The Cap Should Be Over $100 Million Right Now. How Is The NHL going to handle the inevitable post-COVID cap rise?

[majormajor]

The NHL is thriving in a high inflation environment ... the reason might be more obvious than we thought ... ice hockey in general is an expensive sport and it has a lot of high income fans.

It would make sense that the NHL has a large pool of high income fans. If you're a "hockey family" that could afford to put one of your kids in hockey instead of basketball or soccer, odds are you can also probably afford a $80+ ticket + $20 dollar hot dog and beer + $200 jersey.

All that's happening with higher pricing is the NHL is making even more money. Sure the bottom end of the fanbase is being priced out, but the richer portion is just making up for it. Business is good for Mr. Bettman.

Technically the high inflation environment ended two years ago. Prices have been nearly flat for the last couple years.

In any case, inflation doesn't necessarily make inequality worse. Wages are prices and go up along with everything else. In the pandemic inflation the income groups with the biggest percentage gains in income were at the bottom. The problem is that rent increased even faster. Once again, it's the housing crisis. In this case driving some of the last remnants of the low income fanbase out.

What the NHL has benefited from in recent years is the real income gains and capital income gains in the upper middle class in the U.S. Real incomes are up.

Is that money in home equity liquid?

It doesn't matter, people spend as if it is liquid. There is a "wealth effect" in macroeconomics where people are more likely to borrow and spend if they have higher home equity. They certainly have not stopped going to hockey games.

 

[Golden_Jet]

There is no limit under normal years on what the cap can rise by as far as I know.

There is on the current CBA, yes we k ow how it works.

I can understand the players made concessions for the Return to Play agreement,

no you don’t understand , as you’ve proven it.
You can’t say you understand, then totally ignore what’s in the MOU.

 

[FriendlyGhost92]

Technically the high inflation environment ended two years ago. Prices have been nearly flat for the last couple years.

In any case, inflation doesn't necessarily make inequality worse. Wages are prices and go up along with everything else. In the pandemic inflation the income groups with the biggest percentage gains in income were at the bottom. The problem is that rent increased even faster. Once again, it's the housing crisis.



It doesn't matter, people spend as if it is liquid. There is a "wealth effect" in macroeconomics where people are more likely to borrow and spend if they have higher home equity. They certainly have not stopped going to hockey games.

Not to get political... But those inflation books are cooked as f*** lol.

 

[Soundwave]

There is on the current CBA, yes we k ow how it works.


no you don’t understand , as you’ve proven it.
You can’t say you understand, then totally ignore what’s in the MOU.

Aside from RTP rules which were implementing essentially only for the COVID crisis, is there a express limit on what the cap can increase by? And what is that limit?

 

[Tawnos]

Because it was a ploy.

The NHL was hoping they would take longer to pay the COVID debt off.

Why? Because then they could have the Return to Play stipulations extend a year longer, it's right there in the agreement, if the players don't pay off the COVID debt by a certain date the RtP agreement would auto-renew itself for the 26-27 season.

The PA knew what was up and didn't go along with that, they paid off their COVID debt way faster than expected to prevent that from happening. Now the Return to Play rules expire with the 25-26 season.

That also tells me 5% is a no go for 26-27 ... that shit ain't happening. The PA went out of their way to avoid that exact scenario. The next CBA is going to have to pony up a lot more than 5% cap increase for 26-27 and beyond.

This is, again, entirely false. The Covid debt wasn't a factor. It had been paid off for 6 months at that point. The 5% cap increase was what was mandated by the CBA as the POST-PAYOFF cap increase. The league offered to have a bigger increase than 5%. The players said no. The NHL said "we're willing to go higher, but the 6% escrow cap will also have to be higher." The players rejected it, though they later came back and agreed to round it up to the $88m. There were no stipulations on that.

 

[Soundwave]

Technically the high inflation environment ended two years ago. Prices have been nearly flat for the last couple years.

In any case, inflation doesn't necessarily make inequality worse. Wages are prices and go up along with everything else. In the pandemic inflation the income groups with the biggest percentage gains in income were at the bottom. The problem is that rent increased even faster. Once again, it's the housing crisis. In this case driving some of the last remnants of the low income fanbase out.



It doesn't matter, people spend as if it is liquid. There is a "wealth effect" in macroeconomics where people are more likely to borrow and spend if they have higher home equity. They certainly have not stopped going to hockey games.

I don't think anyone really believes this though, lol. New Playstation is $700 US, 800 Euros, lol. Grocery prices are definitely higher than even 2 years ago. Entertainment events? I would say they are up too, go to the movie theater, it's more expensive than 2 years ago and way more expensive than 5 years ago. Have a gf/wife who you want to buy a luxury brand item for their birthday or Christmas or anniversary? Some of that shit is like 30%-40% more than it was just a couple of years ago and the prices were already outrageous then.

Disneyland? Universal? Ditto.

Hockey games? Not much different from what I can tell, definitely has gone up in price for most places.

 

[Golden_Jet]

Aside from RTP rules which were implementing essentially only for the COVID crisis, is there an express limit on what the cap can increase by? And what is that limit?

Yes there is a limit, it’s in the MOU.

Still haven’t figured out why you ignore half the things I say, and repeat things again, an example the 9 million is flat out wrong.

 

[Soundwave]

This is, again, entirely false. The Covid debt wasn't a factor. It had been paid off for 6 months at that point. The 5% cap increase was what was mandated by the CBA as the POST-PAYOFF cap increase. The league offered to have a bigger increase than 5%. The players said no. The NHL said "we're willing to go higher, but the 6% escrow cap will also have to be higher." The players rejected it, though they later came back and agreed to round it up to the $88m. There were no stipulations on that.

So they came back and did what?

They accepted a 5.38% increase at the end of the day.

 

[Golden_Jet]

This is, again, entirely false. The Covid debt wasn't a factor. It had been paid off for 6 months at that point. The 5% cap increase was what was mandated by the CBA as the POST-PAYOFF cap increase. The league offered to have a bigger increase than 5%. The players said no. The NHL said "we're willing to go higher, but the 6% escrow cap will also have to be higher." The players rejected it, though they later came back and agreed to round it up to the $88m. There were no stipulations on that.

Facts don’t matter, or the MOU apparently.

 

[Tawnos]

So they came back and did what?

They accepted a 5.38% increase at the end of the day.

They did, but ONLY when the league wasn't asking for any concessions from them in return. That's not happening in the next CBA negotiation.

 

[Soundwave]

Yes there is a limit, it’s in the MOU.

Still haven’t figured out why you ignore half the things I say, and repeat things again, an example the 9 million is flat out wrong.

What is that limit, why don't you just state the amount, and is that MOU tied specifically to COVID RTP factors? What is the normal limit. Not 5% because that's the RTP MOU, I mean in a normal case situation when there isn't an emergency lock down of civilization.

 

[FriendlyGhost92]

Still waiting to hear why the entire NHLPA is going to jeopardize their pay to squabble over cap increases that only benefit 1-2 years of the high end UFAs.

 

[Golden_Jet]

What is that limit, why the secrecy, and is that MOU tied specifically to COVID RTP factors? What is the normal limit.

The MOU is the Covid RTP CBA

https://media.nhl.com/site/asset/public/ext/NHLPA_NHL_MOU.pdf

let us know when you’ve read it.

What’s not in the MOU is in here

https://cdn.nhlpa.com/img/assets/file/NHL_NHLPA_2013_CBA.pdf

 

[Soundwave]

Still waiting to hear why the entire NHLPA is going to jeopardize their pay to squabble over cap increases that only benefit 1-2 years of the high end UFAs.

Because in any other one of the major pro sports (NBA, NFL, MLB) a massive 35%+ increase in revenue in only 5 years is supposed to lead to a higher salary cap.

It's supposed to even in the NHL.

The players are not "asking" for something, that's how it's supposed to work. It's up to them if they want to give the owners a break and accept a slower rise when they probably do not have to.

The MOU is the Covid RTP CBA

https://media.nhl.com/site/asset/public/ext/NHLPA_NHL_MOU.pdf

let us know when you’ve read it.

What’s not on the MOU is in here

https://cdn.nhlpa.com/img/assets/file/NHL_NHLPA_2013_CBA.pdf

So in non-COVID times (which is what the next CBA will be based on) there is no limit to what the cap can increase by.

The MOU for COVID RTP is only meant to cover the period of time when the league is impacted by COVID factors.

 

[Tawnos]

What is that limit, why don't you just state the amount, and is that MOU tied specifically to COVID RTP factors? What is the normal limit. Not 5% because that's the RTP MOU, I mean in a normal case situation when there isn't an emergency lock down of civilization.

I think you need to start thinking of it this way.

(1) The Covid RTP limit was a $1m per year increase as long as revenues were increasing (the so-called "flat cap").
(2) The previous CBA was supposed to expire in 2022, but as part of the MOU they agreed to an extension through 25-26. Part of that extension was a 5% limit on cap increases.

5% is the normal limit in this CBA. The previous CBA did not include one.

 

[FriendlyGhost92]

Because in any other one of the major pro sports (NBA, NFL, MLB) a 35%+ increase in revenue is supposed to lead to a higher salary cap.

It's supposed to even in the NHL.

The players are not "asking" for something, that's how it's supposed to work. It's up to them if they want to give the owners a break and accept a slower rise when they probably do not have to.

So again, players who don't benefit at all are going to risk their year's salary to insist on the cap increasing faster, which doesn't benefit them.

Yep. Makes sense. Leon Draisaitl is gonna risk his $14M to ensure a faster cap increase that does not benefit him at all.

 

[Soundwave]

I think you need to start thinking of it this way.

(1) The Covid RTP limit was a $1m per year increase as long as revenues were increasing (the so-called "flat cap").
(2) The previous CBA was supposed to expire in 2022, but as part of the MOU they agreed to an extension through 25-26. Part of that extension was a 5% limit on cap increases.

5% is the normal limit.

5% is the top limit for COVID emergency measures (the COVID RTP). There is and has been no limit on cap rises otherwise as far as I can tell.

Why on earth should the players agree to have limits now that COVID is over and done with?

 

[Tawnos]

5% is the top limit for COVID emergency measures (the COVID RTP). There is and has been no limit on cap rises otherwise as far as I can tell.

Why on earth should the players agree to have limits now that COVID is over and done with?

You are wrong. 5% is the top limit for the post-emergency part of the current CBA.

 

[majormajor]

Not to get political... But those inflation books are cooked as f*** lol.

I don't think anyone really believes this though, lol. New Playstation is $700 US, 800 Euros, lol. Grocery prices are definitely higher than even 2 years ago. Entertainment events? I would say they are up too, go to the movie theater, it's more expensive than 2 years ago and way more expensive than 5 years ago.

Disneyland? Universal? Ditto.

I am an economist and I know how the sausage is made.

And I know why people believe that inflation is still happening. People still have sticker shock over the increases that happened in 2022. They have barely budged since then. Groceries are completely flat. 1% growth in 2024. But if you are mentally primed to think that item x costs a certain amount you will be upset regardless of whether than increase happened last year or three years ago.

https://www.npr.org/2024/07/12/nx-s1-5037875/inflation-food-prices-grocery-supermarket-wages

So are grocery prices finally going to come down?​

To some degree.
The prices of some individual grocery items have come down. Fruit and vegetable prices have dropped over the last year, for example. So have milk and cheese prices.
However, the overall cost of groceries is unlikely to fall substantially.
But there is a silver lining. As grocery inflation slows, wages are catching up.
Over the last year, average wages have risen 3.9%, or about three and a half times as fast as grocery prices.
The typical worker now has to work about the same number of hours to buy a week's worth of groceries as in 2019, before the COVID-19 pandemic.
That's good news — even if for many Americans it doesn't feel that way.

There is also a wild effect where people just stop paying attention when prices fall. People went on and on about egg prices in 2022, when they doubled, and have completely forgotten about it as egg prices fell back down.

The price of eggs and the effect on public sentiment

 

[Golden_Jet]

So in non-COVID times (which is what the next CBA will be based on) there is no limit to what the cap can increase by.

I don’t know it’s not written yet.

The MOU for COVID RTP is only meant to cover the period of time when the league is impacted by COVID factors.

No, it’s the rules until MOU expires next year. Read the links I posted.

 

[Soundwave]

So again, players who don't benefit at all are going to risk their year's salary to insist on the cap increasing faster, which doesn't benefit them.

Yep. Makes sense. Leon Draisaitl is gonna risk his $14M to ensure a faster cap increase that does not benefit him at all.

Most of the players benefit from a huge rise in the cap overall.

If I'm a player and my contract is up 3 years from now, a $105 million cap in 26-27 is just fine with me even if that's not the exact year of my UFA or RFA. It means I'm looking at maybe a $110 mill cap by the time my next deal is up.

Most players don't have long term deals, the majority of the PA are guys who have contract negotiations upcoming in the next 2-4 years. McDavid, Matthews, Q. Hughes, Makar, Rantanen, Bedard, etc. etc. fall into that category.

 

[FriendlyGhost92]

Most of the players benefit from a huge rise in the cap overall.

If I'm a player and my contract is up 3 years from now, a $105 million cap in 26-27 is just fine with me even if that's not the exact year of my UFA or RFA. It means I'm looking at maybe a $110 mill cap by the time my next deal is up.

Most players don't have long term deals, the majority of the PA are guys who have contract negotiations upcoming in the next 2-4 years. McDavid, Matthews, Q. Hughes, Makar, Rantanen, Bedard, etc. etc. fall into that category.

Nobody contested that the players don't benefit from an overall cap increase. That's not the argument.

The argument is that the majority don't benefit from it increasing over 1-2 years rather than 3-5. Because the majority of them aren't FAs over that 1-2 year period.

And of the ones who are, it's still the top tier UFAs that will chew up the majority of that cap. It wont affect the peons.

Try again.

 

[Soundwave]

I don’t know it’s not written yet.

No, it’s the rules until MOU expires next year. Read the links I posted.

The fact is far as I know aside from the COVID MOU which was only enacted because of a freaking global pandemic, there has never been in any other CBA contract from 05-06 onwards any kind of limit on the salary cap and how much it can increase by.

I don't expect the next "normal" CBA to be any different. It's not the players responsibility to prevent a GM from having too much cap space and spending it on a dumb contract or two or three ... as a matter of fact that's only good for players.

 

[SaltyElkHunter]

What a crock of sh!t...

I randomly chose dates on Ticketmaster for 3 seats (current starting price per ticket):
Oct 24 - $47.60
Nov 20 - $33.93
Dec 7 - $50.31

There's also seats in the 2nd level for under $100 each at many of the games. Parking is $30-$40 depending on the day. Gas is less than $20, and most liklely under $10. So you can get to a game in the nosebleeds for ~$200. Reasonably goos seats would be ~$320 to plenty of games.

Get over yourself.

Well we live 2 hours away from LA so gas is considerably more, I have a long bed truck so parking is limited and expensive, I’m not going to a game 2 hours each way, not to sit center lower level. So yeah you’re as wrong as you could get.

 

[Soundwave]

Nobody contested that the players don't benefit from an overall cap increase. That's not the argument.

The argument is that the majority don't benefit from it increasing over 1-2 years rather than 3-5. Because the majority of them aren't FAs over that 1-2 year period.

And of the ones who are, it's still the top tier UFAs that will chew up the majority of that cap. It wont affect the peons.

Try again.

I don't think that really matters. Even if I'm a UFA and my next time period to negotiate a new deal is say in 3 years, I don't mind if the cap skyrockets in the next 2 years to like 108 million or something.

All that means is I know for sure the cap will be a minimum of 108 million, whether it happens to align exactly in my UFA/RFA period exactly is kind of irrelevant, as long as it happens before or right as I'm signing.

The sooner the better actually. The sooner you get to 105 say, the faster you will have a 110 mill cap, 115 mill cap, etc. etc.