 season, in a "tiered contract" system.

Each team, on or before the Monday before the first regular season game of the season, must allot each player's contract into a "salary position" in each of the given contract Tiers.

Salary Positions in this system would be figured in the following manner:

a.) A player's base salary for a given year would be figured, including bonuses and awards.
b.) Bonuses and awards may not exceed more than one-half of a player's base salary for a given year.
c.) Signing bonuses may not exceed one-half of the player's first-year base salary.
d.) The total amount of bonuses and awards paid out from a previous season may be spread out over the remainder of the player's contract. For example, if a player was given a $1 million signing bonus for a five-year contract, the amount of that bonus can be spread out over the entirety of the contract; it would increase his "cap figure" by $200,000 for each season of his contract.
e.) Monetary compensation for League Awards (Hart, Vezina, Norris, etc.) are determined and awarded by the league, and are not subject to any cap or tax penalties. The league shall announce the amounts of these monetary awards at the completion of the regular season.
f.) A player may not defer more than 50 percent of his total salary over the length of a multiple-year contract to any one season of the contract, nor may he defer more than 75 percent of his total salary to the second of a two-year contract. (This rule, obviously, does not apply to a one-year contract.)

There would be five contract tiers, with a strict upper limit on three of the tiers.

Tier I would be the "Franchise Player." His salary would be completely unrestricted, and not subject to a salary cap. Only one player per team may have his "salary position" placed in this category each season. His salary may not be dropped to a lower Tier at any time during the season, unless traded or released according to the terms of this agreement.

Tier II would be any player with a "salary cap figure" of $7 million or less. No team may have more than seven (7) such players in salary positions in this Tier in a single season.

Tier III would be any player with a cap figure of $4 million or less. No team may have more than seven (7) such players in salary positions in this Tier in a single season.

Tier IV would be any player with a cap figure of $2 million or less. No team may have more than seven (7) such players in salary positions in this Tier in a single season.

Tier V would be a "floating" salary position that a club may choose to add to any of the previous three Tiers for an entire season. The team must keep this extra salary position in the stated Tier for the entire season, and may not use the extra salary position in that Tier in either of the following two seasons.

EXAMPLE: A club has one "franchise player" making $7.5 million. They declare seven players, each who have a salary position between $4.1 and $7 million, as their Tier II players. They declare an additional seven players, each who have a salary position between $2.1 and $4 million, as their Tier III players. The remaining players on their roster, who all have salaries of $2 million or less, are designated as Tier IV players. The club uses its Tier V position as an extra position in Tier IV, placing their #1 draft choice from two seasons previous in that position. In the following season, the club would have to use the Tier V salary position in either the Tier II slot or Tier III slot.

No player who is in his initial NHL contract may have a single-year cap figure greater than $2 million (e.g., he must remain in a Tier IV salary position for the entirety of his contract).

If a player is placed in a "salary position" that is actually greater than his cap number – i.e., a player with a cap number of $3.5 million is placed in a Tier II salary position – the player is entitled to a minimum of $500,000 in additional compensation, pro rated over the course of the entire year based on the number of games played by the team while he was in the higher salary position.

If a player is placed in a higher salary position two seasons in a row, he shall automatically receive an increase in pay so as to be paid at the higher salary position rate. For example, if a player whose cap number was at $3.5 million was placed in Tier II for a second consecutive season, he would automatically receive a salary increase so his cap number would be a minimum of $4 million.

If a player making less than $7 million is given the "franchise tag" for any season, his salary will automatically increase the following season to a minimum of $7.1 million (if it is not already contracted as such) and remain as the club's Tier I player for the entire season.

Players may move down or up from a salary position in one tier to a different tier (except the "franchise tag" player) during the season, but may not move in either direction more than once during the season, and may not move to a tier that his cap number would not allow him to move into.

Players who are signed or otherwise acquired after the "holiday roster freeze" is lifted on the first Monday after the first Sunday in January will not have their salaries count against either the cap or the luxury tax; however, there is a limit of three such players that may be signed in this manner.

LUXURY TAX

To prevent a team from fielding a "maxed-out" opening night lineup of 22 players at the maximum allowable payroll of $98 million, plus the franchise player's salary, a series of luxury tax brackets shall be set up to discourage this practice.

The luxury tax shall also include a penalty for "underspending"; that is, fielding a club of players making the league minimum in each "salary position".

The tax shall be assessed at the beginning of each NHL season, based on a team's roster at that time.

The tax brackets shall be as follows:

Payroll Amount and Tax Rate
$11.5 - $20.0 million: 100% of amount under $21 million
$21.0 - $40.9 million: NO TAX
$41.0 - $50.9 million: 50% of amount over $41 million
$51.0 - $60.9 million: 75% of amount over $41 million
$61.0 - $70.9 million: 100% of amount over $41 million
$81.0 - $90.9 million: 150% of amount over $41 million
$91.0 - $98.0 million: 200% of amount over $41 million


Clubs may not release players to get their salaries to a lower/higher tax bracket until three days after the completion of the club's regular season (if a non-playoff qualifier) or the completion of the club's playoff season (if a playoff qualifier).

Taxes are payable in full to the league by July 1 of the given calendar year following their assessment. Failure to pay the tax amount shall result in interest accrual at the rate of the United States Federal Reserve's prime lending rate as of July 1, plus 5%, compounded annually.

The amounts of tax penalties shall be placed into a Revenue Sharing fund for distribution to teams with the five lowest total revenues (as determined by a league-appointed auditor, and approved by the NHLPA) for the previous season.

A club may not collect from the Revenue Sharing fund for more than two consecutive seasons, nor may they collect from the fund if they were required to pay into the fund in a previous season, nor may they collect from the fund if the club is on probation for salary-cap violations (see below).

FREE AGENCY

Players may declare unrestricted free agency at the completion of his contract after completing a minimum of 10 games played (or 2 games in goal) in each of five NHL seasons.

Any player in his inaugural NHL contract may sign a contract shorter in length than the five-year rule, but shall be a restricted free agent in that:

(a) The player's salary may not exceed that of a Tier IV player, and
(b) The team that signs the player loses a draft choice, based on the player's previous-season salary.

Previous Base Salary / Compensation
$500,000 - $1 million / 3rd round pick
$1.0 - $1.5 million / 2nd round pick
$1.5 - $2.0 million / 1st round pick

Once a player has met the requirement to become an unrestricted free-agent, he may declare free agency again at the completion of any ensuing contracts.

SALARY ARBITRATION

Player who are in the final season of their contract with a team (regardless of eligibility for free agency) may choose to file for salary arbitration for that season.

Players must file for arbitration by August 1 of the year their final season is scheduled to begin.

Should a player choose arbitration, the player and the club shall submit salary proposals to the arbitrator, subject to the following restrictions:

(a) Neither the player nor the club may request an increase of more than 10% of the player's previous-season salary;
(b) Neither the player nor the club may request an increase that would cause the club to violate the Salary Tier rules listed above;
(c) The club may choose to request a decrease of no more than 5% of the player's previous-season salary.

The arbitrator shall choose either the club's salary proposal or the player's proposal; he or she may not "split the difference" between the two.

A club may also, after two seasons have been completed in a minimum three-year contract with a player, choose to file for arbitration for a salary reduction ("reverse arbitration").

The club must file for this arbitration by July 15 following the player's second contracted season with the club.
A club may only initiate arbitration twice a season, and only once per player over the duration of their contract.

Should a club choose arbitration, the player and the club shall submit salary proposals to the arbitrator, subject to the following restrictions:

(a) The club may not request a decrease of more than 10% of the player's previous-season salary;
(b) The club may not request an increase in the player's previous-season salary;
(c) The player may not request an increase of more than 5% of his previous-season's salary;
(d) Neither the player nor the club may request an increase or decrease that would cause the club to violate the Salary Tier rules listed above.

As with regular arbitration, the arbitrator shall choose either the club's salary proposal or the player's proposal; he or she may not "split the difference" between the two.

In either situation, the club or the player may choose to "walk away" from the arbitrator's decision; however, the club may not choose this option in more than half of the arbitration cases it is involved in during a given arbitration season; also, the player may not "walk away" from a club-initiated decision if he submitted a salary increase greater than his previous season's salary.

Arbitration hearings shall begin on the first Monday after the first of August, with team-initiated hearings scheduled first and player-initiated hearings afterwards.

Any contract settled between players and teams after arbitration has been filed and before the hearing may not be used in any future "comparison" of contracts in arguing an arbitration case – either by teams or by players.

GUARANTEED CONTRACTS

All NHL contracts for players who have played in at least two NHL seasons of 10 games on the roster in each season shall be guaranteed for the duration of the contract.

Should a player not reach these two minimum requirements, the club shall have the option to release the player from said contract at any time, and shall not be required to pay any amount beyond a severance fee of $500,000.

For players on "two-way" contracts who do not play in the NHL, contract guarantees do not initiate until they have been on the active roster in the American League for a minimum of 40 games in a season, or 20 games in two separate AHL seasons.

Undrafted, unsigned players who are signed by an NHL club after completing five seasons of professional hockey in North America (using a formula to be determined by the PHPA for the NHL) shall have their entire contract guaranteed upon being on an NHL active roster for a minimum of five (5) games.

CAP COMPLIANCE

Teams failing to comply with these restrictions on player "slotting" will be penalized based on the Tier violated and on occurrence.

Tier IV violations
First: $2 million fine, Loss of 1st/2nd pick in next Entry Draft (ED)
Second: $4 million fine, Loss of 1st/2nd/3rd pick in next ED
Third: $6 million fine, Loss of 1st/2nd/3rd pick in next ED, Loss of 1st/2nd in following ED

Tier III
First: $4 million fine, Loss of 1/2/3 pick in next ED
Second: $8 million fine, Loss of 1/2/3 in next ED, Loss of 2/3 in following ED
Third: $12 million fine, Loss of 1 in next ED, Loss of 1/2/3 in following ED, PROBATION

Tier II
First: $7 million fine, Loss of 1/2 in next ED, Loss of 1/2 in following ED*
Second: $14 million fine, Loss of 3/4 in next ED*, Loss of 2/3 in following ED*, PROBATION
Third: $21 million fine, Loss of 1st in next ED*, Loss of 1/2/3 in following ED, Extended Probation

Tier I
First: $10 million fine or salary cap figure amount of highest paid player (whichever is greater), Loss of 1/2/3 in next ED, Loss of 2/3 in following ED*, PROBATION
Second: $20 million fine or DOUBLE salary cap figure amount of highest paid player (whichever is greater), Loss of 1st in next ED*, Loss of 1/2/3 in following ED, Extended probation
Third: "DEATH PENALTY" (SEE BELOW)

* - This is in addition to penalties from previous violations.

Clubs placed on probation would not be able to commence with any signings or any trades without the prior approval of the league office for one season. Clubs on "extended probation" would not be able to do any signings or trades without league approval for a period of two seasons.

The "Death Penalty" would result in the revocation of the club's position on the Board of Governors, and the remanding of the franchise to the league. The league would operate the club until a new buyer could be found.
If teams make multiple violations, the penalty for the greatest violation will be implemented.

OTHER ISSUES

The league agrees to a "no contraction" clause for the duration of the agreement, which would prevent them from arbitrarily deciding to terminate the franchise of any member club without the approval of the entire NHLPA.

Should a franchise terminate due to financial, legal or other extenuating circumstances, the league shall guarantee operation of the club through the completion of the existing league schedule. At the completion of the club's season, the players on the affected club whose contract extends into the following season shall be declared unrestricted free agents, and shall be able to sign with any other team. In such instances, the player's salary and cap number shall NOT be subject to the Tier or taxation systems for the following season for the franchise signing him, so long as the terms of his original contract are met.

The NHL and NHLPA shall form a Rules and Welfare Committe, comprised of two members of the Board of Governors, two general managers, two coaches, two players, two goaltenders and two members of the hockey media, who shall meet together a minimum of three times a year (and at least once during the season, at the All-Star break) to review and propose rules and policies for the good and betterment of the league. The proposals presented by this committe shall be presented to the Board of Governors for approval or disapproval. Individuals on this committee serve at the pleasure of their respective nominating organizations, and may not remain on the committee longer than four seasons at a time.

For a period of one month following the adaptation of this agreement, teams shall provide at least five (5) separate functions where the cost of entrance for fans shall be no greater than $10. The functions may be any or all of the following (but at least three of the following):

  • An exhibition game where the maximum ticket price is $10, and at least half of the tickets are priced below $5;
  • An open practice at the team's home arena where admission is free;
  • A free autograph-signing session with the players;
  • A regular-sesaon game with drastically-reduced-cost concession items ($1 for sodas, hot dogs, pizzas, etc; not including alcoholic beverages or club-level menu items);
  • A two-for-one ticket voucher, where any fan purchasing a ticket for a given game would also be able to purchase a ticket for any other game for free.