Quote:
Originally Posted by powderjunkie
Will be a good year to sign a big first year salary contract for FAs.
Does anyone know what the actual HRR number ends up being each year? Curious how far out of whack the cap is with reality...
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You can do the math using the next season's cap and the amount of escalator that was used to determine what the previous season's HRR was (generally speaking, there are some things taken off the HRR calculation to pay for player benefits that don't go into the cap calculation). Many people are under the mistaken impression that the escalator increases the cap independently of HRR, but that's not true. The escalator is only used on the previous season's actual year-end HRR (or the best estimate available in mid-June) to try to account for inflation for the following season.
I've said this many times before, but the escrow issue isn't because the cap is out of whack with HRR. The escrow issue is because the whole process for calculating the cap uses bad assumptions about how teams will choose to use the cap.
The cap is calculated using the assumption that the average team payroll will be around the midpoint of the cap and floor. The reality is that every season virtually every team starts the season above the midpoint, and it only goes up from there as players get injured and need to be replaced. More teams start the season above the cap (with LTIR) than below the midpoint.
Right now, for example, the midpoint of the salary range is $70.85 million. That's supposed to be the average team payroll. If you look at Cap Friendly, the lowest team payroll right now is Columbus at $74.15 million. It's hard to have an average of $70.85 million when not a single team is below that number. Also, right now, 11 teams are currently exceeding the cap and using LTIR to be compliant.
Escrow is the mechanism used to bring those two numbers into alignment.
Plus, remember that they basically didn't use the escalator at all for this season's cap. Because of this, assuming HRR grows at its usual rate (which usually exceeds 5%), the cap is actually too low -- but that's by design because the assumptions used in the cap calculations are so out of whack.