Much has been made of the $6.5 million bridge that could not be gapped yesterday, leading to the cancellation of the NHL season. People on all sides are angry that such a small difference could not be made up.
Was it really a small difference, however?
Bob Goodenow’s angry reply to Gary Bettman’s ultimatum on Monday suggested that the commissioner’s comments about the difference actually totaling $200 million ($6.5 million x 30 teams) was out of line. Bob stated that only nine teams even spent up to $42.5 million, so it was ridiculous to argue that all teams would spend up to that limit.
Bob is correct when he suggests only a handful of teams would be able to spend up to that cap. However, Bob ignores the trickle down effect that this would cause. The NHL would be facing the exact same situation that killed the league in the last CBA, albeit on a smaller scale.
Toronto (as an example) will be spending up to the cap, no matter what the cap. They will be spending it on just 23 players. The end result is that those 23 players would be worth $6.5 million more in the NHLPA’s proposal than it would the NHL’s. Actually, they would be worth as much as $11.9 million more if you count the provision allowing teams to surpass the cap by 10%.
While the Hurricanes (as an example) will never spend up to the cap, they will be adversely affected by any extra spending the top teams are allowed. For as player x on the Maple Leafs gets paid more in a higher cap, the union will argue that player y on the Hurricanes with similar stats should make more as well. The continued presence of arbitration will work to cement this belief, and the Hurricanes are stuck with a contract that would make sense in Toronto, but not Carolina.
Bob Goodenow knows this, and this is why he has spent the entire lockout trying to play to the rich team’s abilities. The rollback benefits the rich teams more than any other group. The luxury tax benefits the rich teams more than any other group. The higher cap benefits the rich teams more than any other group. The provision to go 10% above the cap benefits the rich teams only.
Bob Goodenow does this because he knows that the rich teams will set the market for all teams. So while only the likes of the Maple Leafs will spend that extra $6.5 million up to the salary cap, it will force the likes of the Hurricanes to spend up from $30 to $36.5 million.
Bettman was dead on when he called the cap a magnet. It is magnet that pulls everybody higher.
Bettman was also correct when he characterized the difference between the two offers as being $195 million.
Except that it is worse than you think. Over the course of a six year deal, that difference works out to nearly $1.2 billion.
And that is without touching all of the loopholes the union wrote into it’s cap offer designed to inflate the salary cap itself as fast as possible – including, ironically, linking the cap’s upward movement to league revenues – while offering no possibility of lowering the cap for any reason.
While one might think they were close to a deal, the reality is that well over $1 billion stood between us and a hockey season.
