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What You Need To Know About The Nhl Cap


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Guest Godfather

I'll leave it to the mods to put this where it belongs(sorry fellas for not making your jobs any easier). I look around this forum and i find many people still asking questions about the cap and how it all works..and heck you ain't alone i get confused sometimes too, most GM's don't even have it right that's why they have hired financial specialist to handle it. In my few years of research i have compiled here the mostly asked and most important issues about the nhl's cap system to help everyone including myself,understand how it works. I think this maybe a good reference guide.

1) Cap Counts

The people that be who are in charge of individual team finances talk about "cap counts" rather than the salary cap. Because the salary cap is a static figure, whereas the cap count is more like your balance in your bank account. Like your bank account it can move up and down on a daily basis. You see how much a team has left to spend not only depends on how much they have spent, but how long there is left in the season to spend it.

Back in 05-06 season teams had $39 million to spend over 196 days of the regular season. You work those numbers out it boils down to $198,980 per day. If teams spend less than that amount on any given day, the difference in effect goes into a "cap bank" this can be used down the road. HOWEVER borrowing from the future is strictly prohibited.

Think about it like this: a team is in compliance with the cap if it could maintain its roster for the rest of the season and spend $39 million or less for the entire year. In that way, a team's cab bank will come into play at the trade deadline. A team that has averaged a $37 million payroll untill that point could, in theory, acquire players whose salaries total $9 million and still be cap compliant. This is because at the time of the NHL trade deadline, with 40 days left in a 196 day season, only about 1/5 of a players salary will count against the salary cap going forward.

Of course, that's before the injury and bonus exemptions. Il'll explain more later on!

2) How is this cap monitored?

The NHL has set up a secure website where GM's and other team officials can get up-to-the-minute information on player contracts, "cap counts" as well as player's daily salaries. If a GM wants to see the cap impact of a potential trade, he can copy a player's salary details from the site and paste it into his own team's spreadsheet. He could also just monitor the official payroll of the other 29 teams.

3) Penalty

Penalties for a team to be found in violation of the salary cap can range from a slap on the wrist to a seven figure fine or to losses of any games that used an over-the-cap roster.

4) Injuries

A team can be granted a long term injury(LTI) exemption for any playe who is injured and is certified by a doctor to miss at least 10 games and 24 days. This means the team can exceed the cap by an amount equal to that player's salary, using many players as it wants to "replace" him. The exemption can be granted at any time during an injury, using as many players as the team wishes.

So a guy is out for 4 months for knee surgery, no problems on the cap front. It's when the short term woes add up that trouble kicks in . ALL injured players not on LTI count towards the cap. So what could happen is if a team has a bunch of short term injured players they may have to be forced into dressing less than 18 skaters because to much cap space is taken up on the injured list.

5) Bonuses

There are 3 players that are allowed to earn a performance bonus: Rookies(who signed a contract after the lockout). 35 + yr old vets who have signed 1 yr deals and players returning from LTI. The bonuses count in full towards the salary cap. But teams with players potentially earning bonuses can exceed the cap(this is called the "Upper Limit" in CBA slang)by 7.5%. So basically it's an added 7.5% to the salary cap. But here's where it gets interesting: Teams that exceed the cap because of bonuses have their salary cap the following season reduced by the amount of the excess.

6) Trades

Teams aren't allowed to allocate portions of a players salary to their respective salary caps as part of a trade. If you want the player, you would have to take the contract in it's entirety.

7) How is the Cap estabilished?

It is based on 54% of NHL revenues at the end of the season but the way it's going the cap may not move from where it is at the moment.

--Hope this help's if anyone would like to add anything please, i would think together we could all make this a great reference guide for any salary cap issues!--

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Very good post overall. A couple minor details I'd like to expand on:

4) Injuries

A team can be granted a long term injury(LTI) exemption for any playe who is injured and is certified by a doctor to miss at least 10 games and 24 days. This means the team can exceed the cap by an amount equal to that player's salary, using many players as it wants to "replace" him. The exemption can be granted at any time during an injury, using as many players as the team wishes.

So a guy is out for 4 months for knee surgery, no problems on the cap front. It's when the short term woes add up that trouble kicks in . ALL injured players not on LTI count towards the cap. So what could happen is if a team has a bunch of short term injured players they may have to be forced into dressing less than 18 skaters because to much cap space is taken up on the injured list.

Just to simplify this, whatever salary is made while on long term injury is effectively just added to the cap. So if you have a 5 million player miss half the season, that means that your cap goes from 52 million to 54.5 million - although his salary counts against it in full.

5) Bonuses

There are 3 players that are allowed to earn a performance bonus: Rookies(who signed a contract after the lockout). 35 + yr old vets who have signed 1 yr deals and players returning from LTI. The bonuses count in full towards the salary cap. But teams with players potentially earning bonuses can exceed the cap(this is called the "Upper Limit" in CBA slang)by 7.5%. So basically it's an added 7.5% to the salary cap. But here's where it gets interesting: Teams that exceed the cap because of bonuses have their salary cap the following season reduced by the amount of the excess.

That is bang on, except I believe you were a bit off in explaining the last part. I'm sure you know this, but for others who may not: the "excess" is only counted if the bonuses are actually achieved (I'm about 90% sure of this). That is the main reason you can put them off. The bonuses can count against your cap this season if you want, but if they don't achieve them, this is wasted space. So instead, you are allowed to go a bit over, and if they do in fact achieve the bonuses, you worry about it the next season. If not, no money was paid, and you don't need to worry about a cap hit.

Another interesting point here is that if you are counting a bonus in the current season, that bonus counts against the cap until it is literally impossible to achieve. So, for example, if a bonus is to score 50 goals and the player has 1 goal after 50 games, it still counts since it is theoretically possible the player will score 49 goals in the last part of the season. However, if the bonus is for playing in all 82 games and the player is on long term injury, I believe the team can wipe the bonus from the books.

but the way it's going the cap may not move from where it is at the moment.

That's not what Bettman said last time he updated his owners. Projected salaries mean another cap increase. I would expect the cap to rise every season purely due to inflation, but these 5 million jumps will stop at some point.

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Another interesting thing with the cap is that players in the minors don't have their salaries count against the cap (unless they signed the deal when they were 35 or older) - and Brian Burke put it well when he said (paraphrasing) "there really is no salary cap, there's just how much money you owner can stomach being wasted in the minors". I think this is something that will be addressed next CBA, but effectively, with the exception of players 35 and older, and with the exception of the few no movement clauses, any salary can be wiped off the cap books instantly, and it's something I think you'll see happen more and more. You'll see very good players, but ones who don't justify their salary, rotting in the minors because they signed a long term deal that they never lived up to and now their team needs cap room.

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Guest Godfather
Another interesting thing with the cap is that players in the minors don't have their salaries count against the cap (unless they signed the deal when they were 35 or older) - and Brian Burke put it well when he said (paraphrasing) "there really is no salary cap, there's just how much money you owner can stomach being wasted in the minors". I think this is something that will be addressed next CBA, but effectively, with the exception of players 35 and older, and with the exception of the few no movement clauses, any salary can be wiped off the cap books instantly, and it's something I think you'll see happen more and more. You'll see very good players, but ones who don't justify their salary, rotting in the minors because they signed a long term deal that they never lived up to and now their team needs cap room.
Thank You Graeme for contributing to this topic, you've made some very good points. I will look into the bonuses some more but im pretty sure you are correct in that case and i will change my last statement because your right money does inflate and right now the cap could easily fluctuate, as well as every year the NHL is growing in popularity.
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Graeme, I'm pretty sure you're bang-on with the assessment of the bonuses. I did a lot of research in the past on them since I had to explain it several times on the forum, and I'm almost positive that's what I recall finding as well.

Actually I probably got some of that information from posts of yours. :P Since trying to read the CBA is hard enough as it is, we basically pick up all the little rules and catches just from reading various sources.

as well as every year the NHL is growing in popularity.

You'd think so :D

But actually, I don't think this is correct. Last season attendance decreased, but owners increased ticket prices so it more than made up for it. I think the faithful fans have become more faithful and that's what's propping it up, the NHL is still having a horrible time with its popularity in the USA.

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Guest Godfather
Actually I probably got some of that information from posts of yours. :P Since trying to read the CBA is hard enough as it is, we basically pick up all the little rules and catches just from reading various sources.

You'd think so :D

But actually, I don't think this is correct. Last season attendance decreased, but owners increased ticket prices so it more than made up for it. I think the faithful fans have become more faithful and that's what's propping it up, the NHL is still having a horrible time with its popularity in the USA.

Maybe because of the NFL season?

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  • 2 months later...
Guest 1970 Habs

Latest on the Cap Projections

The cap is increasing again next season, and, according to NHLPA projections presented on Wednesday at a meeting of certified agents chaired by union executive director Paul Kelly, it will do so rather dramatically.

We've learned that the Players Association - with input on the number from the NHL - projects revenues to reach $2.575B this season, an 11.1-percent increase over the 2006-07 Hockey Related Revenue (HRR) of $2.318B. The cap should increase at a slightly higher rate because the players' share of the gross increases from 55.5 percent to 56.333 percent at the $2.5B revenue threshold. It assumes the players will once again exercise their option to approve a five-percent inflation bump.

Thus the PA estimates that the cap will be approximately $56.3M - give or take in concert with the final HRR number that will be determined by playoff revenues - next season, an increase of $6M from this year. It means clubs will be able to maintain summer rosters of up to nearly $62M in payroll before personnel decisions come due at the end of the training camp.

It also means the floor next season will be $40M, or slightly above that. It seems like expensive flooring, but not so much, actually. For of all 30 NHL teams, only Columbus (barely), Nashville and Phoenix will have invested less in payroll this season.

If HRR continues to increase annually by approximately 11 percent, the players' share will increase to its upper-limit of 57 percent at $2.7M, then the team cap will hit approximately $62M in 2009-10, and $68M in 2010-11. In other words, should they wish to do so, the Penguins will have no cap issue to prevent them from keeping both Sidney Crosby and Evgeni Malkin, just as the Blackhawks will have ample space to retain both Patrick Kane and Jonathan Toews.

According to multiple sources, the PA contends the growth of NHL revenues since the end of the lockout is 100-percent attributable to a combination of the increased strength of the Canadian dollar and steadily escalating ticket prices. Sixth Avenue could argue fans' willingness to pay higher prices speaks to the strength and popularity of the NHL, and they would not be all wrong.

The CBA is set to expire following the 2010-11 season, though the PA has the option of either terminating the agreement after next season (Sept. 15, 2009), or extending it a year through 2011-12. There is essentially no chance of the union opting out early, not even Scott Boras would recommend that. It is more likely the union will extend the agreement, though that issue has not been addressed at any length.

The PA estimates the players' total payroll has increased by approximately $12M from the final uncapped season of 2003-04. The union believes the players will receive 98-percent of the face value of their 2007-08 contracts after final escrow accounting.

Source: http://msn.foxsports.com/nhl/story/7970000...ue-for-Penguins

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The salary cap is getting ridiculous. <_<

Seriously, the managers messed it all up, again.

Exactly. We'll get back to the same point we were before but with some revenue sharing. Ridiculous.

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The salary cap is getting ridiculous. <_<

Seriously, the managers messed it all up, again.

Exactly. We'll get back to the same point we were before but with some revenue sharing. Ridiculous.

Can one of you please explain these comments, because I have no idea where you're going with them. The problem before was that salaries were way too high an expense and most teams weren't making money. Now, regardless of the actual dollar amount, salaries are in check around 55% of revenues. In fact, the cap increasing actually means more profits for the owners in this system (so jennifer, the managers are actually doing a very good job). So we are not going back to pre-lockout, exactly the opposite in fact - the owners are making more money. The cap has worked tremendously at achieving its one single goal - keeping player salaries in check.

The problem is people look at the number 56k and think "wow that's way too high" - but this number is purely arbitrary as far as the CBA is concerned. The only thing that really matters is the percentage of revenues being spent on salaries, and this is still around the 55% mark - so the cap has worked beautifully.

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Guest fansince1975
Can one of you please explain these comments, because I have no idea where you're going with them. The problem before was that salaries were way too high an expense and most teams weren't making money. Now, regardless of the actual dollar amount, salaries are in check around 55% of revenues. In fact, the cap increasing actually means more profits for the owners in this system (so jennifer, the managers are actually doing a very good job). So we are not going back to pre-lockout, exactly the opposite in fact - the owners are making more money. The cap has worked tremendously at achieving its one single goal - keeping player salaries in check.

The problem is people look at the number 56k and think "wow that's way too high" - but this number is purely arbitrary as far as the CBA is concerned. The only thing that really matters is the percentage of revenues being spent on salaries, and this is still around the 55% mark - so the cap has worked beautifully.

100% correct.

It is a salary cap. Richer teams like Toronto / Rangers have to send a cheque to the NHL. Maybe even Montreal has to send a cheque to the NHL. The poorer teams like Nashville then get a cheque from the NHL.

The players get 55% of revenues. This means the team gets 45% of a GROWING pie to pay for expenses like staff, farm team, scouting, arena, taxes, etc.

If the salary cap does go up by $6 million I really hope BG signs UFA players ASAP. Offer sheets will occur IMO with that kind of extra money floating around. It is VERY important that GMs be careful with the new salary cap as a large portion of this is due to the Cdn teams making a lot more money with the rising Cdn dollar. If the Cdn dollar goes back to $0.80 or $0.70 the effect on league revenue would be huge. All of a sudden league revenue would drop 10% percent instead of increaing 11% percent. Therefore the smartest CDN teams will only sign a new UFA player IF they will have available cap space with expiring contracts. Since BG is one of the smarter GMs we will be fine if the CDN dollar returns to normal levels.

I would like to see BG sign Streit (UFA) before July 1st. I would like to see Montreal go after a player like Hossa if the $6 million increase is true. I would like Montreal to go after a face-off expert like Fedorov or Sundin or Holik on a one year bonus heavy deal. It would be nice to go after a top defenceman but I doubt BG will attempt this as Montreal has lots of young D in the system. It would be nice if Montreal was in the Hossa sweepstakes with a front end loaded deal just in case league revenues tank. But mainly I hope that BG is able to keep the core players together long term. Which might mean no room for a Hossa salary. :(

I believe that the HABS purchase US dollar futures before the season begins to reduce risk as player contracts are in US dollars.

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Can one of you please explain these comments, because I have no idea where you're going with them. The problem before was that salaries were way too high an expense and most teams weren't making money. Now, regardless of the actual dollar amount, salaries are in check around 55% of revenues. In fact, the cap increasing actually means more profits for the owners in this system (so jennifer, the managers are actually doing a very good job). So we are not going back to pre-lockout, exactly the opposite in fact - the owners are making more money. The cap has worked tremendously at achieving its one single goal - keeping player salaries in check.

The problem is people look at the number 56k and think "wow that's way too high" - but this number is purely arbitrary as far as the CBA is concerned. The only thing that really matters is the percentage of revenues being spent on salaries, and this is still around the 55% mark - so the cap has worked beautifully.

The salary cap was created for two reasons:

  1. to prevent richer teams like Toronto and the Rangers (amongst others) to try buying teams; and
  2. to keep a parity in the salaries of each team across the board.
When they went back to work, most teams spent about the same cap-wise. If the cap keeps on going up, you'll still have the same disparity between the top spending teams and the bottom ones with owners who can't afford high payrolls.

Result? We're getting back to the same point where we were before the lockout, but with a salary cap in place.

Having said that, it's not the players' fault, it's because some owners have deeper pockets than others. I don't have time to go back to what teams spent on salary before and after lockout year by year, but the higher the cap, the bigger the gap will be and that, even if the "floor" is raised each year. At some point, the floor will be too high for some owners. For that and many other problems in the NHL, I blame Bettman, but that's a whole different topic of its own.

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The salary cap was created for two reasons:
  1. to prevent richer teams like Toronto and the Rangers (amongst others) to try buying teams; and
  2. to keep a parity in the salaries of each team across the board.
When they went back to work, most teams spent about the same cap-wise. If the cap keeps on going up, you'll still have the same disparity between the top spending teams and the bottom ones with owners who can't afford high payrolls.

The cap was never about parity. The league said this to try and make it look like they were locking out the players for the fans sake. The salary cap was created for one single reason: to make the owners money. The owners could care less about parity, with the exception that parity may mean a bit more money in attendance. But as a whole, they just wanted to make money, and the main way to do this was to keep players salaries in check. If the NHL really cared about parity, they would have implemented some real revenue sharing that made sure all teams could afford to spend to the cap.

Result? We're getting back to the same point where we were before the lockout, but with a salary cap in place.

Having said that, it's not the players' fault, it's because some owners have deeper pockets than others. I don't have time to go back to what teams spent on salary before and after lockout year by year, but the higher the cap, the bigger the gap will be and that, even if the "floor" is raised each year. At some point, the floor will be too high for some owners. For that and many other problems in the NHL, I blame Bettman, but that's a whole different topic of its own.

The difference this time is that revenue is growing along with players salaries. Now I guess the problem with a league salary cap is it takes the average revenue and doesn't account for differences in teams. However, if most teams are growing their revenue so fast (one or two teams growing wouldn't have this big of an effect - most teams are growing) while others aren't increasing at a similar rate, this is primarily a problem caused by the bottom teams who aren't staying financially competitive. They need to do better jobs to promote their team, relocate, or fold. I don't consider the fact that some teams aren't doing well financially to mean the salary cap isn't working. The salary cap protects the leagues owners as a whole, it isn't meant to protect individual franchises or mean they can afford to spend as much as other teams. If the NHL really wanted this they could just implement some real revenue sharing (which the players want, but the NHL opposes) and this would be solved.

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The cap was never about parity. The league said this to try and make it look like they were locking out the players for the fans sake. The salary cap was created for one single reason: to make the owners money. The owners could care less about parity, with the exception that parity may mean a bit more money in attendance. But as a whole, they just wanted to make money, and the main way to do this was to keep players salaries in check. If the NHL really cared about parity, they would have implemented some real revenue sharing that made sure all teams could afford to spend to the cap.

The difference this time is that revenue is growing along with players salaries. Now I guess the problem with a league salary cap is it takes the average revenue and doesn't account for differences in teams. However, if most teams are growing their revenue so fast (one or two teams growing wouldn't have this big of an effect - most teams are growing) while others aren't increasing at a similar rate, this is primarily a problem caused by the bottom teams who aren't staying financially competitive. They need to do better jobs to promote their team, relocate, or fold. I don't consider the fact that some teams aren't doing well financially to mean the salary cap isn't working. The salary cap protects the leagues owners as a whole, it isn't meant to protect individual franchises or mean they can afford to spend as much as other teams. If the NHL really wanted this they could just implement some real revenue sharing (which the players want, but the NHL opposes) and this would be solved.

I strongly disagree... I don't believe in the conspiracy theory, the under-lying of this and that. I've had a long day and I don't feel like debating this, especially not here as it's totally off-topic anyway, so I won't for now.

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I strongly disagree... I don't believe in the conspiracy theory, the under-lying of this and that. I've had a long day and I don't feel like debating this, especially not here as it's totally off-topic anyway, so I won't for now.

Alright, although I don't see how anything is a conspiracy theory. The salary cap was put in place to make the owners money, that's not a conspiracy, it's the way major professional sports leagues are run.

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Guest fansince1975

I thought I had a post. Lost the post. Then found it in this thread.

Parity. To a large extend it does exist. Just look at the East and West. Lots of teams very close to the playoffs in or out. However, good scouts, signing the right palyers, signing for the right amount of money, goaltending, rookies, entry level contracts, good coaches and GMs can make some teams better over the long haul.

When Carolina won the cup two years ago it was indicated on either CBC or TSN that Carolina lost around $10 million. The broadcaster went on to say the the Leafs paid for some other team to win the Cup as $10 or $20 million went from the Leafs to the NHL to give to poorer teams like Carolina.

I think that the current salary cap is the best way for parity. Otherwise around 10 teams would fold. Not good for NHL players and maybe not good for the league. A few teams like Toronto and Rangers would try to buy a Cup but they forgot that many factors go into winning not just big salaries.

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Guest 1970 Habs

NHL attendance sets record, exceeds 21 million in '07-08

Attendance increased by 1.8% over last year.

A season of suspenseful races and outstanding performances on the ice was accompanied by historic levels of attendance at National Hockey League arenas in 2007-08. Total attendance of 21,236,255 and the per-game average of 17,265 set records in each category and marked the third consecutive season of growth.

"Our fans have outdone themselves, and everyone at the National Hockey League is extremely appreciative,” NHL Commissioner Gary Bettman said. “This unprecedented support is only the latest affirmation that our fans are the best fans anywhere.”

NHL teams played to 93.6% of capacity over the 1,230 games in outdoing the 2006-07 season figures of 20,861,787 and 16,961 per-game, or 91.7% of capacity. In 2005-06, the figures were 20,854,169 and 16,955. NHL games have attracted 20 million or more in each of the past seven seasons.

In 2007-08, the six Canada-based teams once again sold every possible ticket. With sellout crowds of 21,273 at Bell Centre for each of their 41 home games, the Montreal Canadiens again led in per-game average. The Pittsburgh Penguins sold out their season for the first time in franchise history and were joined by the Philadelphia Flyers (19,556), the Minnesota Wild (318 consecutive sellouts of 18,500-plus since they entered the League), the New York Rangers (18,200) and the Anaheim Ducks (17,193). Several other clubs, including the Buffalo Sabres and San Jose Sharks, were virtually sold out.

The St. Louis Blues, (up 41% to 17,610 per game), the Chicago Blackhawks (up 32% to 16,814), the Washington Capitals (up 11% to 15,473) and the New Jersey Devils (up 10% to 15,564 at their new home, Prudential Center) all enjoyed significant increases.

The aggregate and per-game average figures included sellouts of 17,426 for each of the season-opening games at between the Los Angeles Kings and Anaheim Ducks at O2 Arena in London. For the purposes of calculation, the Buffalo Sabres were credited with a normal regular-season sellout (18,690) for the Winter Classic against the Pittsburgh Penguins on New Year’s Day at Ralph Wilson Stadium; including the full Winter Classic attendance of 71,217, the aggregate NHL attendance increases to 21,288,782, and the per-game increases to 17,302.

Source: http://www.nhl.com/nhl/app/?service=page&a...rticleid=359473

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Wow, crazy. I know last year when the cap jumped attendance actually decreased, but this was offset with higher ticket prices. That's surprising, especially considering the Canadian teams were sold out to begin with (can't get any better attendance).

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