Kukla's Korner Hockey
Entries with the tag: salary cap
Instead of discussing all the "could'ves" and "nearly" trades that the Ottawa Sun's Bruce Garrioch discusses in his sunday column, this reminder of the state of the salary cap as it applied to the trade deadline might set more realistic expectations for fans who believe that no matter what happens to the "upper limit," we'll see another feeding frenzy in July:
Turns out this was the dollars and sense deadline.
"If you were going to take on money it may not have made sense," said a league executive Friday.
Amongst the deals that were made just before last Monday's NHL trade deadline, not many involved players with term which tells you teams are worried where the cap is going to go next year with the Canadian dollar taking a slide and concerns the NHLPA may not use its 5%-inflator.
"Lots of teams are wondering what's going to happen with the cap and they were scare off from doing anything," said another executive.
"That's why they were so careful with their moves."
That doesn't mean there was a shortage of talk. Teams still discuss moves like they're going to make them but when push comes to shove the general manager's found it difficult to get anything done.
Garrioch continues, and if the NHLPA does not use its 5% inflator clause because of escrow withholding concern, the cap might not go up from $68 million to anything more than $69 or $70 million this summer, yielding a cap crunch of a kind we haven't seen in a decade.
The New York Times' Jeff Z. Klein wrote an exhaustively comprehensive article regarding the decline of the Canadian dollar as it applies to the NHL's salary cap, the health of Canadian and small-market American franchises, the Forbes valuations of NHL teams, possible expansion and/or relocation and the long-term health of the league in wide historical context, factoring in the NHL's TV deal with Rogers, the percentage of revenues coming in from Canada and the league's growth in American revenues by staging Winter Classics and Stadium Series games. It's a helluva article.
The most intriguing part comes from NHL deputy commissioner Bill Daly, who suggests that the 88-cent Loonie should not negatively impact the salary cap for the 2015-16 season:
“I expect there to be a healthy rise in the salary cap for next season,” Bill Daly, the deputy commissioner, said last week. “The Canadian dollar would have to continue to fall in a material way for that to change.”
For the N.H.L., a strong Canadian dollar means strong business growth. But with the Canadian dollar skidding, speculation is rife that the league’s bottom line may suffer, triggering a cascade of side effects, including a stagnant salary cap for the 2015-16 season.
While the boss is away, the talking monkey will play...
There's been a significant amount of consternation from both hockey fans and general managers regarding Gary Bettman's weenie-ish remarks suggesting that the NHLPA needs to be consulted regarding the salary cap's upper limit and range--which may not be determined until Monday, all of one day before free agency begins--and now we're finding out thhe reason why Bettman said what he did: he's playing hardball with the PA regarding factoring in next year's Canadian TV revenue, to the point that he's offering a SUPER lowball "upper limit":
Earlier this morning, Pierre LeBrun, Darren Dreger and Elliotte Friedman explained the TV revenue-vs-escrow issue:
Sunday night, the NHL's "offseason" kicked off in earnest as the Avs and Jets filed for arbitration to avoid pitching qualifying offers to Ryan O'Reilly and Michal Frolik, respectively.
Today, things will get more interesting as the cap-compliance buy-out market begins (The Score's Thomas Drance and Justin Bourne listed 5 locks in that department), and after the NHL Awards take place in Las Vegas on Tuesday, June 24th, the NHL's new "Wining and Dining" period will begin and allow teams to make their pitches to free agents between June 25th and July 1st.
Conveniently, the NHL's Board of Governors will meet in Philadelphia ahead of the draft on the 27th and 28th, so it's highly likely that players will come to Philadelphia to field sales pitches from interested teams.
On Sunday evening, the Globe and Mail's James Mirtle penned something of an off-season blueprint, discussing potential cap-compliance buy-outs, teams that exceeded the salary cap to give veteran players bonus contracts, and he also noted that the NHL and NHLPA have yet to determine the upper limit of the salary cap for the 2014-2015 season.
Mirtle believes that the estimated $69.5 million upper limit could receive a boost into previously-suggested $70+ million territory for a very specific reason:
From Adam Kimelman at NHL.com:
What general manager wouldn’t want to see Steven Stamkos centering his first line? Or Drew Doughty or Keith Yandle patrolling his blue line? Those players, and other emerging stars, are available for all 30 teams.
So why aren’t they getting any offers?
Because those players, and others like them, are restricted free agents, meaning their current team reserves the right to match any offer that player receives.
Since the summer of 2005, only six restricted free agents have been signed to offer sheets, most recently last year, when the San Jose Sharks signed Chicago Blackhawks defenseman Niklas Hjalmarsson to a four-year, $14 million deal. Of those six offers, five were matched; the exception was Dustin Penner, who left the Anaheim Ducks for the Edmonton Oilers and a five-year, $21 million contract in the summer of 2007. The Ducks received first-, second- and third-round picks from the Oilers in the 2008 Entry Draft as compensation.
Why the lack of offer sheets?
From Georges Laraque, guest posted at Michelle Kenneth’s Hockey & Musings:
Yes, in an 82-games season every team has a chance to win, but if you look at the stats over the last couple of years, it’s always the same teams that make the playoffs and have a shot at success. Even with a salary cap, players choose where they want to play. Sometimes the best players, or the best free agents, are willing to take a pay cut just to fit under the cap so they can play with a top team. Sure, they’re perfectly within their right to do that, but it’s still unfair for the bottom teams. And when these guys choose their destination, they always chose the same few teams, so if you’re a bottom team, you will have to overpay top guys to attract them to your team, but you will never win. Some teams in the NHL develop great prospects, and every year they look like they’re slowly rebuilding their team, but after a couple of years, those prospects that become star players go somewhere else and the rebuilding process starts all over again. Without a good free agent or two on your team, you cannot win, and without a winning team, you cannot attract the right players to get your club to win.
From Chris Kuc at the Chicago Tribune:
“We should know the definitive (cap) number very soon (but) it’s going to be in that range,” Bowman said Wednesday. “It’s certainly going up from where it was ($59.4 million). We’re not in the salary-cap crunch that we were in. We’re able to obviously do some different things and we’re not as stuck as we were a year ago.”
The summer following the Hawks’ Stanley Cup championship in 2010 was marked by the departures of 10 players from that that title-winning team as Bowman battled the salary cap. But things are different this time around.
“It’s a nice change, to be honest,” said Bowman, who is in Minnesota for this weekend’s NHL Draft. “We’re not trying to deal players to get to the cap. We have room to add players. Having that additional flexibility is going to help us not only in the summer but during the season when there may be opportunities to pick up players. But you have to have cap space to do that.
From Ken Campbell at The Hockey News:
With Gerber’s current cap hit at $3.7 million, he is virtually untradeable for the Senators. Let’s say, for the sake of argument, the Senators could find a team looking for some goaltending depth for the last two months of the season. Any team wanting to trade for Gerber would owe him $1.4 million for the remainder of the season if it made a deal Feb. 1.
And there’s absolutely no way any team is going to commit that kind of cap space to Gerber. But what if the Senators were willing to pick up half - or more - of the remainder of the contract? Then Gerber might be a more viable option.
The only problem is that isn’t allowed under this collective bargaining agreement.
From Paul Kukla at NHL.com:
This is the main reason we are not seeing many trades early in the season—the cap situation prevents it.
You may say, “But my team is way below the cap, they can afford so-and-so.” True, but do remember, teams have established their own internal cap figure and may not want to go above it for budgetary reasons.
So, the first thing that should be in your mind when you think of or read about a possible trade is, does it fit within the cap. If not, move on and start thinking of a trade that not only will make sense, but also fit within the salary-cap structure.
Tom Benjamin at Canucks Corner responds to a reader question on the impact of the latest exchange rates on league revenue, the salary cap and revenue sharing.
First, I don’t think the Canadian dollar will necessarily stay where it is. The value of the dollar is tied to oil prices and I expect energy prices to rise, not fall. Second, even if the Canadian dollar continues to fall, the impact next year will not be enough to actually drop NHL revenues. If all other things remain more or less equal - the league “enjoys” a small increase in real revenues - the salary cap would still go up a little bit. Third, any adverse impact of the changing Canadian dollar will fall mostly on the Canadian teams. It will mostly help the revenue challenged teams in the United States if the salary cap level stabilizes.
Read on for more, including how the American economy may continue to negatively affect the NHL this coming season.
From Bruce Garrioch at the Ottawa Sun,
That means Ottawa only has $9.8 million left to sign winger Antoine Vermette and defenceman Andrej Meszaros while it searches for a second-line winger and a puck-moving defenceman.
The Senators usually like to keep $1 million for injuries or a possible move at the trade deadline, so Murray is in a bit of a pickle as he awaits Vermette’s arbitration case.
A league executive predicted yesterday that based on Vermette’s 24 goals and 29 assists last season, he’ll probably be awarded around $3.5 million in arbitration. The executive said the $3.75-million average salary R.J. Umberger, who had 13 goals and 37 assists last season, recently signed for with Columbus is a good comparison.
from Pat Hickey of the Montreal Gazette,
It’s a tossup which team is in the worst position vis-a-vis the salary cap in the NHL, the Los Angeles Kings or the Anaheim Ducks.
The Kings are $12 million below the $40-million floor and they have been non-players in the free-agent market. They do have some restricted free agents like Jarret Stoll and Patrick O’Sullivan to sign, but they might be forced to overpay just to meet the minimum.
The Ducks are one of four teams that are currently above the $56.3-million cap. They have overspent by $2.4 million and it can’t all be Kevin Lowe’s fault. Other teams over the cap are the Philadelphia Flyers, Chicago Blackhawks and the Calgary Flames.
more NHL topics…
CBC asks the question, “What’s behind the big NHL free-agent salaries?”
That’s the word New Jersey Devils general manager Lou Lamoriello used when asked for his reaction to the amount of money tossed around on July 1, the first day of the National Hockey League’s free-agency period.
From Lyle Richardson at The Hockey News,
GM Paul Holmgren would like to re-sign restricted free agents Jeff Carter, R.J. Umberger and Randy Jones, but with over $47 million already committed to next year’s payroll, Holmgren probably won’t have enough cap space to retain the three even though the upper limit is expected to rise to around $56 million next season.
Holmgren also has to consider whether to retain any of his unrestricted free agents. Vaclav Prospal, Jason Smith, Jaroslav Modry and Jim Dowd fall into that category and if speculation in the Philadelphia media is anything to go by, Holmgren will cut those players loose and focus on re-signing his younger talent.
But not retaining his impending UFAs won’t solve Holmgren’s cap problem; he’s going to have to consider other options.
more… plus a look at the Dallas Stars
From Marty Henwood at Hockey.com,
So, humor me again, if you will. What, exactly, was the NHL lockout for?
Because, my friends, we are on the express route to another work stoppage.
According to reports, the NHL salary cap will rise once again next season.
Alarm bells, anyone?
From John Glennon at the Tennessean,
Said Dumont: “The contract stuff is not really in my hands. We would definitely like to stay here, but we’ll see. If it happens, it happens. Hopefully it will.’‘
The only question regarding a re-signing of Dumont would be money. The Predators already have some relatively large salaries on the books for next season — Jason Arnott ($4.5 million), Legwand ($4.5 million), Steve Sullivan ($3.2 million), Marek Zidlicky ($3.2 million) and Chris Mason ($3 million).
Assuming Poile still plans to re-sign the key restricted free agents, will Dumont’s next salary fit the budget? Dumont is paid $2.5 million, but after posting a career-best 66 points last season and assuming he stays on course for 60 points this season, he’ll be due more money in the future.
*Nashville’s current salary cap situation.
from On the Islanders Beat,
Because salaries are pro-rated against the cap on a daily basis, when they reach the mid-point of the season, the Islanders will have the ability to take on players whose contracts total up to $15 million at that point because half their salaries already will have been paid. So, cap room isn’t a problem.
But since the NHL isn’t a fantasy league, the trouble is finding someone who is ready to give up a goal scorer. That’s not likely to happen much before the Feb. 26 trade deadline. At a time when the Islanders have gone 12 straight games without scoring more than two goals (not counting the shootout goal against Ottawa), that’s why they must look within for help.
from the CP,
Gillett said that despite the rising value of the loonie, the NHL’s salary cap will keep the team’s payroll in check.
But a stronger dollar allows the hockey club to spend aggressively and continue to build with younger players and supplement with free agents.
“No matter what happens with the exchange rate, up or down, we’re going to spend aggressively toward the cap,” he said.