How to get rid of the salary cap, while keeping it? [long read]

[Canuckie8]

Hi everyone, I have been an avid viewer of these boards for over 15 years.  I have never posted or even commented before but thought I would take a stab at sharing an idea that I have been thinking on for quite some time.  I have always loved hockey, but as I have aged, I have gained more and more interest in the business side of the sport.  Please excuse the length of this post but that is what you get after 15 years of silence. 

 

Who thinks the salary cap’s main purpose is to create a competitive league where all teams have an equal playing field?  I do not. 

 

Who loves all the salary cap acrobatics teams must perform to fit within the salary cap confines throughout the season?  I do not.

 

Who thinks anyone other than many NHL owners and Gary Bettman, love the salary cap?  I do not.    

 

The owners gave up a whole season for the salary cap and it seems it is here to stay.  The main purpose of the cap is to ensure players will not earn more than 50% of all hockey related revenue.  The CBA accomplishes this root goal very well.  There are, however, a ton of rules within the CBA that supposedly address the desires to create balance and parity, such as: cap ceiling, cap floor, tagging rules, etc., but the CBA, as written, doesn’t seem to accomplish this as well. 

 

The consistently competitive teams, the teams with deeper pockets and teams with aggressive/crazy owners will almost always perform cap acrobatics to manipulate the system in their favor.  These teams, while technically under the cap ceiling, have payrolls far greater than the cap ceiling. This is how Tampa wins the cup with 18 million in salary over the cap.  These types of teams are not a true reflection of their cap hit and there are several examples each year.   

 

On the flip side, the budget/small market teams, the cheap owner teams, the forever inept teams will almost always perform cap acrobatics to manipulate the system in their favor.  These teams, while technically over the cap floor, have payroll to players that is far lowerr.  This is how a team like Arizona takes on players that are on LTIR but insured, or players like a Loui Player Name with a 6 million cap hit but actual salary much lower.  These types of teams are not a true reflection of their cap hit and there are several examples each year.   

 

There is also, as I understand it, an underutilized advantage within the current salary cap structure, where teams can bank cap space.  If, for example, a team had $5MM in space throughout the season they could take on a significantly higher amount in salaried players nearer to the deadline.  This rarely happens as most teams ride the upper limit all year and most GM’s seem to be way too conservative to really go for it some years but theoretically it could happen.   

 

I bring these things up to highlight that league is quite content to let teams spend amounts outside of the cap ceiling and floor ranges.  With what Tampa Bay and Las Vegas have done in recent years and what Arizona seems to have always done, there seems to be no limit to what the league would find acceptable, its all just semantics.  What are they trying to accomplish if they let all this slide?  It highlights that the NHL is just shuffling the money around within the cap system, so the rich teams pay more, and the poorer team do not…  And I am fine with it.

 

Who wants an NHL where if a team wanted to make a trade to improve their team, now or down the road, the GM wasn’t as severely handcuffed by salary cap constraints?  I do. 

 

Who wants an NHL where the trade deadline was possibly way more exciting?  I do. 

 

Who want an NHL where we hear about the salary cap way less often throughout the season?  I do. 

 

We currently live in an NHL where there is no salary cap in the playoffs.  Why then, can’t we just do this earlier?  Why not eliminate the salary cap before the season even starts?  Wait, didn’t I just say the salary cap was here to stay?  Yes, I did, and it still would be.  It is all just semantics at this point.  The league will still get their split.  I am just moving the goal posts of acceptability but not quite tearing them down. 

 

The rest of the post is just ideas around how to accomplish this.  Whatever world works to get to where the NHL doesn’t have a cap for the season and playoffs is my goal. 

 

Remember owners get 50% and players get 50%, none of these changes are intended to result in more cost to the league overall or a reduction to any player salaries.  If any scenario caused more money to be paid or calculated, it would be offset by the already established escrow system and the salary cap ceiling calculations each year.  Ultimately, GM’s, players & agents will learn how best to compete within any system.  If any of the rules look like they can be abused and a team takes advantage of it in a way that I feel goes against the spirit of my initial intent, then I would anticipate the NHL to close the loophole while arbitrarily punishing some of those teams’ years after the fact. 

 

1.      When the NHL sets the salary cap each year (floor and ceiling), they will also provide a projection salary cap ceiling for the subsequent season.  This projection will be used as the baseline for the tagging rule I mention below.  We will call it the tagging cap.

 

2.      The day before the first day of the NHL season, teams must submit their 23-man opening day roster that falls within the salary cap floor and ceiling range.  We will call this the team locked in cap.  This 23-man roster calculation will follow whatever calculations go into doing this today.

 

3.      The difference between the team locked in cap and the salary ceiling will be called the team salary bank

 

4.      The team salary bank can be used to sign players, after the season starts, to a contract that is greater than the league minimum.  It can also be used to apply any bonuses earned during the season. 

 

5.      Players signing after the season begins, cannot have bonuses included in their contract, within the first season, unless there is enough money in the team salary bank to cover the totality of the possible bonuses.

 

6.      Burying a salary currently allows for league minimum salary + $375,000.00 in cap relief.  I propose reducing this to league minimum salary cap relief moving forward.  In my new world burying a contract has less concern anyway.  The league minimum contracts can be signed throughout the season without concern for the cap as they effectively are in the current world.

 

7.      Keep the current rule that no team can be below the cap floor during the season.

 

8.      Players signed after the season starts cannot be traded within the same season.

 

9.      All players that are on LTIR cannot be traded. 

 

10.   Teams with players on LTIR, that are expected to miss the entire season, may choose to have that salary count within their team locked in cap or not.  This helps teams that might have tighter budgets and cannot spend as much as others, but it loses the stigma of manipulating the system by trading for injured players to just reach the floor.  A player like Michael Ferland is a good example here.  His contract still has impact to the overall salary cap calculations for the league but to the Canucks they likely would not include him in their team locked in cap where a team like Arizona would. 

  

11.   If a player starts the season on LTIR but is not expected to miss the entire season, their cap hit will be prorated based on the number of games they are expected to play.  They cannot be taken off LTIR until those games are met.  Doctors already make recommendations on player returns and there is LTIR being a minimum of 10 games or 28 days so there is precedent here.  If a team is worried that a player may return earlier, they can just set the LTIR at a lower amount and effectively increase their team locked in cap number before the season starts.

 

All those rules, and I am sure some more I haven’t considered, to get to the main change

 

12.   Teams may trade for players throughout the season and until the trade deadline without consideration to the cap limit during the year with one caveat.  They still need to abide by a tagging rule, which restrict the team from having commitments to players that causes them to exceed the tagging cap.  Similar to how they do it today.

 

So that is it, I am wondering what people think about the basis of this idea?  Am I crazy, should I leave for another 15 years or should I be the new commissioner of the NHL?

[DrJockitch]

The cap is there to create cost certainty. It actually has probably saved another labour stoppage around COVID as it intrinsically had a mechanism to recoup lost earnings for the owners. 
It does create a more level playing field for teams. The winning teams are the well managed teams, we have spent to the cap and beyond consistently the last decade but have been awful because we have been poorly managed. The cap doesn’t change an owner hiring and standing behind a bad GM for eight years. 
The manipulation of LTIR is a problem but a relatively minor one and gives fans stuff to argue about. 
The owners have found ways for those who really want to to spend a bit above the cap and for the cheapskates to spend a bit below but these aren’t gross abuses. 
I don’t mind an NBA like system where you can bring vets in at “minimum” contracts even when capped out and injuries occur but we also have a more fulsome minor league so it may not be required.

[goalie13]

If I am reading all this right, and it seems you acknowledged this, but all these proposals would succeed in doing is increasing escrow, which the players will never go for.

 

No matter how you tweak the CBA, the core agreement of 50/50 of HRR will remain.  So any proposal that gives the teams more flexibility will have to be balanced off somewhere and the only real way to balance it off is through escrow and the players hate escrow.

[Canuckie8]

I do not intend any rule to impact escrow.  The cap ceiling being too high is the main reason for escrow also being high so the players have to find and agree to the balance they want.  If players want to get rid of escrow, then just lower the cap.  In this new world, by allowing teams to go over the cap after the season starts, it would have no impact to the players total money or the league overall costs.  This is my main point, it is just a different take on the same reality they are living in.  They can make it what they want in a revamped CBA.  By ignoring the cap, after the season starts, players like Phil Kessel can now be traded to a contender at the deadline.  This has a two pronged effect.  The good teams can go for it and improve their team how they want and not worry about fitting them within some arbitrary number.  It also helps the bad teams, get more value for their expiring contracts.  More teams can take on the players, thus possibly creating a bidding war.  I am sure a fan of Arizona, if there are any, would have lover to get something for Phil, instead of him just sitting there to ride out their losing streaks.  What good does that do the player or the team or the fans in that city.

[DrJockitch]

I would like to see a progressive escrow. Ridiculous that the guys making 775k pay the same rate as the guys sucking up 10M plus especially since their careers are usually much shorter. 
No escrow on first million, progressive from there to make up the difference would be what I want to see. 

[Canuckie8]

Hey 6of1, I see you care about player movement concerns as much as I do, although I was trying to take both sides concerns into account when it came to money and contracts.  However, if I could make changes I would also get rid of all NTC and NMC.  I understand why players want them but they are in a sport where it is basically the only jobs in the world where this can happen.  Trades can be exciting and can lead to headlines and more interest.  If the league is serious about making money, they should push hard against them in the next CBA.  It would also, perhaps, do wonders for Canada since it seems half the league has Canada on their NTC...No wonder Canada hasn't won a cup since '93.