News: Possible 86.5 M salary cap in 2023-24 if escrow balance paid off this season

[mouser]

Finally for once the rich guys are getting a break.

How about instead they lower the salary cap and lower ticket prices.

I had a similar thought eating breakfast at IHOP this weekend. Why can’t they just cut the price of my bacon temptation omelette by 25% and pay their employees less?

 

[mouser]

Can somebody patiently explain me why it is not a precisely known mathematical calculation which outcome is going to happen? Are the salaries not all known and tabulated? Is there a reason why such a Byzantine salary system was designed other than to completely mystify the people they get all their money from?

A) All the individual player salaries are known. What’s not known today is the total collective spending on all players at the end of the season as teams can move players back and forth from the AHL/NHL and player performance bonuses can have an impact. Teams can also pump more money into the player side of the 50/50 share using LTIR.

And more importantly:

B) The NHL doesn’t know exactly how much collective revenue (HRR) they will end up with this season. Like any business they’re making projections of future revenue that may turn out to be higher or lower than projections.


In summary: there is a precise mathematical formula that determines the outcome. The final inputs to that formula have margins of error that will Improve as the season progresses but won’t be fully known until the season ends.

 

[AcerComputer]

Can somebody patiently explain me why it is not a precisely known mathematical calculation which outcome is going to happen? Are the salaries not all known and tabulated? Is there a reason why such a Byzantine salary system was designed other than to completely mystify the people they get all their money from?

A) All the individual player salaries are known. What’s not known today is the total collective spending on all players at the end of the season as teams can move players back and forth from the AHL/NHL and player performance bonuses can have an impact. Teams can also pump more money into the player side of the 50/50 share using LTIR.

And more importantly:

B) The NHL doesn’t know exactly how much collective revenue (HRR) they will end up with this season. Like any business they’re making projections of future revenue that may turn out to be higher or lower than projections.


In summary: there is a precise mathematical formula that determines the outcome. The final inputs to that formula have margins of error that will Improve as the season progresses but won’t be fully known until the season ends.

The short answer is that it has to do with Escrow payments, because of all the money they lost during covid.

NHL.com article explains this, but the key quote is here:

If the escrow debt is not repaid by the end of this season, the salary cap would rise $1 million next season and instead increase significantly for the 2024-25 season, when the debt would be fully paid off.

NHL salary cap could increase by at least $4 million in 2023-24

 

[Freudian]

Big if true.

 

[nbwingsfan]

Yes. At the same time middle of the road players will like see a decent raise too

2016 off season all over again. What a treat that was for so many teams when the cap went up:

Lucic
Okoposo
Nielsen
Eriksson
Ladd
Brower
Backes
Boedker
Riemer
Staal

All such average players getting big contracts and performing so poorly

 

[Man Bear Pig]

Raising the cap sounds great in theory, but ultimately it'll just mean the top players make more money while taking up a similar percentage of the cap. I wish it made it so that teams had more wiggle room, but that's not the reality.

 

[saska sault]

Hard not to be excited as a Wings fan, Yzerman has some crazy cap flexibility in the next few years while our core is young.

 

[Seanaconda]

Can somebody patiently explain me why it is not a precisely known mathematical calculation which outcome is going to happen? Are the salaries not all known and tabulated? Is there a reason why such a Byzantine salary system was designed other than to completely mystify the people they get all their money from?

They don't know what the arena revenue will be yet , how many sellouts, if there will be more covid restrictions , revenue off of food and drink sales if that's shared

 

[mouser]

Raising the cap sounds great in theory, but ultimately it'll just mean the top players make more money while taking up a similar percentage of the cap. I wish it made it so that teams had more wiggle room, but that's not the reality.

Teams make their own choices in how much wiggle room they have or don't under the cap.

It's not the cap's fault some teams choose to max out their cap space on a active roster of less than 23 players.

 

[Reality Czech]

It's a $3 mil per team increase over what teams were probably projecting. Is that really earth shattering?

So if something isn't "earth shattering" then we shouldn't discuss it? This could be the difference between the Blues keeping or losing O'Reilly for example, so it's potentially a big deal for some teams.

 

[Voight]

So GM's will overpay even more?

Darnell Nurse about to rip up his contract

 

[My3Sons]

So if something isn't "earth shattering" then we shouldn't discuss it? This could be the difference between the Blues keeping or losing O'Reilly for example, so it's potentially a big deal for some teams.

When did I say it shouldn’t be discussed?

 

[Habs Halifax]

Raising the cap sounds great in theory, but ultimately it'll just mean the top players make more money while taking up a similar percentage of the cap. I wish it made it so that teams had more wiggle room, but that's not the reality.

You're overlooking timing of contracts. Think about Tampa vs Toronto. Their entire top end core is locked up for years and extra cap growth means they can be players in UFA or in trades. They could add anybody with term/AAV.

Leafs got your 3 young guns and the pajama boy expiring in 2/3 years. You could use the extra room in the short term and maybe you pick up a impact guy with 2/3 years of term left.

Only impact guy the Leafs have signed past 3 seasons is Rielly at this point. So yeah, extra cap space will be consumed with new market prices for the Leafs in the next few years.

 

[GAGLine]

It's a $3 mil per team increase over what teams were probably projecting. Is that really earth shattering?

3 mil can make a huge difference for many teams. The Rangers, for example. They've got 5 young players to re-sign next summer, including Laf, Miller and Chytil. That extra 3 mil can be the difference between giving Laf or Miller a 2 year bridge deal or a long term extension.

We've bandied the idea of buying out Goodrow next summer, since it would give us a cap credit for 2023-24 and 2024-25 (due to the way the contract is structured). So we would save roughly 3.84 mil next summer if we buy him out, minus the cost of his replacement. With an extra 3 mil, maybe we don't need to buy him out.

Collectively, it's an extra 96 mil that can be spent on players. With everyone having more cap space, it will enable teams to move salary more easily. There are teams that have already played with 17 skaters due to injuries and cap constraints. Another year with only a 1 mil increase will turn the screws that much tighter. A 4 mil increase will enable teams to have some breathing room to account for injuries. Maybe we'll even seen LTIR used less.

 

[Negan4Coach]

A) All the individual player salaries are known. What’s not known today is the total collective spending on all players at the end of the season as teams can move players back and forth from the AHL/NHL and player performance bonuses can have an impact. Teams can also pump more money into the player side of the 50/50 share using LTIR.

And more importantly:

B) The NHL doesn’t know exactly how much collective revenue (HRR) they will end up with this season. Like any business they’re making projections of future revenue that may turn out to be higher or lower than projections.


In summary: there is a precise mathematical formula that determines the outcome. The final inputs to that formula have margins of error that will Improve as the season progresses but won’t be fully known until the season ends.

Thanks for breaking that down for me.

 

[beowulf]

So GM's will overpay even more?

Sounds like it...the way things are now is a mess and not sure how sustainable it will be long term.

 

[UglyPuckling]

This would certainly be big for Ottawa and their ability to retain DeBrincat and Zub. It also makes me budge on my "team-friendly" deal number if so.

Re: bolded. True enough.

They are going to have to sign another goalie (or extend Talbot), and there's Pinto's contract to deal with as well.

I think it still behooves Dorion to not overpay on a defender and/or lose too many assets & futures. Sanderson's contract is coming up in 2024-25 as well. Plugging in those low cost ELCs that can still play well at the NHL level will be very helpful for the success of the team in the future.

A lot of Sens fans were giving up on Brannstrom as an example, but he is showing us this year that being patient & waiting pays dividends. I think the same phenomena could be at work with JBD & Thomson.

 

[UglyPuckling]

Half the league is at or 500k from the cap limit, league needs a luxury tax or purging some shitty owners/teams in the lower rungs.

Incentivized losing while at the same time giving money to shitty teams/owners clearly isn't working

Either that, or better GMs. Still way more teams that have to avoid spending too much versus rich teams that don't have to worry. Your idea just rewards bad performance by GMs.

Teams make their own choices in how much wiggle room they have or don't under the cap.

It's not the cap's fault some teams choose to max out their cap space on a active roster of less than 23 players.

Reminds me of an old expression: A bad carpenter always blames his tools. LOL.

 

[UglyPuckling]

Yes, because most teams have no cap space.

In the case of your team, who's fault is that? Did someone put a gun to KD's head that forced him to spend $11 m on Tavares for example?

 

[SupremeTeam16]

Finally for once the rich guys are getting a break.

How about instead they lower the salary cap and lower ticket prices.

Wow this is a really insensitive thing to say.

Do you have any idea how much a second home in Muskoka or the Okanagan cost?

 

[GAGLine]

In the case of your team, who's fault is that? Did someone put a gun to KD's head that forced him to spend $11 m on Tavares for example?

That's fair to say, but no one planned on Covid and the cap staying flat for several years.

 

[AcerComputer]

In the case of your team, who's fault is that? Did someone put a gun to KD's head that forced him to spend $11 m on Tavares for example?

Is it better if the cap goes down by $4m instead of up?

 

[UglyPuckling]

That's fair to say, but no one planned on Covid and the cap staying flat for several years.

Being financially prudent is always wise. You don't buy car insurance after you had an accident.

Trends can reverse and there's been many examples over the years. Not that long ago, the Canadian dollar equalled 65 cents U.S.

KD rolled the dice with some of the moves he made. It backfired.

Is it better if the cap goes down by $4m instead of up?

Odd question.

Not a big surprise that you didn't answer my question either.

 

[GAGLine]

Being financially prudent is always wise. You don't buy car insurance after you had an accident.

Trends can reverse and there's been many examples over the years. Not that long ago, the Canadian dollar equalled 65 cents U.S.

KD rolled the dice with some of the moves he made. It backfired.

Not a good analogy. GMs are trying to win. Saving cap space just in-case something bad happens and the cap doesn't go up as expected hurts their chances to win. Maybe they can take solace in the good cap situation they left for the next GM.

I'm not defending the JT signing. I thought it was dumb they day they did it. They were already a good offensive team. Adding another offensive player at 11 mil made no sense. But that doesn't change the fact that Dubas has had less space to work with due to Covid.

 

[ManofSteel55]

It's a $3 mil per team increase over what teams were probably projecting. Is that really earth shattering?

Considering we've been on next to no increase for a few years now, yep, it's a pretty big deal. Especially when you consider what might happen in future years when there is no escrow to repay at all.