Blittner’s Blue Line: Attempting to Fix The Salary Cap

By Matt Blittner, The New York Extra/

What are two of the most hated words in hockey? How about, “Salary Cap.”

The NHL’s current Salary Cap is firmly set at $81.5M and is currently remaining flat due to the COVID-19 pandemic. However, since players’ salaries continue to rise, this has created a situation where more and more players are being traded in order to allow their former team to be cap-compliant. 

There are also teams, like the Tampa Bay Lightning, who are using the LTIR liberally in order to “circumvent” the cap to a certain degree. In fact, when Tampa won its second straight Cup a few weeks ago, it was around $18M over the cap due to its ability to use LTIR and not having to be cap-compliant during the playoffs. 

But now, Tampa has lost several key contributors in Barclay Goodrow, Yanni Gourde, Blake Coleman and Tyle Johnson, as it attempts to shoot for a three-peat. In the Hard Cap Era it has become increasingly more difficult for successful teams to remain together for more than a couple years. Chicago, who won three Cups in five-years from 2010-2015, routinely lost key pieces in trades and free agency. The Colorado Avalanche just lost goalie Philipp Grubauer to the Seattle Kraken in free agency because the team didn’t have the cap space to meet his contract demands. 

The Islanders have been in “Cap Hell” for a couple years now and had to trade budding defenseman Devon Toews to Colorado last off-season in order to help the Boys from Long Island remain under the cap. It was a painful move at the time and one the Isles didn’t want to make, but they had no choice. 

These are just a few examples of how the salary cap has negatively affected teams and players across the NHL.

Explanation of Salary Cap

But prior to the 2005-06 season, there was no salary cap. Sure, it had been discussed over the years. However, the NHLPA always rejected the idea. Unfortunately, the 2004-05 season was lost to a lockout largely due to the NHL and NHLPA squabbling over whether or not to implement a salary cap. Eventually, the players capitulated and the hard cap was instated. 

Along with the upper limit of the salary cap, there’s also a cap floor, which is the minimum amount teams can spend on player salaries for the season. And this is where I want to focus on a potential solution to the cap problem.

Before I share my idea, let me say, there are far more intricate aspects to the salary cap than what has been stated in this column, but the basic premise has been outlined for you. Now, let’s dive in.

The salary cap was implemented largely because the NHL wanted to keep player salaries from ballooning out of control the way they have in MLB, the NFL and the NBA. Yes, MLB has a luxury tax, but teams are allowed to go over the limit as long as they pay the penalty. The NBA has a cap but teams can go over as long as the penalties are paid. And the NFL manages to avoid having too much of a cap problem by having non-guaranteed contracts. So, it’s only the NHL that deals with the horror known as Cap Hell.

Another reason for the salary cap was to create parity across the NHL. The League wants all its teams to be competitive and is afraid that teams with wealthier owners, or who play in bigger markets, will be able to lure away the best players if they were able to fully utilize their deep pockets. 

In that nightmare scenario, the rich teams will hoard all the talent and only a few teams each year will have a legitimate chance to win the Stanley Cup. Meanwhile, the poorer teams will wallow in obscurity, struggling to make ends meet and eventually ceasing to exist. 

I should point out that having deep pockets does not guarantee success. For seven straight years prior to the implementation of the salary cap, the Rangers, with the deep pockets of Madison Square Garden, were unable to make the playoffs; even though the team routinely dolled out big money deals.

A Possible Solution

However, what if the following action was taken?

Instead of having a cap ceiling and cap floor, what if there was only a cap floor? And what if it was raised to a fairly significant level?

Well, that would get rid of the constant need to shed players because they’re due a raise or because they make too much. That would then allow teams to remain together longer and potentially allow for more extended runs of excellence from championship caliber clubs.

On the other side of the aisle, teams who can’t compete dollar-for-dollar with the richest clubs, they’d still be able to compete at a good level because they wouldn’t be allowed to spend less than the salary floor. So they’d still remain competitive. 

For those of you worried about the rich teams just dusting the field with their checkbooks, here’s the provision I would recommend to prevent that from happening without needing to put a cap on the upper limit a team can spend. 

One, yearly player salaries cannot exceed 20% of the salary floor. So, if the floor were set at say $80M (which is $1.5M under the current salary ceiling), then the maximum yearly player salary would be $16M. That’s not unreasonable given that Connor McDavid currently is the league’s highest paid player with a cap hit of $12.5M. 

Two, to prevent Owners from just handing out maximum contracts to every single player, no team would be allowed to have more than three maximum contracts on its books at any given time. And any team using all three maximum contract slots would not be allowed to sign any other player to a deal worth more than 12% of the salary floor; in this situation, that would be $9.6M. 

In today’s salary cap world, only 45 players are currently signed to deals that will carry as much as an $8M cap hit per season. That means there would be plenty of room for player salaries to improve in my hypothetical scenario; without getting out of control. 

Currently, there are 19 teams, of the 32 in the NHL, who are projected to spend at least $70M in salaries for the 2021-22 season. And with plenty of time left in the off-season, that number will surely rise to somewhere around 24 or 25 teams. So, it’s not like an $80M salary floor would be untenable for a majority of teams in the league. 

Now, let’s recap.

My proposal is to do away with the salary cap ceiling. Raise the floor to an adequate amount (example would be $80M.) Yearly player salaries cannot exceed 20% of the salary floor and each team is limited to having three max players at any given time. And should a team have three max salaries, it then cannot sign any other player to any deal worth more than 12% of the salary floor. 

This way, teams don’t have to constantly shed star or up-and-coming players and the poorer teams will still remain competitive as they won’t be left in the dust by those with deeper pockets. 

Obviously, there are things that would have to be accounted for, like Hockey Related Revenue and other nuances that most average fans don’t fully comprehend. But this is a simple idea that could work. And it would be tweaked as necessary to accommodate those other factors. That’s just me throwing on a GM’s hat. What do you all think? 

The NHL’s Latest Scandal

In other NHL news… 

The League and Players Association are investigating Evander Kane after his estranged wife’s social media post accused him of gambling on his own games. It’s not the first time Kane has been rumored to have a gambling problem, but it is the first time he’s been rumored to have bet on his own games; even throwing his own games according to his wife’s post. 

If any bit of her allegation is true, the league needs to blackball him immediately and also re-think its current stance on gambling. For many years it seemed the NHL would never get on board with legalized sports gambling. But that all changed a couple years ago when the NHL and MGM struck a deal. It was hailed as a landmark deal and the league has since thrust itself headfirst into the world of sports gambling. 

When the MGM deal was first announced, I attended the press conference and rather pointedly asked Commissioner Bettman and the MGM representative about the possible negative ramifications of such a deal. I did not receive a straight answer. I sincerely hope the allegations against Kane prove to be false, because if they don’t, it’s going to open a can of worms the league will have trouble closing and getting out from under. 

New Book Released

On a completely unrelated note, I’d like to announce that my newest book, “Voices of The NHL: A Collection of Bios & Stories from Broadcasters across the National Hockey League” is now available on amazon. The book goes in-depth with broadcasters from all 31 active teams who participated in the 2020-21 season, as well as from NBC, NHL Network and SportsNet, to bring fans the stories of how they each got to where they are today and to shine a light on little known aspects of their careers. So, if you’re a fan of hockey or an aspiring broadcaster, I highly recommend you check it out and thank you!

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