From: phhill@sn01.sncc.lsu.edu (ROBERT HILL)
Newsgroups: rec.sport.hockey
Subject: Re: Salary Cap questions
Date: 7 Apr 92 23:46:39 GMT
Article-I.D.: cs.1992Apr7.230639.26220
Reply-To: phhill@sn01.sncc.lsu.edu
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In article <AdsRGqO00iV103WF9P@andrew.cmu.edu>, am2x+@andrew.cmu.edu 
(Anna Matyas) writes...
> 
>Thanks for the answers, Gerald.  Of course more questions have
>surfaced now!
> 
>>I think gross ticket revenue, and gross television revenue, plus perhaps
>>a few other thinks go into the defined revenue for determining the
>>salary cap.  Players are entitled to a specified portion of this
> 
>*Does this mean that every team has a different cap?  In a way, that
> seems fair, but it also doesn't seem to do much for parity.  But was
> the NBA looking for parity to begin with?  (I hate that word about as
> much as "politically correct.")

     Each team has the same salary cap, which helps to promote parity.
And yes, parity was one of the motivations for the NBA adopting a salary
cap. A further question here is what does the NBA do in the way of
revenue sharing? Is there revenue sharing beyond the national TV contract?

>>> the beginning of each season for more money?  Are there a lot of demands
>>> to be traded?
>> 
>>They have free agency...a player just has to play out his contract and
>>go elsewhere...there is no need to demand to be traded.
> 
>*I was thinking in terms of players being unhappy; e.g., LaFontaine in
> New York; Tocchet in Philadelphia.  If the NHL had a cap and the teams
> that had a need for these players couldn't afford them it seems that
> everyone loses.  Maybe I'm not looking at this the right way.

     Almost all the teams in the NBA operate near the salary cap. But this
hasn't really hindered player movement. Teams which sign a high salaried 
player will trade or release other players to bring themselves below the
cap. This happens quite regularly in the NBA.

>*How did this come about in the NBA?  Was it due to spiraling costs and
> player salaries?  I assume the players association and owners had to
> agree to this?  Or is the governance of the NBA different? I have a hard
> time seeing how players could be happy with this situation.  Was the
> NBA in financial trouble at some point?

     The NBA was in financial trouble 15 years ago or so (before Magic
Johnson and Larry Bird came along). The costs of player salaries 
were certainly a contributing factor to adopting a cap. What makes it 
fair (in the players' eyes) is that I think the level of the salary cap
each year is tied to the amount of revenues brought in by the league.
This guarantees that approximately the same fraction of the leagues' 
revenues are passed on to the players in the form of salaries.
     The salary cap is part of the NBA's equivalent of a collective
bargaining agreement. The biggest difference between the NHL and NBA
is that labor-management relations are much better than in the NHL,
which in turn is a reflection of the better management in the NBA. 
Players and management were able to agree on what fraction of total 
revenues was a reasonable amount for the players to receive without
putting the owners out of business. It seems to be working pretty 
well so far.

>As an aside, while I was flipping channels last night, I saw a basketball
>game being played in a huge indoor football stadium.  (I *think* this was
>a college game; I certainly didn't leave it on for more than a few
>seconds!)  I laughed to myself that this could be the future of the
>NHL -- stadium capacities of 60,000 -- 40 home games a season at $40
>a seat.  Who would care if the fans at the top couldn't see the puck?! :)
>Basketball wasn't made to be played in a place like that.  But then,
>I don't think baseball was either.

     You probably saw one of college basketball's final four games, 
which is the culmination of their national championship tournament. It
was held in the Metrodome in Minnesota (home of the NFL Vikings and
MLB Twins). I agree that such stadiums are too big for hockey or
basketball. They aren't so bad for baseball or football though because
the playing fields are larger.

Bob