Don’t the players pay back their escrow by the end of next year? Or is it the year after?
I know when that happens, the cap is supposed to jump up a ton.
The most recent projection is that it will get paid off by the end of the 2023/24 season.
With that said, it is uncertain how much the cap will immediately "explode." Assuming the escrow debt is paid in full by the end of the 2023/24 season, this is the maximum year-by-year growth of the cap over the life of this CBA (unless HRR is high enough that players would be projected to take home less than 50% of the HRR in years after the escrow debt is paid off):
2022/23: $82.5M
2023/24: $83.5M
2024/25: $87.675
2025/26: $92.058
Now, what gets really interesting is if HRR has grown so much that an $87.675 salary cap would see the players projected to earn less than 50% of the year's HRR in 2024/25. If that occurs, then the NHL and PA can negotiate a further increase in the salary cap (both for 2023/24 and/or 2024/25. Note that this is
allowed by the CBA and not
required. The maximum year-by-year cap increase in this scenario is 10% (instead of the 5% increase as outlined in the figures above).
The more I look at the MOU, the more impressed I am by it. Getting a $1B+ escrow debt paid off a couple years before the expiration of a 4 year extension is an accomplishment, especially since it didn't require skipped paychecks or completely obscene escrow. The cap should be pretty much back on track at the expiration of this CBA and if the parties can act like adults (an admittedly big "if") then this CBA could completely eliminate escrow as a contentious issue. In the final 2 years of this CBA, the PA is going to have an opportunity to see the cap jump by about $9M+ (over 2 seasons)
with escrow sitting at 0%. We could enter the next round of CBA negotiations looking at a projected salary cap of $95M+ that would see no/little escrow going from the players to the league.
Now, I'm fully confident that the two sides will find something to go to war over, but both sides should be pretty damn happy with the state of the league in 2025 and 2026. There shouldn't be much desire from either side to shut down the league again. For an extension that was done under major duress (a global pandemic and potential to not award a Cup without getting a quick deal done), the cap formula they came up with is pretty damn impressive.
As for how this all impacts the Blues: Army needs to be lobbying Bettman (and our owners)
extremely hard to get the NHL to come to the table with the PA to talk about increasing the 2023/24 cap by more than $1M. The MOU allows the parties to increase the cap by more than $1M before the escrow debt is paid "...in order to allow for a smoother transition into the ‘Lag’ formula (the formula that calculates the cap increase once the debt is paid)." Army should be aggressively pushing the narrative that increasing the cap by $2-3M more in 2023/24 will help smooth the transition into 2024/25, prevent a shortfall where the players are earning less than 50% once the debt is paid and keep both sides content heading into the next round of CBA negotiations.
Every penny is going to count to get compliant in 2023/24 and we are better off starting a slower cap increase that season than a bigger jump starting in 2024/25. Army should be using his clout to convince any GM/governor/owner who will listen that smoothing this cap jump is in everyone's interest.