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

[Tawnos]

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.

OK, so this is a basic misunderstanding of what happened on your part. Part of the MOU was defining the terms of how things would go during and right after the pandemic. But another part of the MOU was about working on some issues that they were going to need to work on in 2022 anyway. Both sides wanted to make sure there was no chance of a lockout during a global health emergency, in case that was still happening by 2022.

One of those issues was the amount of escrow being withheld from the players during the season. They wanted a cap on how much could be withheld. In order to accomplish that, the league wanted a limit on how much the cap could increase. That reduces their risk in holding back less from the players paychecks.

 

[FriendlyGhost92]

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 exactly in my UFA/RFA period exactly is kind of irrelevant, as long as it happens before or right as I'm signing.

I'm very clear that you don't think any logical argument matters if it counters your insistence on immediate drastic cap increases lol.

Again, failing to see why Leon Draisaitl is going to risk his $16.5M salary to make sure the cap goes up $20M over two years, rather than five.

 

[Soundwave]

I'm very clear that you don't think any logical argument matters if it counters your insistence on immediate drastic cap increases lol.

Again, failing to see why Leon Draisaitl is going to risk his $14M salary to make sure the cap goes up $20M over two years, rather than five.

5 years is a ridiculously long period when it's not warranted IMO.

The cap has already been slowed for 4 years now because of COVID, 5 more years of artifically low cap growth would be almost a decade.

That's the majority of player primes in this league, I think 5 years is a bit much.

2-3 years actually is not unreasonable at all, that's already like 8 years impacted by COVID, I think the players will agree they've given up more than enough.

They were supposed to pay back their debt, they did that way ahead of schedule. There was worry that COVID would damage the long term finances of the game, instead revenue is at record highs, way higher than pre-COVID.

How many crosses are the player's expected to bear here? They did everything they were supposed to with COVID, stayed locked in hotels for weeks on end, some of the players weren't able to visit family for a year plus depending on where they were playing, for the good of the league ... I think you are being unreasonable in saying they should sacrifice again for another 5 years when there is clearly no COVID emergency at all (based on NHL revenues there is only a post COVID revenue boom).

If I was a player I would say "f*** that, we paid our dues for COVID and then some, I only got a limited number of years to make money for me and my family". Meanwhile the NHL is making a fortune of approaching 7 billion in revenue and bonkers $1 billion expansion fees, lol (which is a different subject but the PA should totally go after some portion of that, people in expansion markets are coming to see NHL players, without that an expansion team isn't worth $100k).

 

[FriendlyGhost92]

5 is a ridiculously long period when it's not warranted IMO.

The cap has already been slowed for 4 years now because of COVID, 5 more years of artifically low cap growth would be almost a decade.

That's the majority of player primes in this league, I think 5 years is a bit much.

2-3 years actually is not unreasonable at all, that's already like 8 years impacted by COVID, I think the players will agree they've given up more than enough.

They were supposed to pay back their debt, they did that way ahead of schedule. There was worry that COVID would damage the long term finances of the game, instead revenue is at record highs, way higher than pre-COVID.

How many crosses are the player's expected to bear here? They did everything they were supposed to with COVID, stayed locked in hotels for weeks on end, some of the players weren't able to visit family for a year plus, for the good of the league ... I think you are being unreasonable in saying they should sacrifice again for another 5 years when there is clearly no COVID emergency at all (based on NHL revenues there is only a post COVID revenue boom).

I'm not sure what you're not getting about this...

Why. Do. Players. Who. Aren't. Up. For. New. Contracts. In. Those. Two. Years. Risk. Their. Salary. To. Make. Sure. The. Cap. Skyrockets. In. Those. Two. Years.

The answer, which you keep avoiding, is they don't.

 

[majormajor]

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.

Sounds like you just bought the wrong vehicle for going places.

But even at $5 per gallon, I can't figure out how you're spending more than $40 on that round trip.

Anyways the NHL has nothing to do with your mystery $800 going missing, not when the tickets were quoted at $50 each.

 

[FriendlyGhost92]

Sounds like you just bought the wrong vehicle for going places.

But even at $5 per gallon, I can't figure out how you're spending more than $40 on that round trip.

Anyways the NHL has nothing to do with your mystery $800 going missing, not when the tickets were quoted at $50 each.

"You bought a gas guzzler" doesn't really change his claim that the price of gas has inflated.

 

[Soundwave]

I'm not sure what you're not getting about this...

Why. Do. Players. Who. Aren't. Up. For. New. Contracts. In. Those. Two. Years. Risk. Their. Salary. To. Make. Sure. The. Cap. Skyrockets. In. Those. Two. Years.

The answer, which you keep avoiding, is they don't.

They're not risking anything. The players case for a higher cap is rock solid and it's hard for the NHL to argue against that.

The NHL is not going to risk a booming business and make the league look bad just as they're trying to welcome two new cashbag expansion franchises into the mix by having a lock out because they want to drag out COVID economics and try and milk it an extra 1-2 years when it's plainly obvious the pandemic is over.

If anything the NHL should be shit scared that the PA doesn't go after that juicy expansion fee money. They would have a case that some portion of it should be treated as HRR, if those fans in those new markets aren't coming because of NHL players, who exactly are they coming to see? The mascot? The owners? You'd have to pay ME to spend 2 hours of my time watching that. Those expansion franchises are essentially worthless without players, one has to wonder how long the PA will just go along with not getting any cut of that money at all. When it was 100 million expansion fee that was one thing, but at 1 billion? Are you kidding me?

 

[FLAMESFAN]

Maybe they can push some of these big profits into cutting ticket prices?
LOL, who am I kidding

 

[majormajor]

"You bought a gas guzzler" doesn't really change his claim that the price of gas has inflated.

He was talking about California prices, which are a policy choice to lower emissions.

Nationwide, gas came down after 2022.

This is from a sampling of 900 gas stations:
US Regular All Formulations Gas Price

$5 a gallon at peak in 2022 and now down closer to $3 a gallon.

Again, no one pays any attention to prices that are flat or on the way down. It's all panic on the thing going up and then forget it and move on to the next thing going up.

That or spend luxuriously, by the standards of your parents generation, and then complain about how poor you are in this economy. My dad was a doctor and he never in his life had deluxe food items delivered to his house from the grocery store. We went and picked them up.

Again I think there are real people suffering badly in this economy, but it's not the people who own $700k homes getting doordash and driving overweight vehicles.

 

[SaltyElkHunter]

Sounds like you just bought the wrong vehicle for going places.

But even at $5 per gallon, I can't figure out how you're spending more than $40 on that round trip.

Anyways the NHL has nothing to do with your mystery $800 going missing, not when the tickets were quoted at $50 each.

 

[Tawnos]

He was talking about California prices, which are a policy choice to lower emissions.

TBH, this sounds an awful lot like CA energy policy working as designed.

 

[majormajor]

TBH, this sounds an awful lot like CA energy policy working as designed.

Exactly. The point is to get you to stop driving a heavy truck two hours each way.

 

[Soundwave]

The other point I'm sure the NHLPA is going to be shown by its players ...

The NBA salary cap has gone from 109 million to 140 million (soft cap too) from pre COVID (2019) to post COVID (2024). That's a 28% increase in their salary cap but revenue has only gone from 8.76 billion to 10.58 million in that same period of time, so their revenue has only increased by about 20% pre COVID to post COVID and yet NBA players enjoy a 28% higher salary cap.

And before anyone asks, no the new NBA TV deal does not factor into these numbers as it does not begin until the season after this next one. Once that happens the NBA cap will skyrocket again.

Compare to the NHL. Revenue has gone up 32% from 18-19 to 22-23 (pre/post COVID) in only 4 years. Yet the NHL cap has only gone up about 10.6%, versus 28% for the NBA. Even though the NHL has a higher increase in revenue.

The NFL cap has similarly increased by almost 29% in the same period of time (2020 versus today) including a record $35 million surge in the cap in the last season.

I'm sorry I know some people are going to twist themselves into a pretzel to say why this isn't a big deal, but I can't look at that and not feel like NHL players aren't getting totally hosed. NHL revenue is growing faster than the NBA, but the cap which is supposed to be tied to revenue is growing at about 1/3 the rate, lol.

At some point you are just abusing the "COVID emergency" excuse if you're the NHL.

 

[Tawnos]

The other point I'm sure the NHLPA is going to be shown by its players ...

The NBA salary cap has gone from 109 million to 140 million (soft cap too) from pre COVID (2019) to post COVID (2024). That's a 28% increase in their salary cap but revenue has only gone from 8.76 billion to 10.58 million in that same period of time, so their revenue has only increased by about 20% pre COVID to post COVID and yet NBA players enjoy a 28% higher salary cap.

And before anyone asks, no the new NBA TV deal does not factor into these numbers as it does not begin until the season after this next one. Once that happens the NBA cap will skyrocket again.

Compare to the NHL. Revenue has gone up 32% from 18-19 to 22-23 (pre/post COVID) in only 4 years. Yet the NHL cap has only gone up about 10.6%, versus 28% for the NBA. Even though the NHL has a higher increase in revenue.

The NFL cap has similarly increased by almost 29% in the same period of time (2020 versus today) including a record $35 million surge in the cap in the last season.

I'm sorry I know some people are going to twist themselves into a pretzel to say why this isn't a big deal, but I can't look at that and not feel like NHL players aren't getting totally hosed. NHL revenue is growing faster than the NBA, but the cap which is supposed to be tied to revenue is growing at 1/3 the rate, lol.

At some point you are just abusing the "COVID emergency" excuse if you're the NHL.

You really can't wrap your head around the idea that the players get the same amount of money no matter what the cap itself actually is, can you...

 

[Golden_Jet]

Compare to the NHL. Revenue has gone up 32% from 18-19 to 22-23 (pre/post COVID) in only 4 years. Yet the NHL cap has only gone up about 10.6%, versus 28% for the NBA. Even though the NHL has a higher increase in revenue.

That’s 5 years

 

[Soundwave]

That’s 5 years

Yes 5 years. Still the percentages stand, 5 years for all leagues, the NHL has great revenue growth and yet by far the worst cap growth.

And we expect players to just be OK with this indefinitely because .... ?

You really can't wrap your head around the idea that the players get the same amount of money no matter what the cap itself actually is, can you...

The cap number is vitally important to what players can negotiate on deals.

Why do you think Shesterkin and Swayman aren't just bending over and taking team friendly 88 million cap deals. Because they and their agents know full well the cap is going to have to be way more than 88 million soon enough. They'd be stupid to take a long term deal that's acceptable even for a 92 million dollar cap, the cap is going to blow well past that.

That's not even based on happy wishful thinking of revenue going up to XYZ in the future, that's based on what revenue is today, here, now, probably north of 6.5 billion at least. We'll probably find out at the GM meetings in the winter that NHL revenue exceeded 6.6 billion last season.

 

[Tawnos]

Yes 5 years. Still the percentages stand, 5 years for all leagues, the NHL has great revenue growth and yet by far the worst cap growth.

And we expect players to just be OK with this indefinitely because .... ?



The cap number is vitally important to what players can negotiate on deals.

Why do you think Shesterkin and Swayman aren't just bending over and taking team friendly 88 million cap deals. Because they and their agents know full well the cap is going to have to be way more than 88 million soon enough. They be stupid to take a long term deal that's acceptable even for a 92 million dollar cap, the cap is going to blow well past that.

This is always how it's worked. The Rangers signed Panarin to that $11m+ deal expecting that it would cost less against the cap over time. His agents negotiated with the team knowing that they expect that. Nothing about this situation is any different.

 

[Soundwave]

This is always how it's worked. The Rangers signed Panarin to that $11m+ deal expecting that it would cost less against the cap over time. His agents negotiated with the team knowing that they expect that. Nothing about this situation is any different.

It's very different I would argue.

In the past you were hoping for/projecting for great revenue with no gauruntee.

This is a bizarre situation where because of a freak occurence (COVID, global pandemic, first in 100+ years) you have a cap that had to be restricted and money had to be paid back, but at the same time revenue and inflation has increased massively.

Not "maybe", 6.43 billion is cleary as day 32% higher than pre COVID.

That changes the dynamic entirely, if you're an agent and you're not telling your client that they have to be extremely careful about signing a long term deal now because the cap could very well be 20-25% higher in 2 years, you're not doing your job.

You have to price in a player's long term extension at this point against the basis of a 105-110 million cap, not 88 million with wishful dreams of maybe increasing to 110 in 5 years. The revenue is already there to support 100+ million, today, now.

I'm sure Swayman's agent, Shesterkin's agent, etc. made their client's 100% aware of this. This is a weird outlier situation that may never happen again, but as it is happening you have to account for it. After next season, you are probably going to see a 2-3 year period of unprecedented cap increases.

People are getting mad at these guys for not doing the whole "just sign already damnit, it's almost October", but I get it. That's kind of a f***ed up situation to be put into.

 

[FriendlyGhost92]

They're not risking anything. The players case for a higher cap is rock solid and it's hard for the NHL to argue against that.

The NHL is not going to risk a booming business and make the league look bad just as they're trying to welcome two new cashbag expansion franchises into the mix by having a lock out because they want to drag out COVID economics and try and milk it an extra 1-2 years when it's plainly obvious the pandemic is over.

If anything the NHL should be shit scared that the PA doesn't go after that juicy expansion fee money. They would have a case that some portion of it should be treated as HRR, if those fans in those new markets aren't coming because of NHL players, who exactly are they coming to see? The mascot? The owners? You'd have to pay ME to spend 2 hours of my time watching that. Those expansion franchises are essentially worthless without players, one has to wonder how long the PA will just go along with not getting any cut of that money at all. When it was 100 million expansion fee that was one thing, but at 1 billion? Are you kidding me?

What the f*** do you not get about a CBA impasse could cause a lockout?

Yes. They are risking their salary to fight an issue they don't benefit from.

This isn't difficult to understand.

 

[Golden_Jet]

And we expect players to just be OK with this indefinitely because .... ?

Until the next CBA yes,
Players aren’t losing any money and won’t be losing any money chicken little.

 

[Tawnos]

It's very different I would argue.

In the past you were hoping for/projecting for great revenue with no gauruntee.

This is a bizarre situation where because of a freak occurence (COVID, global pandemic, first in 100+ years) you have a cap that had to be restricted and money had to be paid back, but at the same time revenue and inflation has increased massively.

Not "maybe", 6.43 billion is cleary as day 32% higher than pre COVID.

That changes the dynamic entirely, if you're an agent and you're not telling your client that they have to be extremely careful about signing a long term deal now because the cap could very well be 20-25% higher in 2 years, you're not doing your job.

You have to price in a player's long term extension at this point against the basis of a 105-110 million cap, not 88 million with wishful dreams of maybe increasing to 110 in 5 years. The revenue is already there to support 100+ million, today, now.

I get all that, but here the thing: If the revenue were already there to support 100+ million, then the players wouldn't have had to give the owners 3% of their salary this past season. Despite the amount revenue growth has outstripped the cap increases, players are still receiving more than 50% of HRR across the whole season.

Under a standard calculation, you're right the revenue is there for that. In practice, things are in a really good spot at the moment. Very close to a legitimate 50/50 split.

 

[Soundwave]

What the f*** do you not get about a CBA impasse could cause a lockout?

Yes. They are risking their salary to fight an issue they don't benefit from.

This isn't difficult to understand.

The NHLPA would have to be the biggest suckers of a PA in pro sports to get scared by that.

10.6% increase in cap versus a 32+% rise in salary cap is hilariously bad to begin with, I don't think that would fly in any of the other major pro sports.

No one in the NHLPA believes the NHL is going to risk a lock out over that. They have no ground to stand on whatsoever, it's a complete paper threat.

If business in the NHL was terrible and revenue was down pre-COVID and COVID somehow devastated the league, OK, but we are MILES away from that, the reality is the complete opposite actually, I think the NHL has higher revenue increase than both the NBA and MLB.

The players deserve a (big) bone being thrown their way, even the owners and Bettman know that.

 

[Soundwave]

Until the next CBA yes,
Players aren’t losing any money and won’t be losing any money chicken little.

The players have done their part, they deserve a much larger cap.

You can't hide 32% rising revenue and growing (might over 40% or more by the time the new CBA is even up).

It's not a matter of chicken little, I'm not sure why people are so scared of this anyway. The players deserve it 100%. If your business is up that much and the players are the only reason it's worth anything at all, why shouldn't they see the benefit of a cap rise that NBA and NFL and MLB are enjoying.

The cap was supposed to reward players with a higher cap based on higher revenue. Wasn't that the whole point? Owners get some cost certainty, but based on revenue, players get rewarded if the league grows with a higher salary cap and higher salaries subsequent. So why is it so many people are uncomfortable with the idea of players getting their due.

88, even 92 million dollar cap is a joke relative to the money the NHL makes today.

 

[Ciao]

@Soundwave and any others who seem to think the players get some kind of bonus if the cap goes up -- they don't.

No matter how high or low the cap is, the players collectively still get 50% of HRR.

The thing is, the higher the cap, the more escrow that's deducted from their individual earnings, which I'm sure burns their ass.

I'm sure most players prefer to keep the cap and escrow low, unless they don't already have a contract.

$775,000 doesn't go as far as it used to, with agents' commissions, escrow and taxes.

There are a whole lot more players near the bottom of the pay scale than near the top. Helping the $5-million+plus players get an extra million probably isn't nearly as popular within the PA as helping the $5-million-minus players keep more of their hard-earned dough. There are a lot more of the unders than the overs on every team and throughout the league.

 

[Soundwave]

@Soundwave and any others who seem to think the players get some kind of bonus if the cap goes up -- they don't.

No matter how high or low the cap is, the players collectively still get 50% of HRR.

The thing is, the higher the cap, the more escrow that's deducted from their individual earnings, which I'm sure burns their ass.

I'm sure most players prefer to keep the cap and escrow low, unless they don't already have a contract.

$775,000 doesn't go as far as it used to, with agents' commissions, escrow and taxes.

There are a whole lot more players near the bottom of the pay scale than near the top. Helping the $5-million+plus players get an extra million probably isn't nearly as popular within the PA as helping the $5-million-minus players keep more of their hard-earned dough. There are a lot more of the unders than the overs on every team and throughout the league.

They get higher salaries if the cap goes up over time.

Otherwise I'm sure the NHL would love to make the case that the cap should stay at 88 million indefinitely.

Every NBA, NFL, MLB player would laugh at NHL players for taking that deal, escrow or not.