Kukla's Korner

Category: Salary-Cap

Salary cap discussion

Looking Ahead—Far Ahead

Now we know how the rosters are going to look from here until the Stanley Cup is awarded…but what about after that? After all, only one team really gets to claim a successful season. Then it’s all about making trades at the draft and buying up free agents to re-shape your roster. Here’s a list of each team’s current cap hit for next year.

Keep in mind that the cap will apparently be staying very close to where it is now as a lot of this year’s revenues have already been accounted for (2010-11 is when the cap should drop assuming fans have less money to buy tickets in a poor economy). All numbers courtesy of NHL Numbers (check them out if you want to see how many holes your team will need to fill come July 1).

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Filed in: Salary Cap, | Mike Chen's Hockey Blog | Permalink

What Can GMs Do With Lifetime Deals?

Another day, another monster long-term deal. This time, the deal keeps Henrik Zetterberg in Detroit until Miley Cyrus is in her late 20s. Yes, it’s that long, and it’s very similar to the deal that Tampa Bay gave Vincent Lecavalier.

It boggles my mind that teams would give any player that term if they’re over the age of 25. Even for players under that age (like the Mike Richards deal), it’s still a difficult number to accept but it makes a little more sense—you’d rather have the contract (and cap hit) run out when the guy is 35, not 40.

But it’s not all set in stone. The NHL CBA is a dense document filled with clauses and loopholes and all sorts of legal verbiage that will make your head spin. Inside the 100+ pages of legal mumbo jumbo, GMs have a few options for dealing with the end of a long-term deal. They’re not necessarily pretty, and the “fairness” of the whole thing can depend on how good the player actually is towards the end of his career. Here’s what they can do:

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Filed in: Salary Cap, | Mike Chen's Hockey Blog | Permalink
  Tags: henrik+zetterberg, mike+richards, vincent+lecavalier

The Economy, The Cap, & Some Guy Named Vinny

Most economists are predicting that the current recession, which we’ve been in for more than a year, will start to see some recovery after the second quarter of 2009. If that’s true, and if jobs are created instead of lost and spending is up by consumers, then we’ll have some return to normalcy in about two years—though it’ll be a trickle-down effect, at least when it comes to sports.

(Thank you, two quarters of economics in college.)

Look, I’m no financial expert but I try to stay abreast of big-picture issues enough to know whether things are getting better or worse. And assuming the timeline for getting better fits those predictions, then I think we’ll actually see a two-year span where the salary cap stays around the same area within a $3 million tolerance (most likely in the negative). However, slash-and-burn thoughts of the cap dropping to $40 million overnight are impossible. Think of it this way:

-Revenues for October 2007 to June 2008 pushed the cap to $56.7 million
-The recession began in the last quarter of 2007
-Bettman and co. predict that cap for 09-10 will remain roughly in the same area, if not drop a little bit
-2008’s sales numbers hit record lows
-Some economists say that the worst of recession may be over as 2008 closes, beginning of recovery in second half of 2009

Assuming there’s a bit of a lag effect on the recovery’s effect on the NHL, then we should see the cap for 10-11 go into a similar “same range or slightly worse” prediction as consumer spending should gradually pick up in Q3 2009 and hopefully the holiday season. This type of spending starts with necessities, then trickles into the entertainment dollar.

My point with all this—and yes, there is one—centers around one Vincent Lecavalier, he of the non-stop trade rumors and monster salary.

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Filed in: Salary Cap, | Mike Chen's Hockey Blog | Permalink
  Tags: vincent+lecavalier

2008’s Biggest Story

I’m back from a week of non-stop holiday stress interspersed with a few hours of catching up with friends and family. Here’s a lesson I learned this year—if you’re already pressed for time due to various commitments, making two time-intensive holiday gifts is a bad idea. Only one per year from now on.

In any case, I always find year-end stuff to be a little awkward because hockey season is split into two calendar years. How does one judge what’s the biggest story of the year? Do you go with the Stanley Cup champs and ignore the start of the 08-09 season? Do you select a single incident like Sean Avery’s potty mouth? How about an ongoing fiasco like the ridiculous shenanigans happening in Tampa Bay?

No to each of those, I say. I think the biggest hockey story of 2008 is also the biggest global story of the year (no, not Sean Avery).

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Filed in: Salary Cap, | Mike Chen's Hockey Blog | Permalink
  Tags: 2008, attendance, business, economy

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