Next year's salary cap

[Mess]

To get back to 70 mil in 2014-15 the league would have to see 14% growth since the 2011-11 season. With the amount of outdoor games I don't see this being hard at all. Look at how much the league grew every season after the 04-05 lockout.

The cap of old CBA use to go up by $5 mil on average a year based on HRR growth.

Due to the lockout and reduction in PA % the NHL reduce the cap from $70.4 mil $64.3 mil (~- $6 mil).

The league is going to have to see exceptional % HRR like never before, to compensate for the new 50% partnership share and return to previous levels.

This makes speculating on new future caps more difficult.

 

[King Mapes]

The cap of old CBA use to go up by $5 mil on average a year based on HRR growth.

Due to the lockout and reduction in PA % the NHL reduce the cap from $70.4 mil $64.3 mil (~- $6 mil).

The league is going to have to see exceptional % HRR like never before, to compensate for the new 50% partnership share and return to previous levels.

This makes speculating on new future caps more difficult.

It's also worth pointing out a needless lockout just happened and some fans might not be back. The lockout could still effect some of the numbers.

 

[Mess]

It's also worth pointing out a needless lockout just happened and some fans might not be back. The lockout could still effect some of the numbers.

No question, when you only play a 48 game season as opposed to an 82 game one, there will be a residual loss of HHR revenue, damage caused by the lockout.

In previous sports (not just hockey) lockouts\strikes have had adverse effects on the industry including slower recovery coming out of them.

It would be quite an anomaly to have record setting HRR growth to return to previous lockout levels for the cap ceiling immediately in year 1, and then you have to adjust & compensate for the new market share % drop also.

 

[WestCoastLeafs]

It was $72M two seasons ago.... they are having a massive amount of outdoor games....

It will be $72M again. At least.

I think it was $70M, but regardless, that was with a 58% player share. Now it's only 50%. Game does seem to be taking off in the States though...

 

[WestCoastLeafs]

It's hard to tell what revenues will be like in a full season. I think a lot of people were very hungry for hockey by the time the lockout ended, so the pro-rated revenues were high. But it remains to be seen if they will stay that high once the grind of the normal 6-month regular season is back, and interest starts to wane, especially in markets where the team is out of the playoff race.

I think the biggest positive factor for the NHL is that hockey seems to be taking off in the States. Might have something to do with HD television - the days of FoxTrax are over, Americans can actually see the puck now (gasp)!

 

[cujoflutie]

It's also worth pointing out a needless lockout just happened and some fans might not be back. The lockout could still effect some of the numbers.

You're definitely not wrong; plenty of hardcore fans became casual fans and casual fans became non-fans.

But given that the lockout which wiped an entire season was recovered from, I'm not sure this one will punish the league as much as it deserves.

 

[WestCoastLeafs]

Leafs currently only have 9 players under contract for next season and $31.5 mil (near 1/2 of current) committed for next year.

Those 9 players are Lupul, Clarkson, JVR, Bozak, Orr, McLaren, Liles, Holzer and Bernier.

So lots of players needing new deals including important big money ones like Kessel, Phaneuf etc to complete a 23 man roster.

Going to need all the cap increase they can get.

The biggest raise could go to Gardiner. He's still sitting on a one-and-change ELC, and if he has a big season, he'll be looking for a bigger increase than the $2-$3M raise Kessel will get.

 

[satyr9]

The cap of old CBA use to go up by $5 mil on average a year based on HRR growth.

Due to the lockout and reduction in PA % the NHL reduce the cap from $70.4 mil $64.3 mil (~- $6 mil).

The league is going to have to see exceptional % HRR like never before, to compensate for the new 50% partnership share and return to previous levels.

This makes speculating on new future caps more difficult.

I agree it's very hard to speculate and get close to numbers, but I don't think the growth needs to be exceptional to see a large increase in cap for 13/14.

A 5m increase on 65m is more than a 7.5% jump in revenues. Forget 57% vs. 50% for a second, if the NHL was consistently growing by that much the next HRR determined cap is gonna be quite high. The 11/12 season had a 70.2m cap based on 57% of HRR. If we go conservative on the growth at half that (let's do 4% 'cause it's easier), then the cap for 12/13 would've been 73 for the lockout season, 76m for this season, and 79m for the 13/14 season (I rounded off a lot). Those are far less than the 5m increases you referenced, and we're still talking under the old system. If that 79m is re-adjusted to the current split of HRR (just divide by 57 and multiply by 50) and you're up to about 69.3m. If you did it with 7.5% increases (the 5m guesstimate) and readjusted for the new split, it'd be 76.5m.

The lockout and this year's arbitrarily defined numbers cloud the issue, but if the league grew during these years, then even with the new split, 3 years of growth against the 57/50 decrease could more than balance out.

That being said, did they change how HRR is calculated? Did they alter what is included in HRR(part and parcel of the first, but a little different)? Did they alter how the floor and cap are calculated in relation to HRR? How did the lockout affect growth for the league?

If during the lockout, the shortened season, and the upcoming one the league grew even half as much as it did perennially between the last lockouts, then a 70+ cap for 13/14 is not at all hard to fathom.

My math was back of a bar napkin bad I know, but there's no point getting detailed when it's this sketchy.

 

[Deebo]

But there's so many other factors as well. Tickets, merchandise and the outdoor games could play alot into the numbers.

The year over year changes to walk up ticket sales would have a minimal impact on total league revenue. I'm sure they know what kind of revenues the outdoor games will generate. It might be difficult for us to guess what the cap will be but I am certain the league and in turn the GMs know within a range what the cap will be and for sure the have a minimum figure and have plans for their rosters based on cap figures that fall within the range. The NHL is a multi billion dollar operation, they aren't running it in the dark.

I work in revenue forecasting for a large company with more yearly revenue than most NHL team. Finance professionals are capable of accurately projecting revenue well in advance. My team usually is accurate within 3-5% of our projections and I'm in an industry with more revenue uncertainty than the NHL.

 

[Deebo]

I agree it's very hard to speculate and get close to numbers, but I don't think the growth needs to be exceptional to see a large increase in cap for 13/14.

A 5m increase on 65m is more than a 7.5% jump in revenues. Forget 57% vs. 50% for a second, if the NHL was consistently growing by that much the next HRR determined cap is gonna be quite high. The 11/12 season had a 70.2m cap based on 57% of HRR. If we go conservative on the growth at half that (let's do 4% 'cause it's easier), then the cap for 12/13 would've been 73 for the lockout season, 76m for this season, and 79m for the 13/14 season (I rounded off a lot). Those are far less than the 5m increases you referenced, and we're still talking under the old system. If that 79m is re-adjusted to the current split of HRR (just divide by 57 and multiply by 50) and you're up to about 69.3m. If you did it with 7.5% increases (the 5m guesstimate) and readjusted for the new split, it'd be 76.5m.

The lockout and this year's arbitrarily defined numbers cloud the issue, but if the league grew during these years, then even with the new split, 3 years of growth against the 57/50 decrease could more than balance out.

That being said, did they change how HRR is calculated? Did they alter what is included in HRR(part and parcel of the first, but a little different)? Did they alter how the floor and cap are calculated in relation to HRR? How did the lockout affect growth for the league?

If during the lockout, the shortened season, and the upcoming one the league grew even half as much as it did perennially between the last lockouts, then a 70+ cap for 13/14 is not at all hard to fathom.

My math was back of a bar napkin bad I know, but there's no point getting detailed when it's this sketchy.

Yes, it's hard for us to calculate where the cap will go, but we're not working with the information that NHL has access to.

 

[King Mapes]

You're definitely not wrong; plenty of hardcore fans became casual fans and casual fans became non-fans.

But given that the lockout which wiped an entire season was recovered from, I'm not sure this one will punish the league as much as it deserves.

Personally I went from a hardcore fan to a casual fan.

I was a little surprised at some ratings this year but I still find it hard to believe this kind of spike in numbers can happen right after a needless lockout.