Let’s face it, the NHL salary cap hasn’t been very interesting in recent years.
The 2020 COVID-19 pandemic reduced league revenue to the point that it fell 20% in 2019-20 and another 40% in 2020-21. The NHL had to enter into a pandemic contract to pay player salaries, which meant slashing salary cap increases to cover the sudden and unexpected revenue shortfall.
That means the salary cap will increase by nearly $2 million over the five seasons between 2019-20 and 2023-24, creating headaches for team managers and player agents. Even with the large amount of COVID-19 debt paid down, salary cap increases were limited to a maximum of 5 percent per season, a hit the NHL experienced this season ($83.5 million to $88 million).
However, this period is almost over. And it can end with an explosion.
Elliotte Friedman de Sportsnet Hockey Night in Canada aired Saturday night The NHL may have to negotiate a much higher cap hit than the 2020 deal to start next summer. This is because players’ escrow was canceled, and with the new collective bargaining agreement set to go into effect in 2026, the salary cap will remain tied to league revenue as it was in 2005-06 and 2019-20. .
And these profits are quite high.
| the season | Earnings (B) | Cover (M) |
|---|---|---|
*Expansion years when the Vegas Golden Knights and Seattle Kraken joined the league.
As you can see from the figures in the table above, NHL revenue increased more than 20 percent last season from pre-pandemic levels. However, the cap increased only 8 percent, most of which occurred last season.
Previously (from 2006 to 2019), the NHL’s salary cap was set directly from the previous season’s earnings, using a complex formula that divided the players’ 50-50 share by the number of teams in the league. .
Using those calculations, based on last season’s projected $6.2 billion in revenue, the math shows they could have increased the salary cap this season. at least 95 million dollars.
Assuming a similar jump in revenue next season of more than 8 percent, the “old-style” estimate would be about $105 million.
Justified Memorandum of Understanding 2020 As negotiated with the NHLPA, those numbers are unattainable due to the 5 percent cap increase. However, there is a provision that says the two sides can negotiate a higher salary cap, which is what Friedman is talking about.
Freedman’s report said the expected salary cap could rise to between $95 million and $97 million next season, or between $7 million and $9 million, more than double the $4.4 million we expect for 2025-26.
Why would the NHL want to negotiate a higher salary cap than what is in the contract?
The main reason for this is that at some point the deduction will be tied to hockey-related earnings. If the league wants just a 5 percent raise and $92.4 million for next season, they could be dealing with a ridiculous increase in the salary cap in 2026-27, which would be a serious disaster.
Next season’s revenue could easily exceed $7 billion. If the salary cap calculation for 2026 is the same as during the previous collective bargaining agreement, that salary cap could be $112 million or more, which is a staggering jump of around $20 million per season.
Like I said: chaos. (And it’s time for Connor McDavid to become a free agent too!)
Now, there are big caveats here. We’re projecting what earnings will be good going forward, as well as how the salary cap will work in a new deal the two sides haven’t started negotiating yet. Furthermore, we do not take into account that in the past player salary agreements often resulted in huge deposits: quarterly salary withholdings were as high as 17% in some years.
The players absolutely I hate escrow and we do not want to return to the retention levels of six or seven years ago. Therefore, it makes no sense for them to try to increase the discount as much as possible.
And that could very well affect how cap calculations work in a future deal.
While players should be paid the same amount overall no matter what, a higher salary cap has some positives given that their salaries are tied to revenue. With more cap space each season, more teams can compete for free agents, giving players more options. Cap space also makes it easier for teams to retain current players and not have to resort to trades and acquisitions to make drastic changes.
Overall, the top cap creates flexibility in the system.
Limit stagnation? This can cause pain.
Ultimately, I think we’ll see a middle ground here, where the league tries to project where revenue will likely be next season and serve as a middle ground between the $88 million in 2025-26 trying to find the “bridge” cap. and regardless of where the cap is in the first year of the new collective agreement in 2026-27.
According to the information we have, that represents an increase of $92.4 million. Friedman’s $97 million mark seems like an average landing spot.
But we need the NHL and NHLPA to agree on how much more than the established 5 percent figure.
The good news is that these CBA talks are not expected to be a war. Connoisseurs call it “peacetime negotiations” for a reason; When you talk to people behind the scenes on both sides, there is no stomach for a lockout or strike right now.
Therefore, it is unlikely that the owners will try to reduce player profits below 50 percent, which would mean returning to something like the old system we knew and loved before the pandemic.
And yes, more regular year-over-year growth than we have experienced since 2019.
– How does the introduction of expansion teams like the Vegas Golden Knights and Seattle Kraken affect the salary landscape for existing NHL teams?
1. How has the NHL’s revenue increased over the last decade, and what factors have contributed to this growth?
2. How has the salary cap formula been calculated in the past, and what changes have been made recently due to the addition of the Vegas Golden Knights and Seattle Kraken?
3. What is the impact of a higher salary cap on competitiveness among teams and player movements in the league?
4. How do player salaries and escrow work in the current NHL CBA, and how might this change in future negotiations?
5. What are some of the challenges faced by both the NHL and the NHLPA during the collective bargaining agreement negotiations, and how might these impact the final agreement reached?
