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Lightning Round: The stark reality of the NHL’s salary cap position

Posted on by Hardev

Since the players salary cap was initiated in 2005, the players have been able raise the salary cap to a percentage above what the league has determined to be a reasonable number that matches the 50/50 split. This all happens before the season begins, meaning the players are essentially banking on revenue growth that can allow them to keep as much money as they made under an elevated salary cap.

The players pay into escrow throughout the season, taking the percentage they agreed to out of their pay cheques as they go. The hope is they will be given back as much of it as possible once the cake is measured and cut in half.

Last season, the players added 12.9% to the salary cap, pushing it up to $81.5 million. Now that the revenue numbers have been crunched by the league, it came out today that the players will only get back 3% of what they pooled into escrow.

To put some numbers to this (in the most back-of-the-napkin way), Steven Stamkos made $9.5 million in salary in 2018-19. I’m mashing salary and signing bonuses together here for the simplicity of the math and also because I don’t know if signing bonuses are a part of this — though I strongly assume it has to be since it’s money against the cap. By the end of the season, Stamkos had been paid $8.415 million by the Lightning, with the other million and change going into escrow (the 12.9%). Today, Stamkos is going to get back about $317k as a result of the escrow payback.

The logical question here would be why do the players put the number so high? A lower number would reduce the amount of money taken out of their in-season pay cheques. The simple answer is that it inflates the cap and allows teams to spend more to make the teams better and free agents get a bigger pay-day. They just have to pay it off on the back end.

On the league side, it’s a little worrying when the supposed “healthy growth” of the league — that is explained my gesturing to the salary cap growth — is mostly an illusion. And now with the season suspended and revenues bound to plummet, the salary cap is going to free-fall until the players choose to bail it out for all their sakes. Ironic considering how the league was pumping up the tires on a supposedly possible $88 million cap, an increase of $6.5 million from this season. It was never getting there, even with a clean season, if history is to be believed.

Speaking of this season, the players enacted a 14% escalator before the cap number was announced, an even bigger percentage than even the year before. Now with revenues set to plummet, it appears the players won’t get any of this money back, and could possibly have to add more into it in order to balance the salary cap back to 50/50.

Katya at our sister site PPP tells the story of the 2018-19 escrow number in a more complete way. Her article is absolutely worth the read. She even included receipts from 2018.

“No pressure, Gary, you just need to do a better job of setting the revenue projection and actually growing the NHL to achieve it than you’ve ever done before. Earn that spot in the Hall.”

Oops: Gary Bettman and the NHL guessed really wrong on last season’s revenue

While Deputy Commissioner Bill Daly gave a socially distanced press conference on these topics, he was also asked about the resumption of the NHL season. He said the league is working off two-week “chunks” where they incrementally update if/when they can restart the season. Basically, they’re in a holding pattern as they get information from health officials. Once the self-quarantine is lifted, you can bet the players will be back on the ice for a second training camp of sorts until they’re given the go-ahead to schedule games.

However, the harsh reality of the situation doesn’t see an end coming anytime soon. Yesterday, the City of Toronto announced that it has cancelled all city events and public event permits until June 30th. While this cancellation includes Pride and the local Jazz Festival, it does not include NHL games in the city. That said, it’s a stark indicator of what we can expect in terms of when large gatherings will be allowed once again.

“Festivals and events are treasured moments in neighbourhoods across the city. But the sooner we heed the advice of our medical experts … the sooner we get back to the things we enjoy and love,” [Mayor John Tory] added.

Toronto cancels all city events and permits until June 30 citing COVID-19 outbreak | CBC News

None of that has seemed to stop Lauren, who posted her third installment of the 21 Days of 20221 NHL Draft Prospects. Yesterday was a baby-faced QMJHL kid from Slovakia, Oleksii Mylukha.

“The first time a lot of fans were exposed to Myklukha was during the 2019 Hlinka-Gretzky Cup, where he picked up two goals and two assists in four games. Although Slovakia finished second-last amongst eight countries, Myklukha shone for the team with and without the puck. His two-way game looked much improved and he was flying for the Slovaks.”

21 Days of 2021 NHL Draft Prospects: #19 — Oleksii Myklukha

The NHLPA announced the results of their player poll, which asks players about the best and worst aspects of their coworkers. Victor Hedman once again won “best defenseman”, his second win in a row.

We put a lot of stock in what players think, they’re the ones who play the game after all. That said, either they punt every year on what constitutes a good goalie, or they all need glasses and a math lesson. Carey Price hasn’t been good for three years, guys. Even his save percentage this year was only .909.

For those starved for hockey highlights, the official Bolts Gaming account is running the rest of the season and putting the highlights up on Twitter for everyone to follow live. Definitely worth checking out!

HAPPY BIRTHDAY, BOLT!!!!!

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