The CFL's salary management system

The tax could be flexible and be based on the average of all the team's player expenditures. The 3 teams which exceed the average, subsidize the 3 teams with the lowest payroll, dollar for dollar. The two teams in the middle would form the upper and lower average.

Ideally the subsidy should be shared equally with all 3 lowest payroll teams so as not to encourage any team to massively underspend, then be subsidized to the average. Also no team should be subsidized to exceed the average payroll.

This way if a team wanted to keep a valued veteran for $150k, instead of replacing him with a cheaper player for $70k to fit under the cap, could pay him his salary, then chip another $80K into the subsidy kitty (as his salary could put them $80k over the average)

Sounds very much like the way MLB works their "luxury" tax system.
Again, how do you feel that works for them?

I know nothing about MLB luxury tax. I suggested this as a way for teams to keep their valued veterans ...and reduce the hop-scotching of veterans from one team to another to save $20k.

If, for instance, the Als decided to ignore the Cap and sign some of their veterans at higher salaries, for each dollar they spend over the average salary, they would have to subsidize the other teams to bring them closer to the Als spending.

Then at Free Agent time, the lower salaried teams would have a warchest from the Als to compete for their free agents.

The problem with a rigid SMS, is it does not take into account the improved finances of a team. If the Riders report revenues of $20M last year, they could spend a little more than $4.05M, if they chose, to keep some of their valued veterans...rather than cutting them loose to save $20k. The SMS maximum is only 25% of the Rider's revenue. The Luxury Tax is flexible and allows higher revenue teams to overspend on players, but also will be giving the same amount of overspending to the poorer clubs.

With the SMS, higher revenue teams will simply be forced to get rid of higher priced veterans to fit under the rigid Cap.

With a flexible Luxury Tax, teams would never have to worry about staying under the Cap, as they are helping set the Cap with the contracts they sign their players to. And we would hope that teams would not spend money they don't have, and not driving up player salaries to levels which are not sustainable.

Okay. you say you don't know anything about the MLB system. Fair enough.
I'll just say it is very similar to what you propose and it has been and continues to be, an unmitigated disaster. MLB and their "cap" represent much of everything that is wrong in pro sports and transferring anything like that to the CFL just seems like a bad...a very bad...idea.
There are plenty of ways to deal with veteran players that are far more sensible than the luxury tax notion.
The NFL, which likely has the hardest cap of all, has a mechanism to help teams accommodate aging veterans.
The CFL could very easily, and simply put something like that into play.

Allowing teams to spend more because they have more simply undermines the entire notion of a salary cap.
First, the whole point is, no matter how much money the Riders make in a year, they can never afford to compete with the billionaire owners in the CFL.
Never!

Next, in baseball, the league has essentially become MLNYY&BRS+AFEWOTHERS, with most of the teams being just minor league feeder systems for those few teams.
Because the luxury tax system does nothing to stem overspending and escalating salaries.
As teams spend more, the average you talk about rises. Teams must then compete for players, salaries rise, averages go up, and the cap is done--finished.
The warchest you anticipate actually guarantees this escalation will occur.
If teams do not spend that money on higher salaries, then they don't get free agents. If they do spend it, the average goes up.
And as we have the MLB example, we aren't just speculating, we know this will happen.

Sorry. I am going to have to give this idea the gong...

There is a big difference between a sports figure and a public official. Public officials are paid directly from taxes and the public has no say in what their salary is.

In terms of sports figures it doesn't matter if the players salary is disclosed or not to the public. Those who think they need to know that information are sadly mistaken. What is required is that there is full disclosure to the league. And the league has to act on that disclosure. For example: I believe even in the the off season, a NFL team only has 7 days to redo a recently acquired player's contract or reduce their overal salary committments to the cap level. (this definitely applies during the season). What this does is stops teams from playing games and is open and transparent for everyone. This stops the stock piling of players going into camp and the hiding of players.

When the auditor finishes his job this year. The league will announce if it is one team or more then one team that is over. If the majority of the teams are under the cap is working.

Actually I think you are wrong, there are no mandatory public disclosures in the NFL, BUT often the agent and the players are willing to disclose this information on their own, or leak it privately. Just take a look at most of the news stories surrounding the NFL FA signings these days, any salary figures usually come with qualifiers, not hard statements.

I believe this is the same for the other leagues. Heck even many CFL players salaries are reported. Why do you see figures reported more in the NFL, NHL, etc? because at $40 million dollars people are more inclined to crow out this than an $80,0000 pay out....

But heck I could be wrong

The NBA also has a luxury tax where you pay dollar for dollar.

Knowing nothing about the NBA system, except that I believed it was the first league to implement one and that it is a "soft" cap I did some reading.
It is very complicated. And I didn't go through it with a fine tooth comb.
But generally, yes, the penalties for going over the set cap amount appears to be primarily a "luxury tax"
That is how the CFL SMS also works, though further penalties of a potential loss of draft picks can be assessed.
But fundamentally, the NBA is a "Soft cap" system, not a "luxury cap" system as in baseball.
The difference is, the NBA sets a cap figure prior to the season, based on a fixed amount of revenue sharing (in this case, 57%, as agreed to in their CBA) and then teams are penalized accordingly. There is a host of rules and exceptions and examples, featuring minimum salaries for veterans, exemptions for rookies, disabled players, etc., etc.
But it all comes back to the pre-determined, fixed cap number.
As does the CFL.
In baseball, while determining the luxury payments is exceedingly complicated, there is no pre-determined amount, no fixed % of revenue sharing, and the tax is applied, as Zev suggests, by basing it off what teams actually spend, rather than that pre-determined amount.
And the result of the system is escalating salaries, wildly disparate amounts paid by the rich teams vs. the poor teams, and the aforementioned virtual feeder system for, primarily, the Yankees and the Red Sox.
Far from balancing out the playing field, or allowing teams to sign a veteran player, it has given baseball an extremely high correlation between winning and spending (the NBA site I checked pegged the NBA at .13, which is almost no correlation, and MLB was .43, which means a very strong correlation)and veteran players simply cannot turn down the massive amounts a few teams spend in order to stay put in Milwaukee.

Here is a link for you leeing that tells you how much NFL salaries are:

http://www.theredzone.org/2007/salaries/index.asp