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NHL salary cap to be temporarily set at $70.3-million

How's this for a strange scenario for the NHL's salary cap this off-season.

General managers were told at a meeting in New York this week that the upper limit (or cap) will rise to roughly $70.3-million (U.S.) from where it was at for the 2011-12 season ($64.3-million).

The catch is that the cap is only a temporary one, as the league's CBA expires on Sept. 15 and the new agreement could have a vastly different structure than this one.

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What that means is that GMs will be working under one cap all summer and in free agency, but then ultimately dealt another one whenever a new agreement is finally signed between the league and the NHLPA.

Teams are also permitted to spend 10 per cent more than the cap during the off-season, meaning a really ambitious GM could spend $77.3-million or so before having to get under the eventual cap on the final day of training camp.

The way the NHL currently calculates the salary cap is tied directly to their revenues from the season before, and commissioner Gary Bettman put that figure at a record $3.3-billion in his address before Game 1 of the finals on Wednesday.

(More playoff revenues still have to come in, so that figure can rise or fall if the finals end in a sweep or go the full seven games.)

The basic calculation for the cap is league revenues multiplied by the players' share (currently 57 per cent) minus player benefits and then divided by the 30 teams. That determines the salary "midpoint," which is always $8-million under the cap.

There is also a 5-per-cent "inflator" that is often applied to the midpoint and has helped boost the cap from $39-million to $70.3-million since 2005-06.

So, for example, to get the cap figure, this is a sample calculation:

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Midpoint: ($3.3-billion x .57) - $90-million in benefits / 30 teams = $59.7-million

Inflator: 59.7-million x 1.05 = $62.7-million

Cap: $62.7-million + $8-million = estimated $70- to $71-million

The $70.3-million figure is slightly lower than what I've come up with here likely as a result of the league working with a number just under $3.3-billion.

What all those numbers mean, basically, is if the NHL succeeds in bringing down the players' share of revenues significantly and the CBA functions similarly, the cap could drop sharply.

Rumour has it, for instance, that the league's first offer in negotiations will be under 50 per cent. That kind of a drop in the players' share would mean a cap of $63-million or lower under the current system.

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But again, we don't know exactly what the new CBA will look like and how its cap calculations will work, so this is really just a fun exercise.

It is, however, something to keep in mind when teams head into free agency armed with all those extra dollars.

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About the Author
Hockey Reporter

James joined The Globe as an editor and reporter in the sports department in 2005 and now covers the NHL and the Toronto Maple Leafs. More

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