NHLPA voting on $75 million salary cap. UPD: cap will go to $75 million next season

[getbak]

Originally Posted by Locke

No it isnt.

The escalator is literally taking that mathematical formula and artificially altering it.

"We didnt generate enough revenue to warrant raising the salary cap."

PA: "Okay, but we're going to exercise our escalator clause and raise the cap anyways."

No. That is not how it works.

The escalator takes the actual HRR from the previous season and assumes that revenues will grow by 5% (because historically, they do) and sets the following season's cap based on that projected growth.

[mrkajz44]

Originally Posted by getbak

No. That is not how it works.

The escalator takes the actual HRR from the previous season and assumes that revenues will grow by 5% (because historically, they do) and sets the following season's cap based on that projected growth.

Huh - I looked it up in the CBA (Section 50.5 (b)) and getback is right. There is a mathematical formula for which the escalator is applied. So the players applying the escalator is simply them saying they think HRR will grow by 5% over the prior year, which is actually pretty reasonable.

Today I learned...

[Locke]

Originally Posted by mrkajz44

Huh - I looked it up in the CBA (Section 50.5 (b)) and getback is right. There is a mathematical formula for which the escalator is applied. So the players applying the escalator is simply them saying they think HRR will grow by 5% over the prior year, which is actually pretty reasonable.

Today I learned...

Me too. Fair enough.

[Roof-Daddy]

So if they vote against it what happens?

It stays at $73 million?

[FBI]

Moral of the story: getbak is never wrong.

[sureLoss]

Originally Posted by Roof-Daddy

So if they vote against it what happens?

It stays at $73 million?

Then the NHLPA will go back to internal discussions what the escalator (if any) should be.

They technically don't have to submit their vote until June 30, but the NHL is requesting they make their decision early for expansion draft purposes.

[simonsays]

I'm still a little agog that they decided to go with projected HRR with an escalator clause to begin with. Coming out of the 04/05 lockout the NHL basically handed the PA a number and said that if revenues are increased we'll return the difference. But that should have been it, every year hence should have been based on the previous years HRR. No escrow, no escalator, just 'this is what we made last year and you get x% of that next year'. The wages would be 12 months behind but the confusion would have been gone.

Makes you wonder though how league min guys are affected. Does everyone pay into escrow or is it only what you earn over the minimum salary?

[iggy_oi]

Originally Posted by simonsays

I'm still a little agog that they decided to go with projected HRR with an escalator clause to begin with. Coming out of the 04/05 lockout the NHL basically handed the PA a number and said that if revenues are increased we'll return the difference. But that should have been it, every year hence should have been based on the previous years HRR. No escrow, no escalator, just 'this is what we made last year and you get x% of that next year'. The wages would be 12 months behind but the confusion would have been gone.

Makes you wonder though how league min guys are affected. Does everyone pay into escrow or is it only what you earn over the minimum salary?

The revenue is supposed to be split between players and owners for each season, so I'm guessing the issue the players would have with the increase being delayed for a season would be that a player who doesn't get contracts for the following season would lose that increase they helped the league earn, and for a player signing a long term deal that offseason an extra 5% in cap space can make a huge difference that they would not be able to make up for if it is added a year after they sign. That's my assumption of how the players would view this. Obviously an argument could be made(and likely has been by the league during bargaining) that since teams are not required to spend to the cap players who don't get new contracts weren't guaranteed that extra money to begin with.

[MarkGio]

I really hope the escalator isn't exercised. I think the Flames could survive it, whereas many teams would feel the squeeze. That would benefit the Flames.

[Enoch Root]

The escalator isn't the real problem, it just takes the blame.

The real problem is that the majority of teams spend to the cap. And the system assumes that teams will, on average, spend to the mid-point.

Let's say (half of) last year's HRR is $2.85B and there are 30 teams. Mid-point would then be $95M. Then they apply the escalator of 5% and the mid-point becomes $100M. Then the cap and floor would be roughly $115M and $85M respectively.

Now, two things can happen:

1) League revenues don't grow by 5% to reach the $100M, but only grow by 3%, forcing escrow to withhold 2% of salaries. This is only a small problem, and revenues have tended to grow close to the escalator rate.

2) Teams spend more than the mid-point, on average. If, instead of averaging $100M in payroll, teams average $110M (because most teams spend to the cap, not to the mid-point, the players are, in aggregate, overpaid by 10%. In this case, escrow withholds 10% of everyone's salary. In fact, this has been what most of the holdback has been from.

(Note: the withholding of escrow actually happens when they are paid throughout the season, and then everything gets adjusted at the end of the year when all the numbers are known and the escrow is either permanently withheld, or is returned to the players, depending on where the numbers fall).

[sureLoss]

Elliotte Friedman @FriedgeHNIC
Cap range will go from $55.4M to a ceiling of $75M for next season

which means once you factor in the bonus overage for this season, the Flames have less than 19 million in cap space.

of course if Vegas takes a roster player from the Flames that number will go up.

[Oil Stain]

Originally Posted by sureLoss

Elliotte Friedman @FriedgeHNIC
Cap range will go from $55.4M to a ceiling of $75M for next season

which means once you factor in the bonus overage for this season, the Flames have less than 19 million in cap space.

of course if Vegas takes a roster player from the Flames that number will go up.

19 Million is actually quite a lot of room. Flames are sitting pretty nicely in regards to the cap this year.

It's a poor free agent crop though. I wonder how hard Treliving will work trades to utilize that cap space.

[Roof-Daddy]

Flames cap situation is pretty darn good, even with the highly expensive 4th line of Bouma, Stajan and Brouwer to finish last season.

It gets even better if Vegas takes one of those three.

[Fire]

Originally Posted by Oil Stain

19 Million is actually quite a lot of room. Flames are sitting pretty nicely in regards to the cap this year.

It's a poor free agent crop though. I wonder how hard Treliving will work trades to utilize that cap space.

Michael Stone or similar $4 million/yr
3rd pairing UFA D-man $2 miilion/yr
Andersson/Kulak/Wotherspoon 800k/yr

Lazar $1 million/yr
Bennett $2.5 million/yr
Ferland $2 million/yr
Jankowski $925k/yr

Backup Goalie $1.5-$2 million/yr

That will take about $15 million of the remaining cap space.

[Strange Brew]

Originally Posted by Fire

Michael Stone or similar $4 million/yr
3rd pairing UFA D-man $2 miilion/yr
Andersson/Kulak/Wotherspoon 800k/yr

Lazar $1 million/yr
Bennett $2.5 million/yr
Ferland $2 million/yr
Jankowski $925k/yr

Backup Goalie $1.5-$2 million/yr

That will take about $15 million of the remaining cap space.

I believe that's pretty accurate. Maybe somebody gets a little more than you are suggesting.

[TheScorpion]

So, the cap is 75 million?

Here's how I see next season shaping up:

https://capfriendly.com/armchair-gm/team/361261

[Rick M.]

Originally Posted by TheScorpion

So, the cap is 75 million?

Here's how I see next season shaping up:

https://capfriendly.com/armchair-gm/team/361261

No Janko?

[N26]

Originally Posted by TheScorpion

So, the cap is 75 million?

Here's how I see next season shaping up:

https://capfriendly.com/armchair-gm/team/361261

I don't think you'll get Del Zotto that cheap. Shouldn't pay Stone that much and that Marleau contract is for 2010 Marleau.