The NHL held a board of governors meeting in New York on Tuesday, which usually brings some interesting news. One of the most pressing topics this week was the salary cap and when it might increase. And, after the reunion, Gary Bettman shared some potentially huge news with the media.
A possible $4 million salary cap increase this summer? What?!?
Let’s step back for a minute. For those still catching up on NHL finances, COVID has essentially led to the NHL borrowing from a receiver to cover bills when fans weren’t allowed to be seated and games were on. cancelled. The biggest chunk of those bills were player salaries – players collectively received well over their collectively bargained 50% of hockey-related revenue (HRR) due to the pandemic, and so fell into debt with owners .
So over the next couple of years – even as new television offerings in the US and Canada were introduced and the league brought in new sponsors – the cap remained relatively stable. This season, the cap increased by $1 million to $82.5 million, which was a good thing.
In early July, Bettman said, “The power play” show on the Sirius/XM network of the NHL that the ceiling was going to remain relatively stable for the next two years. At that time, Bettman believed that the cap could begin to rise more quickly in 2025. This goal was consistent with what NHL Players’ Association Executive Director Donald Fehr told Elliotte Friedman for SportsNet in April.
A slow rise would actually help teams like the Blackhawks who have relatively low salary commitments for the next 2-3 years. As we’ve discussed at length here, the Blackhawks haven’t had a single forward on their NHL roster under contract for more than two years; by the summer of 2024, the entire attacking group will either be gone or need a new contract.
This news from Bettman that revenue has increased dramatically and rapidly that the cap could (again, could) increase by $4 million for next season is huge.
In a way, that could hurt the Blackhawks’ rebuild. If teams don’t need to dump salary due to another year of slow cap growth, the Hawks’ cap space is used to bring in additional assets (see Dickinson, Jason).
However, when NHL Deputy Commissioner Bill Daly shared cap numbers at the end of September, I wrote that the Blackhawks would potentially have an absurd amount of cap space to play with as early as 2024. Based on numbers released by Daly less than a month a few years ago, a supposed increase of $4-5 million in 2024-25 would be followed by another significant increase to $92 million – a figure $9.5 million above the current season’s salary cap.
But this new revelation from Bettman could take a full year off those estimates and push that $92 million figure into the 2024-25 season. And, again, as I wrote at the end of September, the Blackhawks have three NHL contracts carrying a combined cap of $17.9 million on the books for this season.
So, let’s get back to those calculators…
If the salary cap increases by a potential $4 million next year to $86.5 million, and (according to CapFriendly) the Blackhawks have about $45-46 million in salaries on their current payroll, carried over to next season (including some orders like Lucas Reichel, Alex Vlasic and eventually Isaac Phillips), that would leave general manager Kyle Davidson about $40 million in cap space.
So a big jump in the cap would be a double-edged sword for the Blackhawks. Other teams wouldn’t need to dump their salaries, limiting the Blackhawks’ ability to weaponize their cap space. But if the property gives Davidson the go-ahead to spend, Chicago could have a crazy amount of cash on hand.
Again, there’s still a chance the cap will only increase by $1 million this summer because the escrow debt isn’t fully repaid. But if Bettman is willing to lay that out in front of a microphone — considering how financially prudent he’s been in the past — there’s got to be a good chance it will actually happen.