People are not Ready for the Massive Cap Increases

[Leafidelity]

It means the Leafs finally get the cap bailout we expected before covid.

…which means we should expect another global financial crisis

 

[dgibb10]

It means the Leafs finally get the cap bailout we expected before covid.

…which means we should expect another global financial crisis

Except the leafs didn't get full term on any of these big RFAs they blame the cap stalling on.

If you overpaid to buy extra term and get 8 years on Marner, Matthews, and Nylander, sure this excuse would make sense.

But that's not what happened, they were just terrible negotiations.

 

[Leafidelity]

Except the leafs didn't get full term on any of these big RFAs they blame the cap stalling on.

If you overpaid to buy extra term and get 8 years on Marner, Matthews, and Nylander, sure this excuse would make sense.

But that's not what happened, they were just terrible negotiations.

Those deals were all made under the assumption that the Cap would continue to rise as it had years prior. They gambled on that assumption and lost

 

[SEALBound]

So we all knew Rantanen and Marner were going to cash in this summer, but now the cap projections really open things up for guys like Boeser, Ehlers, Bennett to rake in some big contracts. Even guys like Duchene and Tavares who are 34 years old will do significantly better than we initially thought.

I think I'm generally okay with guys like Rantanen and Marner cashing in. They were going to cash in anyway with the dollar amount being relative to % of the cap. They've earned it through multiple years of consistent, elite level play.

It's the David Clarksons that I worry about. These third line guys that fill a minor niche or who have a decent, off par season and cash in for contracts way above their weight class. Those contracts aren't good for the league's overall financial health, IMHO.

 

[dgibb10]

Those deals were all made under the assumption that the Cap would continue to rise as it had years prior. They gambled on that assumption and lost

Again, that makes no sense.

A team gambling on the cap rising would be a team that went for full term and signed guys for 8 years.

You buy more years and it costs you a higher AAV, in hopes that the rising cap makes it a steal at the end.

What the leafs did was simply awful negotiating.

If the cap did explode, it only would have set Toronto up to have to pay those 3 RFAs ANOTHER massive deal after their first ones ended. instead, since it didn't go up, they didn't get hit nearly as hard on the 2nd deals.

Imagine paying close to 50 mill to keep Marner-Nylander-Matthews if the cap had skyrocketed while other teams who got 8 year deals are still sitting cheap. Every ounce of that cap increase would have been eaten up by those 3 when they came due again, this time as UFAs.

 

[HockeyVirus]

If rumors are true a lot of teams won't be spending to the new caps, I think fans are unprepared for that. Everyone got used to teams all spending basically the same amount of money the last half decade. We're going back to several teams operating near the bottom or middle of the cap range.

How will Jets fans react for example if they can't spend to 110M in 3 years but the Oilers, Canucks, Leafs, etc are?

Again, that makes no sense.

A team gambling on the cap rising would be a team that went for full term and signed guys for 8 years.

You buy more years and it costs you a higher AAV, in hopes that the rising cap makes it a steal at the end.

What the leafs did was simply awful negotiating.

If the cap did explode, it only would have set Toronto up to have to pay those 3 RFAs ANOTHER massive deal after their first ones ended. instead, since it didn't go up, they didn't get hit nearly as hard on the 2nd deals.

Imagine paying close to 50 mill to keep Marner-Nylander-Matthews if the cap had skyrocketed while other teams who got 8 year deals are still sitting cheap. Every ounce of that cap increase would have been eaten up by those 3 when they came due again, this time as UFAs.

You are arguing completely different things. The Leafs counted on the cap rising. They also lost the negotiations by not getting 8 years. Separate things.

 

[dgibb10]

If rumors are true a lot of teams won't be spending to the new caps, I think fans are unprepared for that. Everyone got used to teams all spending basically the same amount of money the last half decade. We're going back to several teams operating near the bottom or middle of the cap range.

How will Jets fans react for example if they can't spend to 110M in 3 years but the Oilers, Canucks, Leafs, etc are?



You are arguing completely different things. The Leafs counted on the cap rising. They also lost the negotiations by not getting 8 years. Separate things.

The claim that the leafs were disproportionately affected is bs. Teams that were most effected would be teams that gave out as much term as possible before the cap stagnated. Teams that were most benefited/least effected (among contenders) are teams that had as many shorter term and bridge deals as possible (eg the value saved by going shorter term on Mackinnon and Rantanen vs long term won Col a cup)

You can buy more years, but it will cost you in AAV.

The leafs chose to save AAV (short term benefit) by not buying the final 2 years on Nylander, 3 years on Matthews, and 2 years on Marner (long term downside).

Then the cap stagnation came. This made the short term benefits they got from that decision even LARGER (eg saving 3 mill AAV total is more meaningful on a smaller cap than a larger one), and made the long term downside lesser (Matthews is now only getting 13.5 on his next deal instead of something like 17+, Nylander only getting 12.5 instead of something like 14+, Marner who will cost a lot less than he would otherwise).

However, since dubas got bent over in negotiations in terms of AAV (especially on the marner deal where he realistically should have been like 8.5x6 or 9.5x8), it didn't appear like the leafs got savings by not buying years.

Those contracts still would have been awful compared to other RFAs whether the cap went up or not (and the advantages of 8 year deals like McDrai for example (this is a team that REALLY got f***ed tbh) would have been even further highlighted if the cap skyrocketed).

 

[Linds]

Canadian teams are going to get burned with these massive cap jumps. The CAD is shit compared to the USD right now. Players are paid in USD. However, revenue for the Canadian teams is earned in CAD. Ontop of that, the smaller market teams won't be spending to the cap. (For example, Winnipeg). It's definitely going to be interesting. Not many star players are going to want to play/sign with teams not spending close to the cap and being competitive either.

 

[Figgy44]

This is correct. @Figgy44 is incorrect. Players are not really paid $X per year. It's really more like X% of league revenues per year, which cannot be calculated until the end of the season. They put a piece of their pay in escrow in case there is a revenue shortfall. If there isn't, the escrow money is returned to them.

They can actually get a "true-up" if league revenues are much higher than expected. I think the league and PA have said this year this might actually happen.


I'm kinda in this camp. Pretty much no one can accurately gauge the economic winds that far out. Could be a recession or geopolitical event that wacks league revenues.

Then with the massive cap, players will be losing most/all of their escrow money if league revenues are short.

Interesting. Curiosity wise, I now wonder what's with a player's salary vs AAV and how does that factor into the way the player revenue sharing works...

Revenue sharing in the NHL...How does it work?

Seems there was a discussion on this recently and the place to look is Article 49 of the CBA. I guess I'll poke into there when I get a chance. Thanks for pointing me in the right direction!

 

[HockeyVirus]

The claim that the leafs were disproportionately affected is bs. Teams that were most effected would be teams that gave out as much term as possible before the cap stagnated. Teams that were most benefited/least effected (among contenders) are teams that had as many shorter term and bridge deals as possible (eg the value saved by going shorter term on Mackinnon and Rantanen vs long term won Col a cup)

You can buy more years, but it will cost you in AAV.

The leafs chose to save AAV (short term benefit) by not buying the final 2 years on Nylander, 3 years on Matthews, and 2 years on Marner (long term downside).

Then the cap stagnation came. This made the short term benefits they got from that decision even LARGER (eg saving 3 mill AAV total is more meaningful on a smaller cap than a larger one), and made the long term downside lesser (Matthews is now only getting 13.5 on his next deal instead of something like 17+, Nylander only getting 12.5 instead of something like 14+, Marner who will cost a lot less than he would otherwise).

However, since dubas got bent over in negotiations in terms of AAV (especially on the marner deal where he realistically should have been like 8.5x6 or 9.5x8), it didn't appear like the leafs got savings by not buying years.

Those contracts still would have been awful compared to other RFAs whether the cap went up or not (and the advantages of 8 year deals like McDrai for example (this is a team that REALLY got f***ed tbh) would have been even further highlighted if the cap skyrocketed).

Sure whatever you say. Leafs bad right bud?

 

[VivaLasVegas]

Going by this thread, it feels like the posters here have forgotten that NHL GMs might have a grasp on what percentages are.

Some might, but what will happen is that a handful of desperate GMs who don't see themselves at the same desk in two years if they don't turn things around will make some idiotic trades in desperation and that will lead to general market irrationality until the majority of teams have maxed out their caps again.

 

[Drumman44]

It will just take a few years as active deals expire but then all the cap space will be used up (less teams that don’t/can’t spend to the cap). In five years everything will be the same, players will just have bigger numbers attached to them.

Yep. This is the whole reason we have a salary cap. Owners want to put a lid on salaries so they grow with the league. There may be some advantages early on for teams that have locked in their cores, but it’s soon all going to balance out again

 

[Tie Domi Esquire]

Those deals were all made under the assumption that the Cap would continue to rise as it had years prior. They gambled on that assumption and lost

What's going to be the excuse when the Leafs continue to suck even though the cap is rising?

 

[eojsmada]

I think the one thing that the cap increase does is makes a re-signing of McDavid in Edmonton less than a done deal, since there will be a lot more teams readily available to sign him to a mega deal. Before, they may have had to clear out a couple of contracts to make it work, but now they are being handed McDavid's salary in the form of 2-3 cap increases.

 

[SnuggaRUDE]

 

[Ianturnedbull]

Going by this thread, it feels like the posters here have forgotten that NHL GMs might have a grasp on what percentages are.

I think 5 or 6 years ago I made a thread asking: "Who is the most elite GM in the league?"

There really wasn't very much response, but 1 or 2 people said "Yzerman".

Due to the lack of response I came in with a second thread: "Who is the most elite HFBoard Member?"

Finally, I got a whole bunch of responses before the thread got shut down by the Moderators.

To further your point, IMHO many people here think they are NHL GMs on HF.

 

[SEALBound]

If rumors are true a lot of teams won't be spending to the new caps, I think fans are unprepared for that. Everyone got used to teams all spending basically the same amount of money the last half decade. We're going back to several teams operating near the bottom or middle of the cap range.

I question whether or not there's a realistic team you can put together for $115mil right now. While it's easy to go on CapWages and load up a roster NHL25 style, I don't think it's that easy in reality. I remember Kariya and Selanne going to Colorado in 03-04 and they were both on the 3rd line. I would suggest it didn't really work out the way anyone was hoping it would. There's only so many minutes to go around and ultimately, only so many quality player that justify spending the money to that extent. Sure, you could hand out bonkers deals but I don't think GMs will do that. So hopefully those rumors are true.

Each team keeping $4-5mil in cap would change the league for the positive, IMO. You don't have to worry as much about call ups and you have a lot more space to facilitate trades. Last, there's likely not as much of a pressing need to pay to ditch someone. You can either bury them and keep them on the roster, even as a HS. Campbell being an example of that.

 

[HockeyVirus]

I question whether or not there's a realistic team you can put together for $115mil right now. While it's easy to go on CapWages and load up a roster NHL25 style, I don't think it's that easy in reality. I remember Kariya and Selanne going to Colorado in 03-04 and they were both on the 3rd line. I would suggest it didn't really work out the way anyone was hoping it would. There's only so many minutes to go around and ultimately, only so many quality player that justify spending the money to that extent. Sure, you could hand out bonkers deals but I don't think GMs will do that. So hopefully those rumors are true.

Each team keeping $4-5mil in cap would change the league for the positive, IMO. You don't have to worry as much about call ups and you have a lot more space to facilitate trades. Last, there's likely not as much of a pressing need to pay to ditch someone. You can either bury them and keep them on the roster, even as a HS. Campbell being an example of that.

The answer is the bottom pairing dmen worth 3M will now be asking for 5-6M

 

[Daz28]

I do wonder if the NHL is reaching a point with the cap where there will be an increasing number of teams that won't be able to spend to the cap even if they wanted to.

Add onto that they also probably won't draw coveted free agents w/o a massive overpay. Things will almost certainly get tougher for small market teams.

 

[SEALBound]

The answer is the bottom pairing dmen worth 3M will now be asking for 5-6M

Yes but I mean, GMs are still the ultimate controllers of the market. Say Desharnais was a FA and he comes to me asking for $5mil, I say no and move on. I try my prospects before I do that because everyone knows that's a bad idea, GMs included.

If there's a bit more of a collective philosophy that it's not mandatory to spend to the and f***ing the market up on purpose, that would be great.

 

[Brookbank]

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.

More money chasing the same finite amount of players. NHL GMs cant be saved from themselves.

Some GM will step up to the plate and proudly sign some player to a criminally high number.

Just like after the lockout when Brad Richards was signed for 7 million right out of the gate

 

[HockeyVirus]

Yes but I mean, GMs are still the ultimate controllers of the market. Say Desharnais was a FA and he comes to me asking for $5mil, I say no and move on. I try my prospects before I do that because everyone knows that's a bad idea, GMs included.

If there's a bit more of a collective philosophy that it's not mandatory to spend to the and f***ing the market up on purpose, that would be great.

IDK GM's can't help themselves. It only takes 1 gm. Agents and GMs have always negotiated based on % of cap

 

[Marshall]

I know I'm going to have to stop thinking in terms of cap number and start thinking cap percentage.

Prolly still be some initial sticker shock, though.

 

[ToDavid]

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.

Why should we be protecting GMs from themselves? Bad contracts are part of the fun.

If teams wish to avoid bad contracts, simply make better decisions.

 

[Mike Liut]

Yes , and with US debt continuing to rise, gold will likely increase in price.

Gold has outperformed the S&P over the past 20 years