NHL Salary Cap Could Significantly Increase for 2018-19

by | Nov 19, 2017 | Soapbox | 6 comments

During a press conference in Montreal on Friday, NHL commissioner Gary Bettman said league revenues for 2017-18 could be between $4.5 – $5 billion. If so, that means the salary cap could significantly increase for 2018-19.

Salary-cap fluctuations are tied to league revenues. During the previous collective bargaining agreement (2005-06 to 2011-12), the salary-cap ceiling rose from $39 million to $64.3 million. Throughout that period, the cap rose annually by roughly $5 million.

Since the implementation of the current CBA, the cap ceiling once again climbed by $5 million from $64.3 million in 2013-14 (the first full season under the current agreement) to $69 million for 2014-15. Since then, however, the gains were modest. In 2015-16, the cap rose to $71.4 million. In 2016-17, to $73 million. For this season, to $75 million. Those increases were largely due to the NHL Players Association agreeing to invoke their annual five-percent escalator clause.

As The Athletic’s James Mirtle observed, if NHL revenues “are as robust as Bettman claims, the salary cap will go way up next summer.” Based on the commissioner’s projects, Mirtle suggests the cap ceiling to rise to plausibly “$80-$82 million. Pretty interesting.”

Indeed.

So what’s changed to trigger Bettman’s optimistic forecast?” One factor, of course, is the addition of the Vegas Golden Knights. The expansion club is providing a boost to league coffers this season.

Another is the improvement in the value of Canadian dollar this year against the American greenback. With seven Canadian NHL teams accounting for over 40 percent of league revenues, any variations in the value of the “loonie” affects the salary cap. In 2013, it was worth .97 cents USD but steadily decline in subsequent years, bottoming out at .73 cents USD by May 2017. It’s since rallied, fluctuating between .78 cents to .80 cents USD.

An increase of $5 million – $7 million in the 2018-19 cap ceiling will provide welcome relief for several NHL clubs carrying limited salary-cap room for next season. Fourteen teams – the Anaheim Ducks, Boston Bruins, Chicago Blackhawks, Detroit Red Wings, Edmonton Oilers, Florida Panthers, Los Angeles Kings, Minnesota Wild, Montreal Canadiens, Nashville Predators, Ottawa Senators, Pittsburgh Penguins, St. Louis Blues and Tampa Bay Lightning – currently have over $60 million invested in their respective cap payrolls for ’18-’19.

Several of those clubs have key players to re-sign. Others, meanwhile, could use the extra cap space to bolster their rosters. 

A big bump in the cap ceiling could have a substantial effect upon next summer’s trade and free-agent markets.

With such notables as John Tavares, Joe Thornton, Rick Nash, the Sedin Twins, James van Riemsdyk, John Carlson, James Neal and Evander Kane eligible for unrestricted free agency next July, the extra cap space could tempt more teams to get into the bidding for those players.

If contract negotiations stall for noteworthy restricted free agents such as Ottawa’s Mark Stone, Winnipeg’s Jacob Trouba, the NY Rangers’ J.T. Miller, Toronto’s William Nylander, Detroit’s Dylan Larkin or Carolina’s Noah Hanifin, a club flush with cap room could be tempted to employ the rare tactic of signing one of them to a lucrative offer sheet. Perhaps one of them gets targeted by a team keen to invest its windfall in the trade market. 

A big raise in the cap ceiling could also affect the cost of signing those players. With clubs carrying much more cap room compared to recent years, the price of signing next summer’s top free agents could be higher than anticipated. Signing a superstar such as Tavares could jump from $10.5 million annually to as high as $13 million. Never underestimate the ability of NHL general managers to overpay for talent. 

Agents representing players eligible for new contracts in 2019 could seek even higher asking prices if their teams opt to open contract talks next July. Top stars such as Toronto’s Auston Matthews, Tampa Bay’s Nikita Kucherov, Los Angeles’ Drew Doughty, Ottawa’s Erik Karlsson, Columbus’ Sergei Bobrovsky and Dallas’ Tyler Seguin could cash in big time. 

Bettman usually makes his annual salary-cap projections for the following season in early-December. By then, we’ll hopefully start to get a clearer picture of what the cap ceiling will be for 2017-18.

 








6 Comments

  1. if this happens mathews could get more money than mcdavid!

  2. This is great news for John Tavares. If the Islanders arena issues aren’t resolved and he goes on the free market this increase in salary cap will bring a whole a lot of teams in.
    A team that desperately needs scoring punch is the Flyers with approximately 9 million coming off the books, With Fillipu and read plus the increase of the salary cap translates into flyers being able to spend up to 12 million on Tavares. As a flyer fan we can only hope.

    • why would tavares want to go to philly they suck he wants to play in toronto if they have cap room they will sign him and you can start the parade

  3. The #1 reason is the CDN dollar not expansion. The expansion fee paid for by Vegas isn’t included in HRR. The income Vegas is generating is almost off set by the salaries paid out so it’s impact on the NHL’s revenue stream is some what limited.

    The NHL’s new electronic media efforts are also starting to bare significant fruit.

  4. So let the stupid get stupid

  5. if the canadian markets contribute over 40%
    in league revenue why is Betteman so against
    Quebec getting a floundering franchise, Florida,
    Carolina??

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