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

[Soundwave]

There's a good thread on Reddit posted by a user named tkecanuck341 that discusses the fact that at 6.43 billion in NHL revenue for 22-23, the NHL is millions behind what the cap actually should be based on a 50-50 HRR split:



He goes into big detail on it, but more or less I believe he is correct. 6.43 billion in HRR is 32% higher than the 4.86 billion it was in 18-19, the last year before COVID hit, when the cap used to be 79.5 million. An increase of 32% over 79.5 mill cap (as it was in 18-19) would be 105 million almost. Now granted there's an extra team in Seattle (32 teams instead of 31), but still the cap should probably be over $100 million based on revenue already.

This has been held back because the players had to pay back the owners for losses during COVID, but that was fully paid off last season already I believe, two years ahead of schedule.

Now I believe the NHL has a mechanism where the cap can only rise so much the next two years (6%?) because of COVID conditions, but after that, that stipulation goes away.

I wonder how the NHL will handle this? Maybe they allow the cap to hit 100 mill for the 25-26 season to prevent a massive spike the following year? Revenue is headed towards 7 billion in 2 years, on a 7 billion HRR 50-50 split between owners and players, the cap should be a whopping $110+ million approximately.

How much longer do we think the players/PA will accept far less than 50% of HRR that they're entitled to now that the COVID debt is paid off?

Click to read more...

 

[centipede2233]

I am more worried about paying rent then how the NHL and players handle their billions/millions.

 

[Soundwave]

I am more worried about paying rent then how the NHL and players handle their billions/millions.

Unfortunately inflation sucks for consumers, but is good for corporate entities (which the NHL is basically). A big chunk of the cap rise is probably because of inflation in general, everything being more expensive = higher revenue.

 

[LemonSauceD]

I’m honestly afraid what Jim Benning would’ve done had the cap jumped $15-25M if it weren’t for Covid. LOL.

 

[sena]

I think these numbers originate from Forbes, But they aslo state. "incuding arena proceeds from non NHL events"
So who knows how much that is?

 

[ricky0034]

the current CBA says that the cap can only go up by a maximum of 5% a year

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

Maximum year-over-year increase in the UpperLimit will be the lesser of 5% and the trailing twoyear average HRR growth percentage (measuredusing Final HRR from the League Year four yearsprior, Final HRR from the League Year three yearsprior, and Preliminary HRR from two years priorand after taking into account any FX impactadjustments)

 

[Soundwave]

the current CBA says that the cap can only go up by a maximum of 5% a year

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

That essentially only applies for next season, where it will increase by around 5% (although this year was also supposed to be 5%, which should have meant a 87.7 mill cap but instead it increased to 88 million, so I'm not sure if even this is rock solid or just a starting point).

Based on last season, the cap should be a minimum of about 92.5 million for next year.

However the 5%-ish rule is basically over after that as the CBA expires after 25-26 season and all COVID era stipulations are basically over.

So that means for the 26-27 season the cap could skyrocket well past $100 million even just based on today's revenue, let alone increasing revenue.

If the players asks for the normal 50-50 HRR split, as is their right, the cap could balloon to like $110+ million, lol, that's why I'm asking how the NHL is going to handle this. Maybe the PA can be talked into taking less due to escrow, but I have a hard time seeing them taking way below 50% HRR for years on end.

The cap is way lower than what it should be based on HRR, that can't stay that way much longer now that the COVID debt is paid off.