Will the Salary Cap Continue to Rise?
There has been much discussion recently about the NHL preferring to keep a team out of Hamilton, in part because the massive revenues such a team would bring in would drive both the maximum and minimum salary caps up, making life harder for basically all of Gary Bettman’s expansion era teams.
This question is really important not only in consideration of how long the NHL can continue on its present course but also when determining just how smart teams signing players to lengthy contracts ala Briere’s 7 year monster are concerned.
Long contracts handed out to players coming off of career years typically benefit the player over the team. The New York Rangers give Chris Drury a long contract based on his production from last year despite the fact that he may never repeat and will almost certainly not surpass his goal and point totals (he’s not getting any younger). With the salary cap, this sort of contract would initially seem particularly damaging, since Drury’s contract does more than merely cost the Rangers franchise money - it restricts what other players they can sign or acquire.
There is, however, another issue. The salary cap has risen every single year since it was introduced. If it continues to rise, the long term contracts can in fact benefit the team because every year, the salary cap hit, though a constant figure, takes up a lower percentage of the team’s available salary.
Look at the Tampa Bay Lightning, built around the trio of Brad Richards, Vincent Lecavalier and Marty St. Louis. Those three eat up a combined $19.925 million per season of the salary cap. A few years ago, that was a cool 51% of the $39 million salary cap. With the salary cap rising to over $50 million this season, however, Tampa Bay has 60% of the salary cap remaining to surround its core trio with. A substantial and welcome change.
There is, however, a problem. The salary cap is far from guaranteed to rise - in fact, if Bettman has his way and the NHL expands and/or relocates to the Kansas City’s and the Las Vegas’ rather than the Hamilton’s of the world, the cap will in all likelihood begin shrinking sooner rather than later. That’s bad, bad, bad news for teams signing players to 5, 6, 7 year contracts because most of these players are signed in their early 30’s. When these contracts expire, they’re going to be less productive than they are today.
Bryan McCabe’s monster $5.75 million per year seemed disastrous when signed, frightening after his disappointing first year as a (by salary if not play) top-10 defenceman, but merely unreasonable now that it can be contrasted with the contracts signed by Sheldon Souray, Roman Hamrlik and even contracts signed at the same time as McCabe’s like Wade Redden or Zdeno Chara. This is not to say that McCabe has played or will likely play like a $6 million defenceman, or that any of those other players are more overpaid - I will leave that distinction up to the reader - but merely to point out that McCabe’s contract is starting to look average after only a single season.
If - and this is a big IF - the salary cap continues to rise, the long term contracts of players like McCabe, Briere, Gomez and others continue to look better and better. But the current CBA is going to expire before most of these contracts - perhaps as early as the summer before the 2009 season. Owners signing off of these contracts may want to start thinking about how the NHL will look after the current CBA expires. Lear the lessons of the New York Islanders, who will be paying for their costly mistake in signing Alexei Yashin to his monstrous deal for years to come, while Yashin plays in Russia or even another NHL team (haha).
September 19th, 2007 at 11:11 am
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