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The cap will officially hit $64 million as PA agrees to apply 5% inflator

Great news for teams that spend to the cap, via the Canadian Press:

The NHL Players’ Association has decided to trigger the growth factor in the salary cap for next season, pushing the upper limit to roughly $64 million US.

A source told The Canadian Press that the union’s executive board voted via conference call Monday to have five per cent added to the calculation of next year’s salary cap — a decision it gets to make each spring to account for inflation. The NHLPA has chosen to have the five per cent added every year but one since it was brought into existence.

The official number for next year’s salary cap is expected to be announced this week.

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cs6687's avatar

This is one issue the owners have to address in the next CBA. It has to be eliminated. I don’t know of any union that has the option of voting itself a raise, much less in every year. This is the main reason for the cap increase this year, not an increase in revenues. This trigger is causing the haves and have-nots to grow, and causing franchises like Florida and the Islanders to spend at levels they can’t afford. It’s not good for competitive balance. It’s not good for franchise profitability and viability. It’s not good for the game.

Posted by cs6687 on 06/20/11 at 10:50 PM ET

George Malik's avatar

According to Bill Daly a few weeks ago, the NHL’s revenues increased to $3 billion this past year, and it’s the NHL and its 30 governors that decided to lock out the league’s players and fans for an entire season to wrestle a hard salary cap linked to league-wide revenues.

They agreed to the inflator because the league never thought its business would grow as it has—and it was Bettman who wanted a $15 million-narrow payroll range.

I have no doubt that the PA would not have a problem with dropping the floor to $20 or $25 million less than the ceiling—it would all but eliminate escrow withholdings and it would help franchises that are spending more than what they bring in…

But this is the NHL’s dream CBA, a CBA that was written in large part by Bill Daly and a very NHL-friendly Ted Saskin who acquiesced to just about everything the league wanted him to give, so it’s the NHL’s problem, not the PA’s, and if they dare suggest that it’s the players’ fault that their own dream CBA isn’t working out, well…

The league can’t lie to us and claim that locking out the players will solve all its problems and stop ticket prices from increasing irrespective of teams’ salary commitments or on-ice performances.

The big-market teams have no problems with the big cap, either, because they’re still making money thanks to the fact that the cap’s taking a smaller percentage of their revenues away than salaries did prior to the lockout, so the owners aren’t united on this front.

Posted by George Malik from South Lyon, MI on 06/20/11 at 11:02 PM ET

Moq's avatar

This is the main reason for the cap increase this year, not an increase in revenues.

That’s not entirely true. The inflator was used last year, the year before that, and most - if not all - seasons after the lockout. Therefore the increase in salary cap reflects a real increase in revenue over the years. That being said, I don’t think it’s a necessary inflator unless we see a dramatic dip in revenue. Then a certain limited percentage increase would help soften the blow.

The bigger problem is salary cap range as explained by George. I would prefer a percentage dependence between ceiling and floor, or even a CBA stipulated floor, rather than a fixed range. Perhaps 60 percent of the ceiling would be realistic as minimum payroll.

All in all, the result wasn’t that bad for a first hard salary cap CBA. The question is if the NHL and PA can agree on amending the various shortcomings, and produce a better second edition.

Posted by Moq from Denmark on 06/21/11 at 07:36 AM ET

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The Malik Report is a destination for all things Red Wings-related. I offer biased, perhaps unprofessional-at-times and verbose coverage of my favorite team, their prospects and developmental affiliates. I've joined the Kukla's Korner family with five years of blogging under my belt, and I hope you'll find almost everything you need to follow your Red Wings at a place where all opinions are created equal and we're all friends, talking about hockey and the team we love to follow.