2019-20 Salary Cap $81.4-85.4m (Oct BOG) UPD: $83m @ Dec BOG; Final: $81.5m

[TheWhiskeyThief]

Given escrow has been 5%+ for many years average salary has actually been closer to the adjusted midpoint then actual midpoint.

I believe you have that backwards.

The escrow gets you closer to average than the adjusted midpoint ever does. The next time escrow refunds the players will be the 1st.

 

[TheWhiskeyThief]

Will be interesting to see the final numbers for the salary cap. The higher the better as it speaks to the overall health of the game to have a high salary cap.

The headline number looks great, but means nothing.

This is why the players are ticked off. Top end players get their fat contracts and signing bonuses, the plumbers of the league have it come out of their salary.

New CBA is gonna be about the civil war between the players rather than a civil war between the owners.

 

[mouser]

I believe you have that backwards.

The escrow gets you closer to average than the adjusted midpoint ever does. The next time escrow refunds the players will be the 1st.

We're obviously not communicating here. This whole exchange started out with your statement that one can use the growth in the league average salary (RFA draft pick compensation) to calculate the growth in the salary cap ceiling.

I responded that while those two figures have a correlation, they're not directly tied together, hence it's not accurate to use the average salary growth to project the salary cap growth.

You then said that "average salary is going to be closer to the actual midpoint than adjusted midpoint" which is possible, but hasn't historically been the case in most seasons. I tried to point out that escrow is not factored into the Average Salary as defined in the CBA and used to determine the growth rate in RFA draft pick compensation. You replied that "escrow gets you closer to average than the adjusted midpoint" while overlooking my point that escrow doesn't change the Average Salary formula.


And while it's not directly related to my points here, for what it's worth the players have received an escrow bonus refund twice since the salary cap was instituted in 2005. So the next time won't be the first either.

 

[TheWhiskeyThief]

And so after escrow, you’re at average salary because that number is based on 50/50 of HRR.

There might be a tweak due to spacing of contracts, but the only big changes in favor of players was new media rights. Usually it goes down due to PA using the inflator.

 

[LadyStanley]

Clarity coming

 

[justafan22]

Clarity coming

Lower escrow too. Not good news

 

[Employee427]

When exactly can we expect final number to be announced?

 

[Marc the Habs Fan]

It's usually 1-2 days before the draft.

 

[LeHab]

When exactly can we expect final number to be announced?

Last season it was a day after BoG meeting. This season BoG meets on June 19. Draft starts on 21st so expect cap on June 20th?

 

[justafan22]

It's usually 1-2 days before the draft.

yikes

 

[LadyStanley]

Going down to wire

 

[LadyStanley]

Not big increase

 

[Fourier]

My guess would be that the NHLPA wants to go with a 0% escalator. That is likely where the $81.5M comes from.

 

[Ted Hoffman]

The fact that it's still not finalized isn't a big deal to me. I think for once, the players want to understand the impact of setting the cap on escrow in the upcoming year - and since both sides have to agree on what inflation factor to use to set the cap, there's reasons for both sides to want something different and so they're trying to find a tolerable middle ground on that.

ADD: I'll say this. I'm pretty sure I remember Fehr being consulted about the inflator around 2007-08 and telling the NHLPA, "take it all, it helps you get every dollar you possibly can." [I know I wrote a pointed critique about having the inflator not be the same as the actual growth rate of league revenues, because a higher factor would cause escrow problems for the players that would take more than a couple years to correct - and it was around then that I also pointed out that the teams regularly overspending the midpoint would aggravate it.] I wonder if he's starting to realize why setting the inflator factor correctly might be kind of important and if he's understanding how teams regularly overspending a midpoint that's roughly set off the percentage of HRR the players are supposed to get might actually be a small problem for the players.

 

[LadyStanley]

But GMs may want to trade a few guys for picks this weekend at draft.

 

[mouser]

My guess would be that the NHLPA wants to go with a 0% escalator. That is likely where the $81.5M comes from.

For what it’s worth there’s nothing barring the NHL and PA from agreeing on a negative escalator. That’s one way to address the underlying issue with the cap formula being set too high.

 

[Fourier]

For what it’s worth there’s nothing barring the NHL and PA from agreeing on a negative escalator. That’s one way to address the underlying issue with the cap formula being set too high.

I am aware of this but I think 0% is probably already pushing it with the FA class. A negative escalator would cause chaos with so many teams near the ceiling. It's weird how powerful optics can be. I could see 0% ok, -.5% and all hell breaks loose internally.

 

[Ted Hoffman]

But GMs may want to trade a few guys for picks this weekend at draft.

Maybe GMs should leave themselves some cap space so they're not wedged against the cap as tight as they possibly can be.

I know, that's crazy talk - who wants to be semi-responsible when you can be a glutton and then blame everyone else for your problems?

 

[Crease]

Can someone explain to a non-math guy why it would be in the players' interest to use max escalator every year? Isn't AAV meaningless if the revenue isn't there?

 

[MNNumbers]

Can someone explain to a non-math guy why it would be in the players' interest to use max escalator every year? Isn't AAV meaningless if the revenue isn't there?

One way to look at the matter is that there is a big pie. I mean a BIG pie. That's the amount which is going to be available in players' salaries next year. The size of this pie is fixed. You can't change it, I can't change it, the owners can't change it, and the players can't change it.

Now, what happens with the escalator is something like this:

No escalator: There might be on average something like 15M per team available to spend on free agents (this is an exaggeration, but it will illustrate the point). All the other salaries are already contracted for.

With escalator: That number jumps to 20M per team available to spend on free agents. Of course, maybe 10% of that 20M is lost to escrow, but that still leaves more available than there would be without the escalator.

So, the escalator doesn't help ALL the players. It helps the free agent class of the year in which it is used. And, of course, it does that at the expense of everyone else.

I hope that helps.

 

[Fourier]

Can someone explain to a non-math guy why it would be in the players' interest to use max escalator every year? Isn't AAV meaningless if the revenue isn't there?

As MNumbers shows the larger the escalator the better it is for the current FA class and in fact the worse it is for everyone else relatively speaking.

The cap for the upcoming year is based on revenues for this year that has just ended. Theoretically, the escalator simply adjusts the cap to take into consideration a reasonable expectation of growth. Historically, 5% has been a fairly decent estimate of year over year growth. So in a perfect world the continued use of the escalator simply helps to ensure that this year's FA crop has a equal playing field to those of the past.

The problem is that the amount the players receive is based on the midpoint of the salary range and not the ceiling. However players will push for as much as possible and most GM's will play ball so the sum of the "nominal salaries" has pushed closer to the top of the scale rather than the midpoint. Once this happens escrow grows. The only easy way for the players to impact escrow is to lower the escalator. In that way the the ceiling grows at a slower rate than it otherwise would based on revenue growth. Unfortunately, this only works so long as you lower the escalator. Whether it is at 5% or 0%, once you are in a position of status quo for a few years escrow will probably go back up unless the gap between the midpoint and the ceiling is reduced in the net CBA.

 

[LadyStanley]

GMs would prefer sooner than later

 

[LadyStanley]

<Insert Jeopardy Theme>

 

[48g90a138pts]

The NHLPA and the league should have got this done before the damn draft. This is the reason there was no movement last night.

Now people are speculating a 80mil cap. Geez that's going to be really tough on some teams.

Just announce it already

 

[Ted Hoffman]

The NHLPA and the league should have got this done before the damn draft. This is the reason there was no movement last night.

Now people are speculating a 80mil cap. Geez that's going to be really tough on some teams.

Just announce it already

Like I said, don't wedge yourself up under an imaginary cap. Leave yourself some room to work with.

I suspect the reason there's no movement is because the NHLPA is discussing internally what to do and everyone wants to understand the implications of various decisions. The league is probably fine with whatever [though it probably has a figure it would like to see], it's up to the players to figure out what they want. That's good, though; they don't want to rush into another decision and spend most of '19-20 wishing they had done something different by thinking it through more carefully.