BOCA RATON, Fla. - Whether or not the NHL's salary cap rises much, if at all, for next season rests in the hands of the NHL Players' Association.
NHL general managers were given a $74 million projection on Wednesday as their three-day meeting wrapped up in South Florida, but that number operates on the assumption that NHLPA will opt to use its inflator clause, which they have traditionally done since 2006.
Without that, next season's salary cap would remain flat at $71.4 million, NHL deputy commissioner Bill Daly said.
"You're looking, probably, at the high-end, approximately a $74-million cap with a basic inflator and without you're looking at a flat cap," Daly said. "Our practice with Players' Association really has been over the last couple years to try to sit down and talk about a reasonable projection for revenue growth and build in that inflator. So that's what I'd say: It's somewhere probably between the current cap and $74 million."
Even though the NHLPA has voted to use the inflator every June save one, it is far from a guarantee this summer. That's because escrow is the dirtiest word in NHL locker rooms.
This year, every NHL player will have approximately 16 per cent of his salary withheld to ensure a proper 50-50 revenue split with owners. The players will likely only receive a portion of that back, with owners keeping an average of 5.75 per cent per season since 2009.
For 2012-13 and 2013-14, players were ultimately paid just 87.5 per cent of their published salaries.
Players have grumbled about escrow for years. The only way for the NHLPA to guarantee a decrease in the amount of escrow taken is to hold the salary cap upper limit down and not use the inflator, reducing the overall revenue projection.
The concern for the NHLPA and its general membership is that while a decrease in escrow would be a big win, it might come at the cost of jobs for 30 or more union members. It is a cost-benefit analysis for a union serving 750 members of all different salary classes.
"The players will consider the matter over the next two or three months," NHLPA spokesman Jonathan Weatherdon said in an email Thursday. "Obviously, the continuing high escrow is one significant factor which the players will weigh in making their decision."
There are pros and cons to using the inflator for both teams and players.
Cap-strapped teams like the Blackhawks, Kings, Lightning, Blues and Rangers would love for the NHLPA to use the inflator. It means almost $3 million more to spend this summer.
Competitive teams with cap flexibility, such as Stars, Ducks, Panthers and Sharks, are rooting for the cap to stay flat. That would mean cap-strapped teams will have to make tough decisions and may have to trade key players in order to keep everyone.
Similarly, middle-class free agents are banking on the inflator so teams have salary-cap space to spend on July 1. The inflator likely wouldn't affect a potential marquee free agent such as Steven Stamkos because any interested team will make room to sign him if they don't have it already. Lower level free agents are caught in the middle: the inflator allows for more jobs generally, but a flat cap will also create a need for inexpensive specialists on top teams.
Using the inflator means the NHLPA would be banking on the NHL to match this season's entire take from revenue and also generate approximately $150 million (U.S.) more in new revenue streams in order to make a $74-million cap work. Some of the new revenue the NHL has generated this season, for instance, has been eaten by the decline of the Canadian dollar. Revenue from the joint 2016 World Cup of Hockey will not count as hockey-related revenue.
Another option, of course, is to compromise with a partial inflator to split the difference.
NHL commissioner Gary Bettman said it would be "too premature" to have that discussion with the NHLPA. That will occur in June, before the Draft in Buffalo.
"You know, if we've been doing it one way all along, you've got to take into account the number of free agents coming to the market," Bettman said Wednesday. "The Players' Association is going to have to focus on that with them."
For now, with the salary cap still in limbo, most GMs are playing it conservative.
"That's the way I've always operated, though," Blackhawks GM Stan Bowman said. "Even going back four or five years ago, people always made predictions, but for me it's easier for a plan to not change. Having more cap space is something I can always deal with. If you're assuming it's going to go up and it doesn't then you put yourself in a tougher spot."
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