If The Cap Doesn't Fit You Must Quit it
The way they spent money the past week in the NBA and NHL you’d have thought Kathleen Wynne had found another way to tax Ontarians.
After a period of relative salary sobriety, NHL and NBA general managers embarked on a spending spree that sank economic restraint. At least NBA GMs had an excuse. Fuelled by a $24.1 million bump in the NBA salary cap, teams could award untold riches to seventh- and eighth-ranked players on the roster. That’s what happens when you get $2.7 billion US a year for your TV rights.
The NHL has no impending TV windfalls, having inked a 10-year deal in 2013 with NBC (at $200 million US/ season) and a 12-year deal with Rogers Sportsnet (at $433 million US/ season) in 2014. But with Las Vegas expansion money burning a hole in their pockets, many NHL teams engaged in “I’ll gladly pay you Tuesday for a hamburger today” financing on aging vets, role players and other nondescript free agents.
The entire process reminds us that some sports executives are playing chess while the rest are playing checkers. Veteran NHL exec Harry Sinden remarked, “Most owners and GMs forget that there are 30 teams but just one Stanley Cup.” As the expression goes, Boston giving 32-year-old David Backes a five-year deal worth $30 million represents the triumph of optimism over experience.
More striking than the profligacy of the season is the overwhelming evidence that the salary caps governing pro sports teams in North America are not working. In fact, they’re ruining a good thing by often producing exactly the opposite effect intended.
The salary-cap concept, which is unique to North American sports leagues and Venezuelan politics, is a construct designed to keep the stars of the game from being paid what they’re worth. For almost a century that was accomplished by reserve clauses— in concert with friendly judges. Players were indentured to the team that held their rights.
In the 1970s, athletes in baseball were finally allowed unlimited free agency. The experience of owners competing in a free market for star players proved a boon for the stars and the bane of owners. Ginning up some good ol’ class-resentment, desperate owners told fans that if stars were allowed to get market value, the contracts would bankrupt their favourite teams . Ergo, a lockout of players is their fault. So get mad at them.
Through countless strikes and lockouts, leagues leveraged public sentiment to restrict the ability of athletes to get market value. In concert with the draft system, this has produced a financial straight jacket that kneecaps franchise players while wildly overpaying the spear carriers who fill out the roster.
With caps on the top players, teams can keep them at the spending level of a mid-sized franchise, not what the greater market would bear. Term, not dollars, becomes the guiding principle. With the stars almost never moving from their original teams, all the financial pressure then moves down the bench to secondary stars, role players and guys who just wear a uniform.
If you want to know what that looks like, check out the seven- and eight-year deals won on July 1 by players who can only be supporting players, not franchise stars. Can you say Milan Lucic? Lucic. who was signed by Edmonton, will likely join the ranks of the contract undead when his body gives out before the contract term does.
The other stated goal of salary caps is to force the best teams with the most progressive managements to shed their advantages by trading/ selling off players when the cap fits too tightly. The Chicago Blackhawks are a great example, as they head into a third overhaul of the players around their winning core. Since their first Stanley Cup this decade, they’ve had to dump a virtual All Star team: Dustin Byfuglien, Brian Campbell, Troy Brouwer, Andrew Ladd, Dave Bolland, Michael Frolik, Nick Leddy, Brandon Saad, Patrick Sharp, Johnny Oduya and Teuvo Teravainen.
The logic behind this is to keep a boatload of uncompetitive markets in play for the playoffs, propping up Columbus, not Chicago. Or Winnipeg, not Montreal. A full stable of franchises made sense in the era where franchise fees and local TV were the backbone of the business. But as soccer demonstrates with its star-laden system, today’s model is fuelled by TV, digital and global brand promotion. In short, no one gives a damn about Cincinnati or Calgary winning a title. Gives us New York, L.A. or Toronto.
As mentioned earlier, soccer has maintained a pay-for-play model that captures a global following, creating dynamic properties. Even here in North America, fans know Rinaldo and Messi, Barca and Man U. The salary cap, by comparison, spreads talent thinly across too many teams, reducing the game to a defensive struggle as coaches seek to protect their jobs.
What would happen if salary caps disappeared? There’d be a number of stunning deals as LeBron James and Sidney Crosby get market value. But hundreds of others would see their compensation plummet and the term cut sharply. Some poorly run or marginal markets would have to compete at a lower level. Like when Hollywood eliminated vaudeville in many small cities, water would find a level.
It would be tough for fans in small markets or rooting for perpetually incompetent teams. But if the product is to improve, the chaff must be separated from the wheat. And the salary cap needs to go to a museum where it can do no more danger.
Bruce Dowbiggin @dowbboy
Bruce's career is unmatched in Canada for its diversity and breadth of experience with successful stints in television, radio and print. A two-time winner of the Gemini Award as Canada's top television sports broadcaster, he is also the best-selling author of seven books. He was a featured columnist for the Calgary Herald (1998-2009) and the Globe & Mail (2009-2013).