[getbak]

Originally Posted by Resolute 14

Can you point me to the actual CBA clause, if for no other reason than to ensure I have the right process in my mind?

Article 50.5(b), page 258 of the CBA.

The Upper and Lower Limits of the Team Payroll Range shall be determined in accordance with the following formula:

(Preliminary HRR for the prior League Year multiplied by fifty (50) percent (the Applicable Percentage), minus [-] Projected Benefits), divided [/] by the number of Clubs then playing in the NHL (e.g., 30), shall equal [=] the Midpoint of the Payroll Range (which figure shall be considered the Midpoint only for purposes of calculating the Adjusted Midpoint; all references to the "Midpoint" thereafter shall mean the "Adjusted Midpoint"), which shall be adjusted upward by a factor of five (5) percent in each League Year (yielding the Adjusted Midpoint, which shall then become the Midpoint of the Payroll Range) unless or until either party to this Agreement proposes a different growth factor based on actual revenue experience and/or projections, in which case the parties shall discuss and agree upon a new factor. If a significant (i.e., $20 million or more) onetime increase or decrease to League-wide revenues (e.g., by reason of the addition or loss of a national television contract or the scheduled opening of one or more new arenas which is expected to result in a significant increase in League-wide revenues) is anticipated in the next League Year, the parties will endeavor to estimate the expected increase or decrease and incorporate that estimate into the above-stated formula for calculating the Adjusted Midpoint.

After adjustment for the revenue growth factor, the Payroll Range shall be constructed by adding to the Adjusted Midpoint an amount equal to fifteen (15) percent of the Adjusted Midpoint (i.e., multiplying the Adjusted Midpoint by one-hundred fifteen (115) percent) to establish the Upper Limit, and subtracting from the Adjusted Midpoint an amount equal to fifteen (15) percent of the Adjusted Midpoint (i.e., multiplying the Adjusted Midpoint by eighty five (85) percent) to establish the Lower Limit. Notwithstanding the foregoing, (i) the magnitude of the Team Payroll Range shall never be less than $16 million (i.e., +/- $8 million of the Adjusted Midpoint) or greater than $28 million (i.e., +/- $14 million of the Adjusted Midpoint) and (ii) the Upper Limit shall never be less than $64.3 million (notwithstanding Preliminary HRR for the prior League Year), provided, however, that should the calculations described above produce an Upper Limit below $64.3 million, the Midpoint and the Lower Limit for that League Year shall be set in accordance with those calculations (without regard to the resulting magnitude of the Payroll Range).

Originally Posted by Resolute 14

And in the context of my post you responded to, it doesn't matter anyway. My point was that the cap, floor and midpoint were, after that 5% inflator, set at a point where an expansion team would have to reach only $120 million in revenue to be cap neutral.

$120 million in revenue would have been 19th in the league in 2014-15 if you believe Forbes' estimates. And for those keeping score, that is better than the Oilers, Senators and Jets managed and equal to the Lightning.

This brings up an interesting question that somehow never gets mentioned when people discuss the cap implications of expansion: How much of the total league wide revenue is generated locally by each team, and how much is generated by the league as a whole?

If you add up the revenue numbers that Forbes uses for each team, it totals just under $4B. That's total revenue, so it isn't just what each team in generating on its own, but also each team's share of revenue brought in at the league level (things like the national broadcast deals; major sponsorships like Honda, Molson-Coors, Bridgestone, Enterprise, etc; and revenue from league events like the Winter Classic and All Star Game).

Right now, those league revenues are split 30 ways. With expansion, there will be another 1 or 2 teams taking a piece of the pie, so everyone's slice gets a little smaller. I doubt any of the sponsorship deals are written to increase as the number of teams increases.

I wonder what the revenue numbers would look like for each team if you only included revenue generated by the team? I also wonder what the Las Vegas team's revenue would need to be to be cap-neutral in that situation?