The salary cap could rise even higher than expected as NHL revenues grow

The salary cap could rise even higher than the NHL expected as revenue grows

Bleacher Report: Frank Seravalli on the rising salary cap and how it could be higher than their initial projections.

** NHLRumors.com transcription

“Also, just a quick look at the salary cap going up, so we know it’s $95 million this season, and we know next season on paper it’s going to be 103, 104. Is that number really closer to 107? Is the 113 million number, is that really close, closer to 120 by the time it’s all said and done? Those numbers put out by the NHL and the NHLPA are the minimum. They form the threshold of what are expected to be salary cap numbers for teams to plan for.

It’s unprecedented. We have never seen the league in the Union release these figures several years in advance. We usually get next season’s number in June, and that’s what teams have to play with. Now they have been able to see them in concrete terms. The point is, they might get even better for players and teams as revenues continue to rise. And because the cap is tied to a 50-50 revenue split, the truth is that NHL players will actually get their money from last season.

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They have not collected their 50% share. They were south of that in terms of their paid and published salaries; they have to top up a percentage yet to be determined, which is what it is from last year. So they will all receive checks in the mail at some point, probably in November or December, after the final settlement. Instead of doing that in the future, they could just raise the salary cap to a more accurate projection so that owners don’t have to dig into their pockets and cut checks afterwards.

Make that cap 107, make it 108, make it 120, so that that 50-50 split is stated upfront, and teams have the ability to spend up to that number as they build. No forced number. You don’t have to spend on it, which by the way is a very important point and distinction to make.

Just because the salary cap is rising doesn’t mean every team will spend on it. Keep an eye on your Canadian small market teams. Calgary, probably to a lesser extent, Vancouver, but Winnipeg, Ottawa, it’s, it’s in US dollars. So $113 million is closer to 150 Canadians or, if not more than that, 165. Whatever the conversion is, it’s a ton. You make all your revenue, your ticket sales, your sponsorships, your TV deal, all those things are in Canadian dollars.

So how, if it rises in such a significant way? How can you ask your fans, your sponsors and your business partners so much more each season to keep up with that growth? The answer is you can’t. So if you don’t want to reach into your own pocket to spend money and put it back into your business, you need to put a limit on what your hockey team can spend from a hockey operations perspective.

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But this is the most important part. They are not alone. It’s not just Canadian small market teams. I’m told there is at least one original team from six major markets that is considering having to curtail their spending in the very near future as they are also in a similar situation. They are not willing to dig into their pockets and have made huge cash calls. They will have a limited budget. And so I think this is going to be a big storyline to watch as the seasons go on.

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