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AppState_mj

Canes salary cap

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my friends and i have debated this, and i'd like to get some others' feedback also. each year i know the canes have a "self imposed" cap, which is less than the league salary cap. so, is this:

A.) done out of necessity because we are a small market team? would we really lose money if we spent to the cap?

or

B.) because they are just being cheap, and are more concerned with making profit than competing for championships?

i have a hard time believing all the typical owner-speak about losing money. team owners in different leagues claim that all the time. look at the nba right now. their labor agreement is set to expire, and all of the sudden we are hearing about how owners are losing hundreds of millions of dollars. what a coincidence. how is it that these guys who can make billions in other industries claim they are always losing money on the sports franchises they own.

this has really been bothering me lately, because as fans, we give our complete devotion and loyalty and dedication to the canes. we give them all WE have to give as fans. and i am not sure if they are doing the same in return. are they doing everything they can to win championships? including spending the money to bring in the best players? i look at this team and the canes teams in recent years, and see a budget team with players who are either role players, young guys not in their prime so they don't make a lot of money yet, old guys who are over the hill, and guys nobody else really wanted. staal and ward excepted. it's like having a nice car and a nice tv and getting the rest of your things from wal mart and goodwill. we have chad larose on our first line. chad larose. if we spent the $10 million we have a two top 6 wingers, we wouldn't be significantly better.

if this organization is not doing all they can to win, then they aren't holding up their end of the deal. everything else is forgivable...bad trades, bad draft picks, bad coaching decisions, etc etc....but not winning because they are being cheap and won't spend money is not. because then they are not trying to win. they are just trying to make money. i just wonder if they canes care about us as much as we do them.

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Interesting question but I do not know if the extra dollars would translate to a better product on the ice. A survey of pro teams that are laden with high priced talent doesn't always translate to winning teams. I do wish Karmonos was more open with the balance sheets.

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IIRC, we were up against the cap for the better part of last year. To answer your question, it's a little from column A and a little from column B. As you point out, the Canes are a small market team, and that means it is harder to fill the building on a nightly basis. Because of that, the Canes CANNOT be at the cap every year, at least not until we either keep attendance above a certain threshold and/or the average ticket value is above a certain threshold. Have you seen attendance? These are the average yearly capacity percentages over the last 10 seasons, including this season to date.

Numbers are based off ESPN's average attendance volume records and assuming capacity is (and always was, even though I know it's not true) 18,176.

canesattendance.gif

(sorry for having to use imageshack, I don't have an FTP client right now so I can't use my own website)

Although this season looks good so far, there's a lot of uncertainty. It's been on a downward slope ever since the cup year. Unless we can continue to improve attendance and accept higher ticket prices, PK isn't opening up his wallet. He has proven he will do it if he thinks we're legit (he did in 06, and even last year when we were against the cap BEFORE the 1800 game losing streak).

I too would like to see the balance sheets but there are a couple of unavoidable facts we faced with.

1) Small, non-traditional market

2) Economy is still up in the air

3) Like or not, it's a business and yes they need to make money

4) We have cheap tickets compared to many other teams

5) Sellouts are few and far between

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So many issues and none is as 'black and white" as, spend more, win more. Or 'spend more" means the owner cares more about winning.

1.http://www.hockeybuzz.com/cap-central/

There is not much relation to spending and winning( see jersey and calgary as top spenders and not winning, colorado, st louis and phoenix as low spenders but winning)

.We spent to the cap last year and failed, had space in 2005/06, and won the cup.Money is not always the answer or shows a thing. I do not beleive any owner in any sport doesn't want to win- because winning besides the ego boost winning comes with, also a huge financial windfall of merchandise sales and seat sales- and no business owner doesn't want that.

2. The Local market:

The cap is based on total revenue of the league and players getting 52-57% of revenue( which is the cap), which drastically favors the larger marktet teams

PLAYERS' SHARE OF LEAGUE REVENUES

What will be the players' share of League-wide revenues?

The players' share will be 54% to the extent League revenues in any year are below $2.2 billion; 55% when League revenues are between $2.2 billion and $2.4 billion; 56% when League revenues are between $2.4 billion and $2.7 billion, and 57% when League revenues in any year exceed $2.7 billion

So For the big market teams, NY, chicago toronto, philly etc, the 'cap" number is something they easily have the revenue to sustain paying it and STILL making a profit for the owner. Whereas, the smaller market teams like Carolina do not have the revenue sources( local tv , ticket etc), to achieve a profitablity at the cap number in most years, unless have a long playoff run. It is not a sustainable economic model.

3: Ticket prices:

This is Probably the hardest and most controversial.Unlike football Where most of the shared revenue is from national TV contracts, and ticket prices are artifically held real low( see stub hub for tickets being 2X-3X in big market teams ), to keep buildings full. The NHL relies on ticket revenue for a much larger part of the Revenue( 40 games vs 8 in football and 1/20th the tv revenue) model for the Cap and business model.So teams in smaller markets have to play a very tough balancing act each year. If the team want to reward its 'fans" with stable or lower ticket prices( while cap is still rising each year)as "fans" say the team didn't win champiionship, so it shouldn't raise them- only way to do this is to not spend to the cap number the big teams with much higher ticket prices and usually much larger season ticket holder and more importantly corporate sponsership and much, much higher luxery box revenue can easily do without hurting the financials.

So Would you rather pay 20-30% more for your tickets, to make up for the revenue lost to the big market teams so the team spends to the cap to start? Or pay less to start a year- and if the team 'gels" make a move or 2 for higher priced talent at trade deadline for a playoff push, that can be economically justified based on playoff revenue and higher gate attendance?

Think most would prefer choice "B", which is where we are now.

The Cap Model can work and much better than baseball's where free spending kills any chance the pirates, royals, etc ever have of sniffing the playoff's before a year begins and even if a small market teams( ie tampa or marlins) does well, its immediately dismantled and sold off to the highest bidder which really sucks for the fanbase. You just have to realize the limitations to Start and realize like all in the world, never a perfect model and accept both the Pro's( lower ticket prices and more access to players and team) and Cons( always in a financial struggle, can't compete all the time with top revenue teams for players) of being a Small market team.

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I understand the lack of sell outs and lower ticket prices, and the lack of corporate sales. That makes sense.

The tired line about high payrolls not guaranteeing success though is ridiculous. I'm too lazy to look it up, but one of you showed a table of the teams the most below the cap and it was a who's who of non-playoff teams, and cellar-dwellers. Also, it is too early to write off NJ and other teams that might still make a run, al la Philadelphia last year.

Look at the cup winners and contenders going back. Not a lot of bottom of the barrel payrolls. That is the exception, NOT the rule.

It defies face validity to say that adding two top level first line wingers would not make this team better. Come on. I love Chad LaRose, but first line?

I understand that we probably need to save some money at this point. And we do need room to get our prospects on the ice. But if the team is within spitting distance of the playoffs near deadline time, then JR should get the best first line winger money can rent and make a run at the playoffs. Because that creates fan interest and fan loyalty for the long run. I'm ok with where we are now as long as we make a move for at least one top forward rental at the end.

However, if we are within eyesight of the playoffs near the deadline and JR just fiddles with some washed up guy on waivers, the smell of cheapness will permeate and even I will waiver in my fandom.

Edited by remkin

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PK is also trying to sell 49% of the team to local investors, and that requires a balance budget sheet. No one is going to put money into a company with this economy with the accounting books all in red ink. Now when it is sold, and we have a good idea at the end of the year what to expect with our rebuild efforts, you will probably see the purse open up.

Also, at the end of this season there will be a lot of signing to do. That is going to require some wiggle room so why handcuff us with deals now and not have any room for negotiations...

My take anyways.

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One must remember that hockey is still a relatively unknown product in the area. State and Carolina just played their 100th game. The Habs celebrated their 100th anniversary a few years ago.

Canes marketing has the difficult task of getting butts into seats for at least 40 games per year. Long term, the best solution seems to be fielding a competitive team year in and year out that can showcase the sport but not breaking the bank by fielding a team of superstars that are always on the look for the best contract.

Without a television and apparel contract, it doesn’t make sense for owners of teams such as Nashville, Columbus, and Carolina to spend to the salary cap limit. For owners of teams with a long history and a strong fan base, it makes much more sense. The best thing the Canes can do is to build the fan base. When today's youth hockey players grow up and become paying fans, the sell-outs will come and it will make more sense to field a team of superstars

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It defies face validity to say that adding two top level first line wingers would not make this team better. Come on. I love Chad LaRose, but first line?

I understand that we probably need to save some money at this point. And we do need room to get our prospects on the ice. But if the team is within spitting distance of the playoffs near deadline time, then JR should get the best first line winger money can rent and make a run at the playoffs. Because that creates fan interest and fan loyalty for the long run. I'm ok with where we are now as long as we make a move for at least one top forward rental at the end.

remkin we are on the same page- I do think we need another scorer on the top line and chad off it, he's a fan favorite,but not a top scorer.But understand the the budget side 'for now", and as said in my earleir post, Rutherford has always shown a knack for getting players if think we can make a playoff run:

2002- we acquire hedican, weekes and k adams all who played big parts in the 2002 cup run

2006- we acquire both doug weight and mark recchi to bolster the PP and both played big parts in the stanley cup championship run

2009- we acquire jussi and reacquire erik cole to bolster the PP and both play a big part in the playoff run

So do think JR has the history and will acquire some "O" talent after january to help the team with a playoff run

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However, if we are within eyesight of the playoffs near the deadline and JR just fiddles with some washed up guy on waivers, the smell of cheapness will permeate and even I will waiver in my fandom.

Remember Scott Pellerin?

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