NHL Salary Cap Could Be Lower Than Projected.

Earlier this season the NHL projected the salary cap could rise to as much as $71.1 million for 2014-15. The cap minimum was projected to rise to $52 million. This was good news for a number of NHL teams hampered by this season’s artificially-lowered cap ceiling of $64.3 million.

With the salary cap expected to jump by $6.8 million, there was anticipation this coming summer would be a very busy one for trades and free agent signings. Teams which traditionally spent to the ceiling would have more money to spend in re-signing key players and adding new talent, while clubs which usually hug the cap floor would be forced to spend more.

In the wake of the 2014 NHL trade deadline, however, a report in the Los Angeles Times claims the cap might not rise as high as expected after all.

NHL GMs won't have as much of this to spend next season as they originally thought.

NHL GMs won’t have as much of this to spend next season as they originally thought.

 Times reporter Helene Elliott reports LA Kings GM Dean Lombardi claimed next season’s salary cap would be substantially lower, perhaps coming in around $68 million. He said this was due to the recent weakness in the Canadian dollar, adding it could be verified through the league.

For Lombardi’s Kings, that will create a significant problem heading into the off-season. With a cap ceiling of $71.1 million, CapGeek.com indicates they have over $14.6 million in projected cap space for next season. That would provide Lombardi with ample space to re-sign or replace his five pending free agents (Marian Gaborik, Trevor Lewis, Dwight King, Willie Mitchell and Matt Greene), plus leave sufficient room for additions as required throughout next season. A cap ceiling of $68 million leaves them with $11.5 million in cap room. As Lombardi stated, that reduction of $3.1 million could affect his efforts to re-sign most of his key players.

The Kings aren’t the only club which could be adversely affected by this reduction.

The Boston Bruins currently have a projected $9.12 million in cap space to re-sign or replace Jarome Iginla, Shawn Thornton, Reilly Smith, Andrej Meszaros, Torey Krug, Chad Johnson and Matt Bartkowski. With Marc Savard on permanent LTIR, that jumps to over $13 million. However, with a cap of $68 million, they’ll have only a little over $10 million of available space.

The Philadelphia Flyers currently have a projected $12.6 million in cap space. They must re-sign or replace Brayden Schenn. Kimmo Timonen, Andrew MacDonald, Steve Downie, Ray Emery, and Erik Gustafsson. With Chris Pronger on permanent LTIR they get over $4.9 million in cap relief, giving them around $17.5 million to invest. However, a $68 million cap reduces that to around $14.4 million.

Among the notable the San Jose Sharks must re-sign or replace are Dan Boyle, Jason Demers, Tommy Wingels and Alex Stalock. They currently have a projected $12.3 million in cap space for next season. With a $68 million cap, that drops to $9.2 million.

Not only will a $68 million cap affect free agent signings, it could also have an effect upon this summer’s trade market. Granted, an increase by $4 million over the current $64.3 ceiling, combined with retained salary transactions, should lead to increased trade activity compared to last summer. Still, a $71.1 million cap ceiling would prompt more player movement, enticing some general managers to take bigger risks for high-salaried stars.

This is good news for traditional low-spending teams like the New York Islanders and Florida Panthers. If the cap ceiling doesn’t go up as much, neither will the cap floor, meaning they won’t have to spend as much to become cap compliant.

This also demonstrates how much influence the Canadian dollar has upon NHL revenue. This season saw several successful stadium series, an increase in season-ticket sales and improved television ratings for the NHL. The seven Canadian teams (which are assumed to account for between 35-40 percent of league revenue) are still doing well at the gate, especially in Toronto and Montreal. Despite these successes, the drop in the value of the “loonie” will have significant consequences upon NHL coffers.

2 Comments

  1. Hey Lyle,

    Do you think, given the impact of changes in the Canadian dollar, this hurts efforts to land new teams in Canadien markets? If you want to play ‘conservative’ with your expension, placing a team where the gate maya be better, but a sudden currency fluctuation has that much of an impact may not be appealing to owners.

    • Agreed. I don’t think it’ll prevent further expansion into Canada (particularly the lucrative Toronto market, which could easily sustain a second NHL franchise), but it could certainly slow the process if the “loonie” should further decline and remain well under par with the American dollar for a prolonged period.