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

[Soundwave]

It's an increase over two years instead of one...

And then in 28-29 GMs are back to having $3M - $4M extra to work with and FAs get squeezed again.

That's not a given, people need to understand $3-$4 million isn't what $3-4 million used to be due to inflation alone.

But even if so, why is that the players' problem?

They've done their part in paying off the COVID debt and playing ball with the NHL's Return to Play rules. There's no obligation to keep taking less money for another half decade "just because GMs can't handle moneyz!".

If I'm one of the probably 40-50%+ of players who have a contract renegotiation coming up in the next 2-4 years, I'd say "tough shit, that's our money, we're entitled to it and I want the maximum cap to be able to get the biggest contract for myself". There's nothing wrong with asking for what you're owed.

If the league is bringing in ridiculous sums of money, like $7 billion/year we could be looking at fairly soon, you can't expect players to continue to take COVID-era type money forever. It's frankly not fair at all. The NHL is the one that insisted on 50-50 HRR split in the first place.

 

[Tawnos]

I believe the NHLPA was given a choice of a higher cap in the season it went to 83.5 million (only a 1 mill rise) or to accept the 1 mill rise, but that would enable them to pay back their debt faster. They chose the lower raise to pay back the cap faster.

Actually this was probably a ploy by the owners to get the PA to take the bait, take a cap raise for one year and hopefully not pay off the debt quickly, because if that had happened the Return to Play rules stipulate that the 5% increase escalator would automatically renew itself for an extra season.

The PA was smart and didn't take the bait as such they paid off the debt way earlier and thus avoiding that extra year penalty (effectively).

The players have been taking more like 41% of HRR in recent years to pay off the debt.

They've held up their end of the bargain, you can't expect them to just take 5% more a season "just because it's a nice number" indefinitely.

The $1m increases were stipulated in the CBA, with the option to go higher if both parties agreed, until the debt was paid off. And similarly, the 5% (which is not the same thing as the escalator) is the maximum with the option to go higher if both parties agreed.

The players got 41% of HRR in recent years to pay off the debt because they got well over 50% of HRR in previous years. IIRC 20-21 was past 75%. As a whole, the years from 19-20 to early 23-24, the players got 50% of HRR. But after the debt was paid off, the league went back to normal 50-50.

Again, the 5% capped increase per year is just a cap calculation. The 50-50 remains in place, so even if salaries paid out don't reach that number, the players still get their money.

 

[Peltz]

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

This thread should really center on Centipede2233's living situation.

He should post his living situation, budget, and zillow links to prospective rental units and we will refrain from focusing on the NHL's salary cap, which is clearly off topic here.

 

[SaltyElkHunter]

I saw this post as well and was wondering if it was legit enough to make it to HF Boards.


This isn’t about you

I mean it kind of is. Fans priced out of the buildings is a problem.

 

[Soundwave]

I mean it kind of is. Fans priced out of the buildings is a problem.

It sucks for lower income fans, but the fact is the NHL must be making *bank* off higher income fans who are willing to pay sky high ticket prices + $20 for a beer and hot dog + a shit ton for parking, etc. etc. etc.

$4.86 billion in revenue from 18-19 season to $6.43 billion in 22-23 (pre-COVID to post-COVID) basically says it all. Over 32% increase in revenue in only 4 years time, even when factoring in there is an extra team now (Seattle), that's a shit ton of money.

We're likely headed to $7 billion in a couple of years.

 

[Larry Hanson]

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.

NHL owners are the ones that killed an entire season (2005) to get a 50-50 HRR split, they can't cry now that players should take far less than 50-50 for many more years when the COVID debt has been paid off like 2 years ahead of schedule.

I don't think the PA will accept taking massively less than 50-50 HRR, once you commit to that you're showing weakness as a PA and may never be able to claw back to 50-50. The owners are the ones that flushed an entire season down the toilet to get 50-50, it would be hard I think now to tell players they ought to take far less than 50-50.

The players aren't getting less than 50%. They have been paying back escrow only because they took more than 50% during Covid when revenues cratered, in the end it still works out to them getting 50% after that debt is paid back. It doesn't matter if the cap goes to 110 million, the players won't get a penny more or less than 50%. I would suspect most players are more concerned with reducing or eliminating escrow than ballooning the cap but we'll likely see a balance that allows for escalating contracts and hopefully lowering escrow.

 

[FriendlyGhost92]

That's not a given, people need to understand $3-$4 million isn't what $3-4 million used to be due to inflation alone.

But even if so, why is that the players' problem?

They've done their part in paying off the COVID debt and playing ball with the NHL's Return to Play rules. There's no obligation to keep taking less money for another half decade "just because GMs can't handle moneyz!".

If I'm one of the probably 40-50%+ of players who have a contract renegotiation coming up in the next 2-4 years, I'd say "tough shit, that's our money, we're entitled to it and I want the maximum cap to be able to get the biggest contract for myself". There's nothing wrong with asking for what you're owed.

If the league is bringing in ridiculous sums of money, like $7 billion/year we could be looking at fairly soon, you can't expect players to continue to take COVID-era type money forever. It's frankly not fair at all. The NHL is the one that insisted on 50-50 HRR split in the first place.

Historically the league typically sees $200M - $250M give or take in extra revenue every season. Those increases occur, in part, because of inflation.

$250M split in half and divided 32 ways is just under $4M.

 

[Soundwave]

The players aren't getting less than 50%. They have been paying back escrow only because they took more than 50% during Covid when revenues cratered, in the end it still works out to them getting 50% after that debt is paid back. It doesn't matter if the cap goes to 110 million, the players won't get a penny more or less than 50%. I would suspect most players are more concerned with reducing or eliminating escrow than ballooning the cap but we'll likely see a balance that allows for escalating contracts and hopefully lowering escrow.

Well effectively they were taking less than that to pay back what they owed.

The real story is the massive increase in revenue.

There's just no getting around it, $4.8 billion in HRR from 18-19 (last year pre-COVID) all the way up to 6.43 billion in 22-23 is an increase of 32% in only 4 years time.

That's a monstrous increase. The NHL is doing very, very well for itself.

 

[SaltyElkHunter]

It sucks for lower income fans, but the fact is the NHL must be making *bank* off higher income fans who are willing to pay sky high ticket prices + $20 for a beer and hot dog + a shit ton for parking, etc. etc. etc.

$4.86 billion in revenue from 18-19 season to $6.43 billion in 22-23 (pre-COVID to post-COVID) basically says it all.

We're likely headed to $7 billion in a couple of years.

That’s exactly what they are doing. Crates a disconnect between family’s going to games, which effects youth participation, which effects new fans. My kid has no interest in hockey whatsoever. It would cost us almost 800$ to watch a game in LA for the 3 of us after tickets food parking and gas. Seeing the game live is what gets the kids hooked! I’m not hard up for cash but at 800$ there are just better things to spend our money on and get more value. I mean shit we haven’t in a playoff round in a decade what are we really missing.

 

[Soundwave]

That’s exactly what they are doing. Crates a disconnect between family’s going to games, which effects youth participation, which effects new fans. My kid has no interest in hockey whatsoever. It would cost us almost 800$ to watch a game in LA for the 3 of us after tickets food parking and gas. Seeing the game live is what gets the kids hooked!

I think the truth is the NHL audience, at least the part of it that goes to games and buys jerseys and all that is fairly affluent.

That explains how NHL revenue is way up even as prices have gone through the roof.

But really if you think about it, it probably makes sense. Hockey is the most expensive sport to play (out of the "big 4-5" sports). If you're a family that has like 1-3 kids in hockey and are big NHL fans, odds are these days you're probably in a high income bracket versus maybe a household where the NBA or soccer or football is no.1.

Or it may just be that live pro sports is in general becoming something only fairly well off people can afford.

It may not be good for overall participation in the sport, but if the NHL is crying about it ... they're crying all the way to the bank.

 

[Larry Hanson]

Well effectively they were taking less than that to pay back what they owed.

The real story is the massive increase in revenue.

There's just no getting around it, $4.8 billion in HRR from 18-19 (last year pre-COVID) all the way up to 6.43 billion in 22-23 is an increase of 32% in only 4 years time.

That's a monstrous increase. The NHL is doing very, very well for itself.

The cap and revenues are two different things though. The players get 50%, you keep saying over and over again that they don't and tie your argument to the cap number. Whether the cap goes up or not the players aren't taking "massively less", they get the same.

 

[Soundwave]

The cap and revenues are two different things though. The players get 50%, you keep saying over and over again that they don't and tie your argument to the cap number. Whether the cap goes up or not the players aren't taking "massively less", they get the same.

Well that's because the players did legitimately owe the owners money for a COVID debt.

But they paid that off early last season apparently.

So now it becomes interesting because you have a league with sky high revenues in the 6.4+ billion range and probably growing ... at a 50-50 HRR split going forward, that means the players are actually owed a much higher cap than what exists today.

The elephant in the room is the HRR. The NHL is charging out the ass more for basically everything and people and sponsors are willing to pay it, there's also massive inflation that's drive the cap upwards. Even when people say "well inflation is now down to 2%", that alone imbues a cap rise of close to $2 million a year alone, not factoring in other sources of revenue.

 

[Golden_Jet]

It would be large increases for multiple years not just one.

The cap has risen by over $9 million+ in a year (inflation adjusted) in the past, it's hard to make an argument why it can't now if the revenue is there.

I don't know what the exact ratio is, but I'd imagine probably like 30-40%+ of the NHLPA body has a contract coming up for a renegotiation in the next 2-4 years. It may actually be more than 50%, I'd have to take a look.

If I'm an Auston Matthews, I'd be furious at the PA for example if they're not giving me at least a $110 mill cap or so provided the revenue is around 7 billion for the league. If I've purposefully taken less on my current deal to cash in at a future date, I'm well within my rights to expect a normalized cap when COVID debt has been paid off for years by that point.

That's fair, the NHL (no the PA) is the one that argued tooth and nail for 50-50 HRR split.

You can’t just say because it went up 9 million inflation adjusted, in your words , that it should go up by that number again.
It all depends on the calculation.

Not to mention your 9 million number is off, as you calculated that at 50/50 and not 57/43%., split

While being told by several posters, you continue to ignore “expenses” that aren’t included, the lag formula.

Your stating way to many assumptions as facts.

 

[Larry Hanson]

Well that's because the players did legitimately owe the owners money for a COVID debt.

But they paid that off early last season apparently.

So now it becomes interesting because you have a league with sky high revenues in the 6.4+ billion range and probably growing ... at a 50-50 HRR split going forward, that means the players are actually owed a much higher cap than what exists today.

No, they aren't owed a higher cap. We'll see a higher cap but it won't affect their paycheck.
They will get more actual dollars because they won't be paying as much into escrow but they won't see any increase just because the cap goes up.

 

[Soundwave]

You can’t just say because it went up 9 million inflation adjusted, in your words , that it should go up by that number again.
It all depends on the calculation.

Not to mention your 9 million number is off, as you calculated that at 50/50 and not 57/43%., split

While being told by several posters, you continue to ignore “expenses” that aren’t included.

Your stating way to many assumptions as facts.

You should go by revenue as the base number. 6.43 billion 32% more than 4.86 billion that it was 4 years prior (pre COVID to post COVID).

I mean I would love to see the argument then why players should only expect a cap rise of maybe 15%, when your revenue is more than double that.

 

[FriendlyGhost92]

You should go by revenue as the base number. 6.43 billion 32% more than 4.86 billion that it was 4 years prior (pre COVID to post COVID).

I mean I would love to see the argument then why players should only expect a cap rise of maybe 15%, when your revenue is more than double that.

I would love to see your argument why the players are suddenly going to have a hissy fit next year when they seemingly haven't protested the $88M this year.

 

[Soundwave]

No, they aren't owed a higher cap. We'll see a higher cap but it won't affect their paycheck.
They will get more actual dollars because they won't be paying as much into escrow but they won't see any increase just because the cap goes up.

It won't affect existing players who have existing priced in contracts, but most of the league has a new contract coming up in the next 2-4 years.

The cap being higher sure as heck has a bearing on their livelihood and ability to negotiate a higher deal down the line.

 

[Folignos Helmet]

I read there was a similar jump in in the nba that owners tried to get players agree to ease and they said no thanks.

NBA cap jumped 11 and 15 million in subsequent years then went back to a more gradual 4 million lift. I think you could see something similar in NHL after the 5% cap raise lifts.

A couple of correction years of 10M or more then back to a gradual rise.

If/when cap goes to 110m the average salary of a player on a 23 man roster would be 5 million. Curious to see if low end and mid players start to rise or all those gains are at the top end.

 

[Soundwave]

I would love to see your argument why the players are suddenly going to have a hissy fit next year when they seemingly haven't protested the $88M this year.

They just paid off the COVID debt early last season, I don't really see how they could have complained at that point.

Everything to that point was strictly going by the Return to Play rules.

But after 25-26 season, that gets throw in the trash. That's just a fact.

I read there was a similar jump in in the nba that owners tried to get players agree to ease and they said no thanks.

NBA cap jumped 11 and 15 million in subsequent years then went back to a more gradual 4 million lift. I think you could see something similar in NHL after the 5% cap raise lifts.

A couple of correction years of 10M or more then back to a gradual rise.

If/when cap goes to 110m the average salary of a player on a 23 man roster would be 5 million. Curious to see if low end and mid players start to rise or all those gains are at the top end.

Yup, the same thing happened in the NBA, I believe this is why the Warriors were able to shock the sports world and sign Kevin Durant (well they also had Curry signed to a bargain deal).

"GMs are stupid and can't be trusted with lots of money to spend" isn't really the players problem, it's hard I think to make that as a case in a CBA negotiation.

 

[FriendlyGhost92]

They just paid off the COVID debt early last season, I don't really see how they could have complained at that point.

Everything to that point was strictly going by the Return to Play rules.

But after 25-26 season, that gets throw in the trash. That's just a fact.

As you pointed out, the debt was paid early last season... You don't see how they could have complained this summer, about a cap that was set this summer?

 

[Soundwave]

As you pointed out, the debt was paid early last season... You don't see how they could have complained this summer, about a cap that was set this summer?

The cap revenue estimate lags by a year I believe. The 6.43 billion revenue for example is from the 22-23 season, not last season.

Last season is actually probably higher, but we likely won't know exactly what it was until around Christmas time when the GMs have their meetings.

The players have been pretty good about this COVID stuff to be honest, you can't say they have been unreasonable at all. They've basically done everything to the letter that the NHL asked for and paid off their debt 2 years early. They deserve to reap the benefits of massively increase revenue, people come to see the players play last I checked, not the owners.

 

[FriendlyGhost92]

I read there was a similar jump in in the nba that owners tried to get players agree to ease and they said no thanks.

NBA cap jumped 11 and 15 million in subsequent years then went back to a more gradual 4 million lift. I think you could see something similar in NHL after the 5% cap raise lifts.

A couple of correction years of 10M or more then back to a gradual rise.

If/when cap goes to 110m the average salary of a player on a 23 man roster would be 5 million. Curious to see if low end and mid players start to rise or all those gains are at the top end.

I can't claim to know the effects that had on the NBA because I don't watch or follow... But I do recall several cross-over fans pointing out that that drastic increase badly f***ed up the NBA's salary structure.

Those people were using that to cite why the NHL should/would gradually increase rather than drastically.

The cap revenue estimate lags by a year I believe. The 6.43 billion revenue for example is from the 22-23 season, not last season.

Last season is actually probably higher, but we likely won't know exactly what it was until around Christmas time when the GMs have their meetings.

The players have been pretty good about this COVID stuff to be honest, you can't say they have been unreasonable at all. They've basically done everything to the letter that the NHL asked for. They deserve to reap the benefits of massively increase revenue, people come to see the players play last I checked, not the owners.

Cap is determined by two seasons prior and I never said $6.43B was last season.

So again, if they wanted to, why couldn't they have complained this summer about a cap that was set this summer?

 

[Larry Hanson]

It won't affect existing players who have existing priced in contracts, but most of the league has a new contract coming up in the next 2-4 years.

The cap being higher sure as heck has a bearing on their livelihood and ability to negotiate a higher deal down the line.

If the cap jumps a lot higher and UFA's sign higher contracts that's fine but it just increases escrow, escrow was a thing long before Covid. In the end the players get their share regardless of what the cap is set at.

If you want to say that the cap should be higher you're likely right, and it will eventually catch up, but you keep framing this as the league making out like bandits and the players getting robbed, that is just incorrect.

 

[Soundwave]

I can't claim to know the effects that had on the NBA because I don't watch or follow... But I do recall several cross-over fans pointing out that that drastic increase badly f***ed up the NBA's salary structure.

Those people were using that to cite why the NHL should/would gradually increase rather than drastically.



Cap is determined by two seasons prior and I never said $6.43B was last season.

So again, if they wanted to, why couldn't they have complained this summer about a cap that was set this summer?

The Return to Play rules were set and they signed it, what exactly are you going to complain about?

The current CBA is up though after next year. Then the players you can bet your ass are going to going hard on the fact that NHL revenue is through the roof the last 4-5 years.

There's no disguising that fact, even Bettman isn't even trying to hide it, he says straight up they expect large cap increases because he knows full well what he's seeing with revenue numbers.

 

[Larry Hanson]

The players have been pretty good about this COVID stuff to be honest, you can't say they have been unreasonable at all. They've basically done everything to the letter that the NHL asked for and paid off their debt 2 years early.

Of course they were good with it, they still got paid when the league was crippled. Saying they paid off their debt? slow clap I guess.

They deserve to reap the benefits of massively increase revenue, people come to see the players play last I checked, not the owners.

You keep saying this over and over. The players will see the benefits of increased revenue, they get 50%.