The salary cap could be going up even higher than the NHL projected, as revenue grows
Bleacher Report: Frank Seravalli on the rising salary cap and that it could have higher than their initial projections.
** NHLRumors.com transcription
“Also a brief picture into the rising salary cap, so we know that it’s $95 million this season, and we know that it’s on paper to be 103, 104 next season. Is that number really closer to 107? Is the 113 million number, is that really close to, closer to 120 by the time it’s all said and done? Those numbers that had been published by the NHL and NHLPA are the minimum. They are the threshold of what is expected to be the salary cap numbers so that teams can plan.
It’s unprecedented. We’ve never had the league in the Union put out those numbers multiple years ahead of time. Usually, we get next season’s number in June, and that’s what teams have to play with. Now they’ve been able to see them concretely. The thing is, they might be getting even better for players and teams, because revenues continue to rise. And because the cap is linked to a 50-50 revenue split, the truth is, NHL players are actually going to be getting topped up from last season.
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They didn’t collect their 50% share. They were south of that on their paid and published salaries; they need to get topped up a percentage still to be determined, what it is from last year. So they’re going to all be getting checks in the mail at some point, probably in November or December, after the final accounting. Rather than do that moving forward, they could just increase the salary cap to a more accurate projection, so that owners aren’t having to dig into their pockets after the fact and cut checks.
Make that cap 107, make it 108, make it 120, so that that 50-50, split is designated up front, and teams have the ability, as they’re building, to spend to that number. Not a forced number. Don’t have to spend to it, which, by the way, is a very important point and distinction to make.
Just because the rising the salary cap is rising, does not mean that every team will be spending to 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 US is like closer to 150 Canadian or, if not more than that, 165. Whatever the conversion is, it’s a ton. You earn all your revenue, your ticket sales, your sponsorships, your TV deal, all those things are in Canadian dollars.
So how, with it rising in such a significant way? How can you possibly charge your fans, your sponsors, your corporate partners that much more each season to keep up with that growth? The answer is you can’t. So if you don’t want to go into your own pocket to spend and dump cash back into your business, you have to then put a cap on what your hockey team can spend from a hockey operation standpoint.
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But this is the important part. They are not alone. It’s not just Canadian small market teams. I’m told there’s at least one original six big market team that is looking in the very near future at having to cap their spending because they’re also in a similar spot. They’re not willing to dig into their pocket and have used huge cash calls. They’re going to be on a budget. And so I think this is going to be a big storyline to watch as the seasons go on.”
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