How does the NHL's Salary Cap work? Hard or soft?

Discussion in 'Fugu's Business of Hockey Forum' started by ChompChomp, Feb 26, 2007.

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  1. ChompChomp

    ChompChomp My avi is gospel

    Jan 8, 2007
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    Dallas, TX (Ugh)
    With this being trade time, a lot of talk about whether or not deals work in terms of the cap comes up.

    How does the NHL Salary Cap work? Is it a hard cap, or can you go over it and just pay fines, like the NBA'a Luxury Tax for going over the cap.

  2. kdb209

    kdb209 Registered User

    Jan 26, 2005
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    It's a hard cap with two exceptions:

    1. The Bona Fide Long Term Injury/Illness Exception - A team with a player on longterm IR (10 games/24 days min) may exceed the cap by up to the injured players salary for replacements, but once the injured player returns the team must get back below the cap again before activating the player.

    2. The Performance Bonus Cushion - A team may exceed the Upper Limit by up to 7.5% due to performance bonuses. All performance bonuses, earned or not, count against the cap. If a bonus becomes impossible to achieve, then the team gets a cap credit back for the remainder of that season. At the end of the year, if the actual bonuses earned cause the team to exceed the Upper Limit, that excess is applied against the following seasons cap.

    Note, that unlike the NFL or NBA cap, the NHL cap is not based on just a total of the annual salaries of the players - it is calculated daily based on actual salary paid (actually based on the averaged value of salary + bonuses over the life of the contract then prorated per day based on a 187 day regular season). A $4M player aquired for the last ~20 games of the season has an effective cap hit of only ~$1M - his old team is still on the hook for the $3M already paid.
  3. GSC2k2*

    GSC2k2* Guest

    There is a CBA FAQ stickied above that can answer a lot of your questions.

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