The SMS 4 years later....has it been good for the CFL?

[David]

Now in its 4th year, has the SMS ($4.05 million cap per team in 2007, now at $4.2 million) been a good for the league? Besides making some owners even wealthier, I don't believe that it has. Certainly, the league has seen a resurgence in popularity in recent years; attendance and viewership is up in most markets. But I wouldn't directly attribute any of it to the SMS.

First, I don't think the CFL's previous system of salary compensation was flawed. No one was spending like drunken sailors and no team was dominant. What we're seeing now however is way too much player turnover. Well known veterans - players with name recognition and fan appeal - have been forced into early retirement. We haven't been able to hang onto draft picks because we can't pay them enough to stick around. The league still hasn't expanded from 8 teams, and we've even seen owners (Cynamon and Sokolowski) walk away during the SMS. What, exactly, have the benefits been with a cap that low?

We're never going to compete with the other major North American sports leagues for salary compensation, but it would be nice for a CFL team to make the occasional splash with a "big name" signing. Instead, I am starting to read (and listen to) comments like this one (from one of Vancouver's top ticket brokers), which appeared in Saturday's Vancouver Sun "….But right now, they're (Vancouver Canucks) doing a tremendous job of generating revenue and they're the only big league sports team in town. With all due respect to the Lions and Whitecaps, they are not top-tier products." Comments like this are insidious. They creep into the public consciousness and suddenly, it has people believing that our league is 3rd rate, semi-pro, minor league. Cripes, we're even being lumped in with a soccer team that's not even in the MLS yet!

I'd like to see a luxury tax system whereby cap breakers pay into an equilization pool that benefits the lower earning clubs. Or do what the MLS does. Have a salary cap, but allow teams two (or even one) designated player(s) who are exempt from the cap.

DH

[WestCoastJoe]

Good topic, David.

Generally speaking, I am in favour of salary caps for pro sports leagues, including the CFL. IMO it does tend to level the playing field between rich teams and rich owners and the less financially privileged teams.

Up to this time in its history, I would not think the CFL is a way for an owner to get rich. IMO it is more of a "love of the game" thing for an owner.

It seems the league has had a surge of popularity in the last few years. Yeaaa! I have to say, as a pro sports league, it is more of a cottage industry than the big dollar leagues (NFL, NBA, NHL, MLB). But its smaller size, greater accessibility, and down-to-earth athletes are factors that contribute much of its appeal.

I don't think the SMS has had any effect on the popularity aspect of the league.

Turnover of personnel is a problem. I suppose the SMS has contributed to that. Players are going to seek the best deal they can get. And teams are going to cut high priced veterans and keep low priced rookies. As a price to pay, as a fan, in order to keep a financially healthy league, I am willing to accept that downside to the SMS.

It does hurt when we can't hang onto draft picks: Carter, Morencie, et cetera. But, I have to admit, that syndrome does tend to equalize the talent in the league, a good thing, in the big picture. (For the sake of the league, I am gratified that O'Billovich has already turned the Hamilton franchise around, and I can just manage to stomach seeing all those ex-Lions over there: Johnson, Floyd, Knowlton, Morencie, Carter, etc.)

Expansion? That is a very long term goal.

I am very content with the CFL product on the field. I support the SMS inasmuch as I think it contributes to the financial health of the league's teams.

[B.C.FAN]

The SMS has given the league two big bonuses:

1. Stability: The CFL has enjoyed a tremendous rise in popularity, TV viewership and revenue in the past four years. We're now more likely to hear about how much money clubs have made rather than how much they have lost, and that's healthy for the future of the league.

2. Parity: The CFL has had four different Grey Cup champions in four years (six in six years if you want to go back farther). B.C.'s run of four straight first-place finishes ends. Edmonton's run of 34 straight playoff appearances also ends. Saskatchewan wins only its third Grey Cup in nearly a century of existence. Dynasties aren't good for the health of the sport. Parity is.

Roster turnover is a negative consequence of a salary cap in most sports. The loss of familiar faces might hurt the marketability of the league to some extent, but that's vastly outweighed by the benefits of stability and parity. As long as teams are competitive on the field and the product is exciting, fans will be interested. I don't want to see a luxury-tax system like MLB, where the Yankees and Red Sox can continue spending at will and small-market teams have virtually no hope of competing with them.

[Blue In BC]

SMS has been good for the CFL. IMHO, roster turnover shouldn't be attributed to SMS as a negative.

It forces teams into more controlled spending within realistic revenue streams. Keep in mind how many CFL teams folded or nearly folded before SMS was in place.

While the forced financial cap does cause some of the player movement, it also stabilizes franchises. It levels the playing field. Teams now make decisions on how to spread the cap across the roster rather than player by player. It's good business in trying to balance veteran against youth on any roster.

This would be true whether the SMS was $4.2M or $14.2M. Players would still move from team to team. The business reality is that you can't spend more than revenue and expect to keep in business.

The CFL/NFL option contracts causes additional roster upheaval. I can't recall exactly when that was implemented but I was never in favor of that situation and believe it should be eliminated.

The ratio adds complexity to roster stability. Once NI's develop they become highly sought after, highly paid players and if they become free agents, more difficult to keep on a roster without getting into bidding wars.

I've always thought some sort of restricted free agency for NI's should be put in place.

Anyway, there are more issues than just SMS that have contributed to player movement.

We had multiple team, multiple player trades before SMS which we don't see to that extent any more. The Dunigan trade comes to mind.

[Sir Purrcival]

I would disagree with the concept that no one was spending money like drunken sailors before. All you have to do is say the name Flutie and before that Rocket Ismail. One has to wonder if the free spending that started in Calgary and then later in Toronto may have laid some of the ground work for both of those franchises financial woes that came after. Also, you had to wonder what you weren't aware of during that era.

Secondly, a cap finally put to rest that belly aching that we heard constantly from at least one small market team that they "couldn't compete" with the big boys. There have been a grand total of 3 SMS violations. Guess who got tagged with two of them? That's right , one of the biggest protesters. Now I am not really taking a position on whether or not the current SMS is an improvement but things weren't all that rosy previously which is what prompted the change in the first instance.

Edit. Make that 4 violations, 3 coming from "small markets".

[Blue In BC]

Players like White Shoes Johnson, Fred Bilitnikoff, Johnny Rogers had huge contracts many many years ago. Disproportionate to the contract levels of then current players.

QB's like D Brock, M Dunigan also had big contracts. I thought Brock's deal was $500K and that was in 1982.

Paying more doesn't necessarily improve the quality of the players in the league or prevent them from leaving.

[David]

I would disagree with the concept that no one was spending money like drunken sailors before. All you have to do is say the name Flutie and before that Rocket Ismail. One has to wonder if the free spending that started in Calgary and then later in Toronto may have laid some of the ground work for both of those franchises financial woes that came after. Also, you had to wonder what you weren't aware of during that era.

But was Doug Flutie so bad for the league?? Arguably, the best and most exciting player in the long history of the game. Also, that was so long ago now that I am not so sure that the financial woes weren't more a function of bad ownership than bad salary management.

Problem is today, we not only cannot hang onto players due to the albatross that is the SMS, with all due respect to Geroy, AC and possibly one or two others, there's no star power in this league any more. A lot of really good athletes and fine citizens, but mostly just JAGs (just another guy).

DH

[Blue In BC]

David. How do you explain the length of time AC, Chiu have been in Montreal. R Ray in Edmonton. How long Stegall or Roberts played in Winnipeg. MCManus in Hamilton.

Teams can and do hold onto players they want where the players are being paid competitively.

[WestCoastJoe]

If the SMS is deemed to be a detriment to keeping star players, then I have to ask: What marquee players would we be able to keep if the SMS was removed?

I do not think the Lions or the CFL could afford the salary of Cam Wake.

It seems to me there are not that many star CFL players we would lose because of a limited SMS. If we lose players to the NFL, it seems to me we could not compete for them financially even without an SMS.

To pursue my point, if the SMS does not prevent star players from going to the NFL, then its removal would only seem to greatly increase the salaries of a couple of marquee players on each CFL team. To me, as a fan, I would not like it all that much if most of the guys are making less than $60,000 in the CFL, and one or two guys per team are making over a $1,000,000. That wouldn't sit well.

What is the benefit to the league if a player like Ricky Ray would get over a $1,000,000 per year and most of the players would still get less than $60,000? To me, that would not be desirable.

If you remove the SMS, it would benefit a few players greatly, and there would be a much greater discrepancy between the salaries of those star players and the majority of the players. I also think removing the SMS would put the league at risk, once again, of financial ruin. Owners and GMs have not necessarily distinguished themselves for business acumen, when wins and losses are so important, and the attendant publicity is so overwhelming.

I think the salary structure as it is, is relatively fair for both the teams and the players. There is a limited amount of revenue coming in. I think a slight adjustment in favour of the players is in order. But mostly status quo. In my opinion ...

[Blue In BC]

Using the Bombers as an example, they expect to show a profit in 2010 of between $300K and $500K.

That's not a lot of leeway to increase the SMS much. Adding $200K to the 2010 SMS eats a large portion of that up. If poor performance or bad weather impacts gate revenues, they'd show a loss for 2010.

They lost $1.2 M for 2009. While that was due to lousy business decisions requiring the replacement of all the coaches, it could take them 5 years just to recover the rainy day fund for that error.

Unless revenues go up, it's not like the CFL can increase the SMS by a million a year or some large amount that will make a difference.

[Toppy Vann]

While I agree with the need for an SMS of some sort, I do think the unintended (I hope) consequences of too much player turnover, early retirements due more to contract size than performance are not helping the league. David may not have the solution but he has identified a problem that has the potential to bite them in the rear or for Yogi Berra to come back and say 'it was deja vu all over again".

Remember how bleak the stadiums were in those bad 90s. Even veteran all star Paul Bennet's dad a seasons ticket holder for the Argos even though Paul played elsewhere was known to have said that he no longer could identify with the teams any more as there was too much turnover and movement. Right now they got a good TV contract but if they failed at the box office due to slumping attendance that next deal might not be as good.

David is right. I recall not being able to give away my second ticket free and would many times go to home games alone and be in a row alone nearly on some nights as we were getting 17 to 19000.

Losing a star in a city due to bonus payments is a recurring problem now. They have to pay top bucks to their top guys and that means shortchanging elsewhere and constantly needing a cheaper guy.

I don't have a solution but I am not happy about turnover based more on the salary or payment due than what the could do for the team next year.

Even Wally is saying now they might have cut too deep with the vets. But he had to or else.......over the SMS.

[David]

David. How do you explain the length of time AC, Chiu have been in Montreal. R Ray in Edmonton. How long Stegall or Roberts played in Winnipeg. MCManus in Hamilton.

Teams can and do hold onto players they want where the players are being paid competitively.

Dale, you kind of made my point for me. Those players stuck around because they ARE being paid fairly. But there's not nearly ENOUGH players being paid fairly around the league. My solution is to either:

* get rid of SMS altogether
* increase it so these guys are being paid fairly
* introduce a 'luxury tax' that forces cap breakers to pay into a pool to benefit lower earning clubs
* keep it but allow each team a couple of designated signings that bring some marquee players and "buzz" back into the league that don't count against the SMS (or, in the case of Wake and Foley, allow us to maybe hang onto them a couple of more years)

There's just something fundamentally wrong when I'm asked to pay $1,200 a year for 2 season tickets to watch players who aren't even making $60,000 a year* put their long term (and short term) health at risk. Do I mind paying that? Hell no. I've had my seats since 1995 and have absorbed numerous price increases. But I do feel that between the television contract with TSN, merchandising, gate receipts, and Grey Cup - there's a bigger slice of the pie out there for the players than the owners and league are letting on.

* reported today by Rob Vanstone in the Regina Leader-Post

DH

[MacNews]

I like the idea of having 2 players exempt from the salary cap, the like Franchise Player in the NFL.

It'd allow you to have your QB and somebody else be paid enough to keep them around.

[Blue In BC]

A few points and they probably won't be popular to everyone.

As I said, using the Bombers as a reference, they only expect to turn a profit of $300K - $500K in 2010. That's with the current SMS. I don't think too many teams can afford to increase the SMS to any great extent. An increase of $200K to this year's SMS takes a large portion of that projected profit, although they may have already taken that into account?

It was necessary for Braley to take control of the Argos because the owners wanted to bail. The CFL is after all a business and it's not exactly the pot of gold for owners or community owned teams.

What exactly is the definition of fairly and what is the CFL competing against except other CFL teams? IMHO, you could double the SMS and it wouldn't change anything. In the end, a player making $100K will move to another team willing to pay him $150K .

I've long been a non supporter of the ratio. Is it " fair " to have to pay significantly more for NI's than an equivalent import because of the supply / demand issue? From a business point of view, shouldn't the best player win a position based on skill not passport?

That is the position of the league when pushing to reduce the number of starting NI's to four. They may not succeed but that is a fundamental business truth.

Another thing that made no sense to me for the past couple of seasons, is the increase in the roster size to 46 but only allowing 42 to dress. That makes it little more than a paid practice or short term IR group. It hasn't stopped players from moving around.

I would suggest several things could be done in that regard. However, as you will see it's clearly impacted by the current necessity to protect NI's.

Let them all dress for every game. That has cost implications for travel / meal costs. It also has ratio implications which would have to be dealt with.

The 4 man non dressed ratio could be dictated. If those players are NI's, they can go into games at any time. If there are imports in that group, then they would be restricted DI's. By that, I mean that they could only enter games if another import was permanently eliminated from that game.

If you are a ratio supporter, then DI's in any form are detriment to the development of the back up NI's. Who are we kidding to think otherwise. Currently 13 NI's back up 7 NI starters and 3 DI's back up 16 import starters. Does that make sense?

Even at the minimum salary of $41K, each team is " sitting " out 4 players with an annual expense of $164K.

If it was up to me, I'd drop the roster size back down to 42. I'd also drop the ratio ( I'll time how long it takes for OV to respond back on that comment ).

I sat in BCP in the late 80's and early 90's when there were 12,000 people in the stands. Where were all those people wanting to watch their favorite NI's play then? That was pre SMS and players were still moving to other cities as well.