NEWSLETTER
The NHL had a Board of Governors meeting in New York on Tuesday, which usually brings a few interesting news nuggets. One of the pressing items this week was the salary cap and how soon it could go up. And, after the meeting, Gary Bettman shared some potentially enormous news with the media.
A possible $4 million increase in the salary cap this coming summer? What?!?
Let’s walk this back for a minute. For those still catching up in the finances in the NHL, COVID basically led to the NHL borrowing from escrow to cover its bills when fans weren’t allowed in seats and games were cancelled. The biggest part of those bills was player salaries — the players collectively received well above their collectively bargained 50 percent of hockey-related revenue (HRR) because of the pandemic, and thus went into debt to the owners.
So, for the next couple years — even as new television deals in the United States and Canada were introduced and the league brought on new sponsors — the cap has stayed relatively flat. This season, the ceiling went up $1 million to $82.5 million, which was a good thing.
Back in early July, Bettman told “The Power Play” show on the NHL’s Sirius/XM network that the cap was going to stay relatively flat for the next couple years. At that time, Bettman estimated the cap might start going back up more rapidly in 2025. That target was in line with what NHL Players’ Association Executive Director Donald Fehr told Elliotte Friedman for SportsNet in April.
A slow climb would actually help teams like the Blackhawks that have relatively low salary commitments for the next 2-3 years. As we’ve discussed here at length, the Blackhawks do not have a single forward on their NHL roster under contract for more than two more years; by the summer of 2024, the entire forward group will either be gone or need a new contract.
This news from Bettman that revenues have increased to dramatically and quickly that the cap could (again, could) go up $4 million for next season is enormous.
In a way, it could hurt the Blackhawks’ rebuild. If teams don’t need to dump salary because of one more year of slow cap growth, the Hawks’ cap space being used to bring in additional assets (see Dickinson, Jason).
However, when NHL Deputy Commissioner Bill Daly shared some cap figures at the end of September, I wrote about the Blackhawks potentially having an absurd amount of cap space to play with as soon as 2024. Based on the numbers circulated by Daly less than one month ago, an assumed $4-5 million increase in 2024-25 would be followed by another significant increase to $92 million — a number that’s $9.5 million more than the salary cap in the current season.
But this new revelation from Bettman could remove one full year from those estimates, and push that $92 million number up to the 2024-25 season. And, again, as I wrote at the end of September, the Blackhawks have three NHL contracts carrying a combined cap hit of $17.9 million on the books for that season.
So, let’s get those calculators out again…
If the salary cap goes up by the potential $4 million next year to $86.5 million, and (according to CapFriendly) the Blackhawks have around $45-46 million in salaries on their current payroll rolling over to next season (including some call-ups like Lukas Reichel, Alex Vlasic and possibly Isaak Phillips), that would leave general manager Kyle Davidson with around $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 salary, thus limiting the Blackhawks’ ability to weaponize their cap space. But if ownership gives Davidson the green light to spend, Chicago could have an outlandish amount of money available.
Again, there’s still a chance the cap only goes up $1 million this summer because the escrow debt isn’t paid off in full. But if Bettman is willing to put this out there in front of a microphone — when we consider how fiscally conservative he’s been in the past — there has to be a strong chance of it actually happening.
