People are not Ready for the Massive Cap Increases

[EbonyRaptor]

I'm not ready to believe the projected Cap increase is a certainty. We've been down this road before (2015) where the Cap increase fell far short of the projection - what makes this time any more certain than that one?

 

[NVious]

It's gonna get so crazy HF members are gonna be getting 3x2s and 4x1s.

 

[Toby91ca]

Teams will spend more. Players will earn more. Fans will pay more.

Which is exactly how it should work though....inflation.

But also, simple economics....if game is growing...there is more demand, more demand = higher price. If I'm running a business, I'm going to charge as much as I can for my products. If I'm not selling much, I'd have to lower my prices, if I'm selling out, raise prices until you see what the market is willing to spend.

 

[TGWL]

I don't think this will be true. There are not enough players that will be worth signing over minimum salary. Some players will be horribly overpaid, but there will be far more teams going into the year with meaningful cap space compared to previous years.

By the time salaries really level out in 3-4 years, the horrible contracts in the league will look very appealing. That's the main point I'm making that no one seems to be talking about. I'm not sure even one current long-term contract will look bad three years from now.

I think you're going to see teams start signing those bottom players for more. Is it worth losing players instead of just signing them? GM's will obviously make pitches for quality players who hit UFA, but they're still going to sign their own players for more. The cap going up = all players demanding more money. RFA/UFA. Bottom 6/top 6. Star players will obviously feast, but 3rd liner players playing 15 mins or so a night and 15mins on the backend will also enjoy a raise.

What you might see are teams that don't spend to the limit have a tougher time taking on bad contracts for assets. They will already have to spend a lot to reach the floor. They will also struggle to compete.

 

[Saskatoon]

NHLPA really needs to focus on increasing the minimum contracts and draft contracts.

All the increase money is going to go to the guys near the top, as teams can always fill up with cheap minimum contracts

The reason this doesn't happen is that most voting NHLPA members are not on ELC's and thus the people who would want more benefits to those players aren't a big enough voice.

 

[GeeoffBrown]

I think some teams are going to drown in this capspace

 

[Fatass]

Years ago nhl players, even the top dogs, worked summer jobs. They were great hockey players and very much regular folk. The gap now between nhl players and regular folk is already significant. And it’s only getting wider. Imo this widening gap between fans and players financially puts the players into a different category of star. The attention on them in hockey crazy markets (Canada) is even more than ever. I think we will see more players choosing to play in US cities where they can live their lives as the wealthy elite but in total anonymity.

 

[Crazy Cizikas]

Which is exactly how it should work though....inflation.

But also, simple economics....if game is growing...there is more demand, more demand = higher price. If I'm running a business, I'm going to charge as much as I can for my products. If I'm not selling much, I'd have to lower my prices, if I'm selling out, raise prices until you see what the market is willing to spend.

Yup. That’s how capitalism works. Didn’t say it’s bad. Just said that is what will happen. In the end, the money has to come from somewhere. Either cut into profits (LOL!) or the consumer pays more.

 

[Toby91ca]

Yup. That’s how capitalism works. Didn’t say it’s bad. Just said that is what will happen. In the end, the money has to come from somewhere. Either cut into profits (LOL!) or the consumer pays more.

Yeah, the thing is, I separate it from a whole capitalist vs. socialist type thing as it's not one where I'd compare to situations where people are crying Corporate greed....like situations where people sort of need a product and are being charged way more than people think it should cost...but it's hard not to buy because you need it. This is entertainment though, easy to simply not go to games, watch on free TV instead, etc.

 

[jd22]

I agree with your outlook but I believe that the cap increases are agreed on already.

As we have witnessed abundantly in the last weeks, agreements are not even worth the paper they're written on.

Do. not. count. cap. increase. as. a. given.

Do not account for peace as a given either.

 

[Crazy Cizikas]

Yeah, the thing is, I separate it from a whole capitalist vs. socialist type thing as it's not one where I'd compare to situations where people are crying Corporate greed....like situations where people sort of need a product and are being charged way more than people think it should cost...but it's hard not to buy because you need it. This is entertainment though, easy to simply not go to games, watch on free TV instead, etc.

Yes. People can simply choose not to spend money going to games. And they won’t starve or lose their homes. But many will just pay more.

 

[Ianturnedbull]

I don't think people are really understanding what will likely happen with the massive cap jumps in the oncoming years. It's not as simple as saying it's going up 10%, so new signings will just be a 10% increase on previous comparables.

In any given year, there are 2-4 prize free agents that are difference makers. Then there are usually 8-10 depth players that are solid, followed by all the rest which are replacement level or slightly above.

Every single team will have a huge amount of cap space. Take a look at the thread asking which teams are positioned to exploit the new jumping cap. Every single team could be named.

There are not enough quality players to meet the demand. What's going to happen is that teams will enter the season with a great deal of cap space, because they won't be able to find players that are measurably better than their prospects that will be graduating.

Extra cap space that isn't used is wasted. If you end the year with 15 million and never spend it, you don't get a benefit. This is going to sound ridiculous, but a team would be better off paying Rantanen 18 million than letting that cap space sit by with no options. Of course term and future contracts need to be a factor, but this will be less of a worry than in previous years due to the cap jumping every single year for the foreseeable future. Deals will only get worse each year as cap inflation continues to build.

I imagine a big effect of all this will be that contracts with perceived negative value today will actually have positive value tomorrow. Jones, Nurse, Huberdeau, Stephenson, and others. Teams would be better off paying Huberdeau for 60 points and hoping he can find a spark and reclaim some of his former glory, than letting that money rot or spending 9 million on a player with a 60 points ceiling that is more likely to produce 40-50.

Maybe I'm out to lunch, but the supply of quality players available to sign is incredibly small, and the demand is about to explode.

People aren't ready for people...who claim to be smarter then everyone else.

 

[ShakenNotStirred]

I'm not ready to believe the projected Cap increase is a certainty. We've been down this road before (2015) where the Cap increase fell far short of the projection - what makes this time any more certain than that one?

What would happen if the US economy took a dump and unemployment ballooned?

Owners still gonna get their cut

 

[Stealth JD]

People still haven't adjusted to the cap from like, 10 years ago. You hear folks talk about $6m like it's still a huge AAV.

We will soon be at the point where all 19 players dressed for a particular game could earn $6 million each and be cap compliant.

 

[Figgy44]

IMO the cap increase should also correspond with an increase to the league minimum contract. That might help to keep certain contracts down when GMs think about how to fill out their roster.

Also, IMO, UFA should be max 5 years. Keep extensions at 7/8. I don't care.

 

[CascadiaPuck]

At some point, even with a hard cap, the gulf between the spending power of the “have” and “have not” teams might set the league up for what we see in other leagues, where there are teams that buy their way to perennial contender status. Not saying it’s imminent, but it does feel inevitable.

 

[Toby91ca]

IMO the cap increase should also correspond with an increase to the league minimum contract. That might help to keep certain contracts down when GMs think about how to fill out their roster.

Also, IMO, UFA should be max 5 years. Keep extensions at 7/8. I don't care.

I mean, league min has been increasing, just not a direct math amount. I would think league minimum is more of an issue between the players, nothing to do with owners though. A players' cap hit is simply their portion of of the pie they'll get to earn not necessarily their actual earnings. If every single player in the league signed for league min ($775k) and league revenues come in at $6.4B, I think each player would end up taking home about $4.5M, even though their contract says $775K.

I do think the start players are taking more and more of the pie as cap increases over time, but that's a players vs. players issue.

At some point, even with a hard cap, the gulf between the spending power of the “have” and “have not” teams might set the league up for what we see in other leagues, where there are teams that buy their way to perennial contender status. Not saying it’s imminent, but it does feel inevitable.

I'm not so sure. Even with the cap the way it is, there are teams that can spend more than other teams simply because they have more $$$ to do so, but does that become a bigger gap as cap goes up percentage wise? Maybe it does, but not sure.

I think super massive increases in revenues are likely to come from TV deals, with the big ones being shared equally amount the teams. You also have revenue sharing as well.

 

[Golden_Jet]

I agree with your outlook but I believe that the cap increases are agreed on already.

Only the 95.5 is set in stone, the other numbers can change.

 

[wintersej]

Only the 95.5 is set in stone, the other numbers can change.

 

[SEALBound]

I know exactly what will happen.

GMs will think they have all the cap space in the world, sign a couple of atrocious deals the next few summer, and then all the teams will be in cap hell once again.

This. While I like seeing the cap go up as it indicates healthy revenues, I do not support it going up THIS much at once (and then each additional season for the next couple of years). Instead of roughly 10%, I would rather see it go up by about 3-5%.

Not unless there are some new additions to the new CBA that help teams get out of anchor contracts better.

 

[CascadiaPuck]

I'm not so sure. Even with the cap the way it is, there are teams that can spend more than other teams simply because they have more $$$ to do so, but does that become a bigger gap as cap goes up percentage wise? Maybe it does, but not sure.

I mean, literally yes. Take the extreme example: imagine if the cap doubled overnight. There are a few teams who, over a few years of snapping up UFAs, could make great use of that, even with revenue sharing, etc. to amass great teams. Other teams couldn’t keep up, right?

I’m not saying it’s a lock, but if the salary cap grows at a high rate for several years, then the gap does become more and more pronounced each year - and could outstrip what a bunch of clubs could spend. I mean, the owners would be making bank and probably wouldn’t care much. But the talent would start to collect in places like Toronto and NY.

 

[absolute garbage]

There’s a reason why gold has gone up 8% in the past month.

There certainly is, but that's not it lol.

 

[Figgy44]

I mean, league min has been increasing, just not a direct math amount. I would think league minimum is more of an issue between the players, nothing to do with owners though. A players' cap hit is simply their portion of of the pie they'll get to earn not necessarily their actual earnings. If every single player in the league signed for league min ($775k) and league revenues come in at $6.4B, I think each player would end up taking home about $4.5M, even though their contract says $775K.

I do think the start players are taking more and more of the pie as cap increases over time, but that's a players vs. players issue.


I'm not so sure. Even with the cap the way it is, there are teams that can spend more than other teams simply because they have more $$$ to do so, but does that become a bigger gap as cap goes up percentage wise? Maybe it does, but not sure.

I think super massive increases in revenues are likely to come from TV deals, with the big ones being shared equally amount the teams. You also have revenue sharing as well.

I don't think the players get a percentage of the league revenues like that? Maybe I'm wrong?

I'm pretty sure they get their contract amount and that's it? IIRC, NHL has truly guaranteed contracts vs some other sports leagues. If you make $850K now, I was under the understanding you don't get more when the league revenues go up. Maybe you have less go to escrow or something maybe, but you're not going to go from a $850K salary to walking way with more than $850K.

 

[Golden_Jet]

It’s not set in stone because of the 2 year lag calculation in CBA/MOU now.

Also from Seravalli.
Frank Seravalli: Because the NHL has been operating on a two-year lag formula on this current CBA, they had a chance to take a step back and have this be based closer to actual previous revenue, as opposed to what future projection revenue is going to be. The changing of the formula has allowed them ample opportunity to put in stone an ironclad agreement with the NHL and NHLPA. Not really a projection, moreso an agreement.

Of course, as they noted, it is subject to minor increases, up or down, but for the most part, you can now operate, if you’re an NHL team or an agent, with some degree of certainty here. I think the other really interesting part of this is not just the part of the increase in the upper limit, but what a lot of teams, especially smaller-market teams, are going to be paying attention to today is how much the salary floor is increasing.

Breaking down the NHL, NHLPA’s new salary cap agreement

The league has revealed that the cap could be up over $100 million by the 2026-27 season.

www.dailyfaceoff.com

 

[Crazy Cizikas]

There certainly is, but that's not it lol.

What’s the reason?