Since the NHL salary cap has increased by 28% in the last three seasons......?????

Question

..... 3 seasons from now we may be looking at a salary cap at roughly 64.4 million....ALMOST DOUBLE THE AMOUNT THAT WAS SET POST LOCK OUT!!!!….if history repeats itself……

I realize revenues have increased significantly, but is this defeating the purpose, if the NHL ends up right back where it started with these outlandishly high limitations or caps? Will the owners need to meet again about the prior problem of “cost certainty” in the future? Anybody else see this as a problem or just inflation?

Answer 1

Well ummm considering our national inflation rate is about 3.85%, and Canadas is 1.7%. I think 28% is a little much to adjust for.  I think it certainly is a problem.

What's the point of a cap when your going to increase it by more than 1/4 every (edit**couple of) years? It's going to allow for the rich to get richer and the basement dwellers to be stuck overpaying with the rest of the league. With a cap, teams have negotiating power, if its every increasing, than the players get the leverage.

Answer 2

Really, the point of a salary cap is to keep a league competitive by only allowing teams to afford fewer stars. Small market teams may struggle financially slightly, only if the cap gets above what they can afford, but I don't think it will be a problem. Most teams are WELL under the cap, and it's still forcing the trades and free-agencies of some great players. Look at the Penguins, they went as far as they did because of aquisitions, not payroll. They ranked 20th in terms of pay, 2nd in standings. I feel that the dominant teams are changing consistently enough to say that the cap is doing it's job, except the Red Wing's that stay dominant despite being 16th in payroll.

Answer 3

I see it as a problem for the small market teams.  The minimum will also increase meaning that cheap owners will have to atleast make that.  With the economy the way it is, it is not set in stone that fans will have the disposible income to attend as many games, meaning that attendance revenue will decrease leaving the weak teams bottom lines even weaker.  I am not going to be shocked if some teams fold or relocate in the near future.  

Some of these owners need to stop blocking sales to prospective buyers who have the money to run a successful franchise.

***Smart indeed.  But you are the creative one.

Answer 4

it will mean if this keeps up the small market teams are right back were they started at. The flyers, rangers, redwings,rangers will out spend the rest of the leauge again casuse they can. I think also the pens will never be a dynasty casue the other teams mentioned above will outbid them on there top players. This is great news for me cause as a flyers fan this makes it better for us to get top talent. For small market fans you will be right back were you started and they will have to correct this somehow but in the nba and nfl the cap goes up yearly so this is going to be fact of life.

Answer 5

Depends on how you look at it. Along with the cap, they also introduced revenue sharing. At 64 million, you're only nearing the point some teams were paying before the lockout. Where would these teams be now and what would that have done to the smaller market teams had status quo been maintained?

Salaries are where they are because the new system allows for it. The previous system didn't.

Answer 6

No I think the cap is working.  The cap is a % of revenues and that % has not changed so the owners still have "cost certainity"  as a % anyway.  The problem is that some teams have low revenues and making the minimum is going to be a problem for them.  What is the solution?

The 2 R's

Relocation and Revenue sharing.  

Some teams may have to move and the league can't block every relocation attempt.

The owners have got their concession from the players with the cap tied to revenue, any further teawking is on their side so revenue sharing is the solution.  Nothing drastic that will allow a team to get rich on someone elsees revenues but what I would suggest is a 80/20 split on gate reciepts.  The home team gets 80% and the visiting team gets 20% of the gate from each and every game.  

This provides an incentive for teams to put a good team on the ice so that they can increase their visitor share.  It also provides owners some incentive to allow relocations also as if a team is not working in a certain market their revenue when the visit that market goes down.

A star player will really help out some of these weaker teams too........  Washington had issues for years but in almost every city they visit it will be a sell out because of Ovechkin- now Washington gets to share in that.

By the same token (or am I just toking) weaker teams will get to share in revenues of the strong teams like Tor-Mtl where it is always a sellout.

Answer 7

It is a strange situation. Before the lockout there were three or four teams rolling in the money and paying ridiculous salaries. The lockout was going to fix that. The same four teams are rolling in money but not paying ridiculous salaries. So guess what they're getting even richer. Toronto, Montreal, New York, and Detroit don't have to win to get rich anymore. That reflects differently. Toronto doesn't need the playoff revenue anymore. They can make more money with a Celine Dion concert than they can with a hockey game. so sing on.

The dollar parity was the big thing. With the six Canadian teams making up over 30% of the league revenue there is a skew toward the North.

There was another factor in the post lock out cap. The players just took a 24% paycut as well. This 28% cap increase is just a market correction.

The NHLPA wouldn't accept the cap unless there was a minimum as well. This would keep the carpetbaggers from riding along on the coattails of the rich. The five year grace period for the owners is soon over some of these guys are going to either s**t or get off the pot. Even in a non-traditional hockey area playoff fever increases ticket sales. So it is worth the owners while to field a competetive team. After all 2 rounds of playoffs can equal almost half of a full seasons ticket revenue.

Maybe Toronto getting serious about playing in the post season might be a good thing for the league but a bad thing for the small market teams. Because if your biggest revenue generator generates even more revenue then the Cap will go up faster. making life tougher for the Nashvilles, Columbuses, Phoenixes, and LA's of the league.

Answer 8

I don't think it will go up that much....remember, the first couple years part of the big rise is also because hockey was just getting back after the lockout.

Tell you what, if they raise it teams need to watch out...if the economy continues to be like this, the revenues next season will go down big time, and the cap will go down next summer leaving teams with way too much money done gone and spent.

Answer 9

The pro-rated cap limit that you derived from the historic performance is a very real possibility. For all the criticism that the NHL gets, a number like that could be a way of saying they are becoming more succesful since the lockout.

I can see where a return to the way things were can happen. Just because the limit rises it doesn't mean that teams generate enough revenue to meet it or much less exceed it.

There have been articles that I have read in the papers that state teams like the Flyers, Red Wings, and the Rangers to name a few, have not really been hindered by the cap. Like the 49ers of the NFL during the Eddie DeBartolo days, they have found a way to make the most of the weak points of the agreement.

The problem that I see is one where there begins to be a gap between the "have's" and the "have not's" that leads to another drastic disagreement between the NHLPA and the owners.

I have faith that the NHL has not yet learned from its mistakes. They will do something to further cement their image as a second rate league. There is plenty to criticize the NFL for, but they are aligned to increase their popularity and revenues.

Answer 10

The amount will not increase much more. Why? Because unless the majority of teams start bringing in more money the Cap can't increase.