– The NHL projects the salary cap for 2016-17 could rise to $74.5 million. That’s over $3 million above the current cap ceiling of $71.4 million. It’s also likely to be an optimistic projection.
For the past two years, the league’s annual December salary-cap projections have come up short. Two years ago, the ceiling was expected to rise from $64 million to $71.1 million. It eventually reached $69 million. Last year’s projection of $73 million ultimately became $71.4 million.
The declining value of the Canadian dollar is largely to blame. In less than two years, the value of the “loonie” fell from par with the American dollar to its current level of $.73 cents US. With seven NHL teams accounting for nearly 40 percent of NHL revenue, those currency fluctuations are keenly felt.
With the ongoing decline in world oil prices dragging down the value of the Canadian dollar, some economists predictt it could fall below .70 cents US by next summer. If so, the league can forget about reaching $74.5 million for next season.
Thanks to the rising cost of attending NHL games, its successful series of outdoor games, lucrative new TV contracts and the likelihood the NHLPA will once again vote to approve its annual five percent escalator clause, the salary cap should increase for next season. However, my guess is it might come in around half of the league’s projected increase,meaning the cap could between $72.5 – $73 million.
-TSN’s Frank Seravalli did an interesting piece last week, looking ahead at what the NHL might look like in 2020. He speculates the league could be in the midst of another lockout by then.
While the current collective bargaining agreement is due to expire on September 30, 2022, both sides get an opportunity to opt out in September 2019. The NHL Board of Governors can do so on Sep. 1, while the NHLPA’s deadline is Sep. 19. If so, the 2019-20 season would be the last under the current CBA.
Player agent Allan Walsh told Seravalli he expects the team owners will opt out early. While it’s a possibility, I doubt the league goes that route. During the previous two CBAs, the board of governors decided not to use the opportunity to bail early.
It’s possible, of course, they could vote differently in 2019, but I believe they’ll want to continue making as much money as possible whilst building up their war chest in anticipation of another lockout in 2022. I also believe there won’t be much willingness to vote for another plunge back into labor uncertainty less than a decade after the previous one.
We also don’t know who’s going to be running the show on the league side by 2019. League commissioner Gary Bettman is 63 years old now and is in his 23rd season. There’s been some whispers among the punditry he could step down by 2020, perhaps soon after the league’s 100th anniversary in 2017. It’s also uncertain if some of the current hardliners among the NHL ownership (led by Boston Bruins owner and C. Montgomery Burns impersonator Jeremy Jacobs) will still be as influential by that point as they once were.
A lot can change in just a handful of years. It’s quite possible both sides could be unwilling to face another protracted labor standoff.
-Excitement among the league board of governors over expansion seems to have cooled over the past year. While Las Vegas and Quebec City went through the expansion consideration process earlier this year, there was no vote scheduled on expansion at the recent BoG meetings.
It doesn’t mean expansion’s off the table now, but it does appear the owners are approaching this more cautiously than during the 1990s. The recent decline in the value of the Canadian dollar could be a factor affecting the Quebec City bid. Las Vegas seems a certainty to land an expansion franchise, but the league might consider having two franchises joining at the same time.
Commissioner Bettman claimed the delay had nothing to do with allowing other cities (like Seattle) to get into the bidding. He insisted it’s just between Las Vegas and Quebec City. He also said there’s concerns among the BoG members over the terms of an expansion draft.
How no-trade/no-movement clauses apply to an expansion draft could also be an issue. You can be players carrying such clauses want to ensure they also apply to expansion drafts. The PA won’t want to see that draft used by some teams simply as a means of attempting to dump a high-salaried player they no longer want.
The delay in the vote might not have anything to do with hoping another NHL city makes a bid for an expansion franchise, but I still believe the league is keen to put a club in the Pacific Northwest. I don’t seem them rejecting interest from potential ownership in Seattle. I believe the NHL’s ideal scenario is expansion to Las Vegas and Seattle, and sending a relocated team to Quebec City.
For now, we’ll just have to wait and see how this plays out. The earliest we can reportedly expect to see expansion take place is 2017-18.