The good news is, the salary cap could increase by $1MM for the 2022-23 season. The bad news is, significant movement of the upper limit is not expected until 2026-27. Frank Seravalli of Daily Faceoff reports that the league is projecting a $4.8B hockey-related revenue for the 2021-22 season, which will actually mean the escrow debt that the players owe will actually increase. Seravalli expects there to be a $1MM increase in each of the next four offseasons as the revenues bounce back and players are able to pay off the $1.1B in debt.
When revenues dropped significantly last year, it caused a huge discrepancy in the normal 50-50 split between player salaries and owner revenues. Suddenly, players were being paid much more than their allotted half, meaning the difference would have been held in escrow. In the CBA negotiations that took place last year, the players and owners agreed to a salary deferral and fixed escrow rates, in exchange for a (relatively) flat cap until those debts—the ones caused by player salaries far outreaching 50% of hockey-related revenue—were paid back. Seravalli reports that the balance owed is expected to reach $1.1B after final accounting of the 2020-21 season.
If there are just $1MM increases in each of the next four offseasons, teams will have to be extremely careful how they spend money. Seven teams are already over the cap ceiling for next year, and though long-term injured reserve can help some of them, there’s just not a lot of wiggle room to work with. It also may explain why three teams are currently under the lower limit, with money still to spend to get to the cap floor of $60.2MM. Thirteen teams currently have cap commitments of less than $70MM for the 2021-22 season, giving them room to operate moving forward (while keeping costs down in the meantime).
A $1MM increase may seem like a good thing after three years at the same $81.5MM, but the squeeze is going to be apparent quickly as we move through the next few seasons without any meaningful change.
Heh, so much for the people whining for GMs to spend more-more-more, because Surely The Cap Will Go Up … blithely ignoring the gargantuan bite COVID’s taken out of revenues. All these overpays are going to bite very hard. And not the least which in the next couple of years, where players are going to point in anger at the contracts given out this year, and the teams are going to respond with “We’re just out of money.”
Actually, given that … if I’m running Ottawa, Buffalo, Detroit, New Jersey: this is the time to stand pat. Get to the floor, of course, fill out the roster, but spend nothing more. Write this season off. Because I think having lots of cap space available NEXT year will turn up a lot of bargains.
And this is why I do not want the Rangers getting Eichel, they are improved enough just getting Galante and promoting talent from within so we can better navigate future moves.
If Strome is included in the trade the difference is around $5mil per.
If all their prospects/younger players develop that would make it impossible to keep them all together beyond about 5 seasons.
But as long as the NYR say no to any of their top 5 or 6 younger players or prospects to a Eichel trade then you will have not to worry about a trade for Eichel anyways.
Mm, the Rangers are in something of a precarious situation, though. A lot of contracts come off the books next year, but those include Zibanejad, Fox, Strome, Georgiev, Kakko … guys who are going to expect to be paid. (Heck, what would Mika fetch on the open market today? $10 million? More?)
And this isn’t a young team either: most of their core will be just short of 30 next season or older. We don’t KNOW that the likes of Lafreniere and Kakko are going to turn into preeminent stars. The Rangers fan base just hope really hard that they do, but we all know about top ten draft picks that don’t pan out. (Say, how did Lias Andersson work out for you guys?) So … the Rangers just might be wanting to go for it now.
How many contracts were structured “wishing” the cap increases were going to be much more than this? Some teams seemed to be in deficit-spending mode, anticipating the ability to draw on the First National Bank of the NHL to cover their stupidity.
What actually suprises me the most is how few teams are really in any serious cap trouble right now. Seattle taking some of these contracts off of teams hands was actually big help.
What also seems ironic is that teams with lots of cap space right now (cough, cough, the Preds) really have no free agents of consequence to sign now even if they wanted to. The smart teams acted decisively while others (cough, cough, the Preds) are left with cap space and nothing else.
@Gbear – I wholeheartedly agree about those Nashville Cats. Of all the teams I had looked at on CapFriendly, I was surprised at the amount of work left to be done for GMDP. Many other teams will have juggling to do, but it doesn’t seem like NSH will be one of them.
The system needs the occasional compliance buyout to function. The first CBA with the cap had them. The first extension of that CBA had them. Many teams banked on them being part of the most recent CBA but they were not.
Washington was very open about it’s plans to use a compliance buyout on the final years of Oshie’s deal, which is why he was mentioned as expansion draft fodder so often. The Pens never admitted this, but I’m sure that was the plan for Jack Johnson’s contract.
Still, “you go to war with the army you have not the one you want” so any GM using the flat cap as an excuse is using it as just that, an excuse. Lots of teams have figured out how to manage the new environment and adjusted accordingly.
Lol. Rangers fans wishing to unload trash for an elite franchise center. Keep dreaming. As far as Sabres are concerned, they don’t have to move Eichel NO MATTER how much his agents cry to the public. And looks like Adams is getting a head start practicing selling players on minimal contracts for the not so large cap increases. Insider trading??? Lol. Ugh this is going to be a rough rebuild!
The NHLPA is to blame for giving in to the owners during every lockout or stoppage. What other league has to pay back escrow and deal with this shit. Bettman is garbage but he sure knows how to keep the players in place. Imagine telling all these NBA players getting supermax extensions that they have to put half their contracts in escrow to make the owners (billionaires) whole again.
Agree 100%!
And this is why any team deciding to do a full rebuild right now is foolish. Players are available now and for the next few seasons that normally would not be out there in a rising cap world. Teams like the Kings have jumped on this current market to speed up their rebuild while teams like the Preds sit on their hands.