What The Offseason Indicates About The Effects of a Rising Cap

[UWSaint]

What follows is a very long post; more article than post or even essay. Something I’ve been thinking about and putting together and revisiting for quite awhile. Not the typical content for a message board, but I read somewhere on this board that this board is extraordinary….

What the offseason indicates about the business and management of NHL Teams

This offseason has been remarkable. More trades than I can remember in years, some counterintuitive. Big time bets in the form of contracts to RFAs like Carlsson (via offer sheet), Byram, and Minty – moves that will forever shift the prices for RFAs because they will factor into market-like influences on RFA contracts (the potential of offer sheets; what an arbitrator’s award would be). Players demanding trades, players indicating they won’t be resigning when their contracts are done, players not committing two years in advance to re-signing, players on upcoming RFAs rejecting 9 figures – all different categories, IMO, wrongly lumped together.

With the exception of the “Team USA most dangerous chat group” developments, which are worthy of another post, I think all of these things are connected to (though not without other contributing factors) the rising cap. A rising cap is more than “more cap space”. And what’s happened suggests the rising cap has some underappreciated counterintuitive effects.

The Cap.

First, its important to have a basic understanding of the cap and what’s going on with it. In brief, the NHL’s cap is hard, an amount that can’t be exceeded, and it is calculated such that the owners and players split revenues 50/50. There’s a whole lot of devil in the details for what constitutes hockey revenue (which I am sure the owners do their best skew in their favor), but that’s for another post.

For many years, the cap was set too high for revenue, and the CBA allowed a portion of player salaries to be paid into escrow so that if the cap was too high, so the owners wouldn’t take the hit. The hit to the players was temporary – future revenues would be used to pay back escrowed funds – but note that what this ultimately created was effectively a debt-service like obligation on current revenues. Remember this; it’s important later. When Covid hit, the ability to escrow was both a lifeline for the league but its excessive use (some years more than 20%) gored the players. Post-Covid, the league and PA would enter an MOU to cap the escrow at 6% of salary.

Covid made everything worse, with gate revenues more or less gone for a season and a quarter, gone from one playoffs, and seriously compromised in the second playoffs. The cap was basically flat from the 2019-20 season and its bubble playoffs to the 2023-24 season, two full seasons of more or less regular life and substantial had returned – all while revenues (like most of the rest of the economy) had its V shaped recovery. Where was all that extra money going if not into the Cap? To pay back retained salary held in escrow. Underline this: the NHL kept setting revenue records as the cap stayed flat.

Once the cap “freeze” was lifted, the salary cap bumps that follow were modest for a couple season – more or less 5% increases, but last year saw a 8.5% increase and this upcoming season’s $104 million cap is nearly 9% greater than last season’s cap. All told, today, its up 24.6% from that flat cap era, in which many of the benchmark salaries were signed during a time of uncertainty.

Observation #1: When people talk about how salaries will increase with a rising cap, I think they mouth the words and don’t do the math. Through what we’ve seen so far – and I’ll argue its only the start, which will factor into the equation – a 25% increase means that your $9 million player signed a few years ago has a $11.2 million salary today. If you are a point a game offensive player and signing a contract this offseason, you should be making $11 million or more on today’s cap. You don’t need to be a superstar. Kevin Fila is enough. More on that below.

But this really is just the start of it. Remember the escrow? Its all paid off. Has been since the January 2025 reconciling of the 2023-24 books – but the effects of not having that debt-service like obligation are just getting realized because “underbudgeted” revenue (think of this as the reverse of escrow) is resolved through increasing the cap. Personally, I think the NHL is trying to artificially manage cap increases, like how a central bank sets interest rates to cool the economy to mitigate inflationary shocks, but you know what? They can’t do that totally. More on this in a second.

Next season’s (’27-’28) projected cap increase is 9.1% -- the highest since the very very early days of the cap – historic increases that were, in part illusory because they were partly “funded” by escrow. But this current increase isn’t based on illusory revenue, and it might even be mitigated, based on a “central bank” dampened increase. But unlike the Fed or the Canadian equivalent, owners’ ability to “slow” cap growth is limited by their obligations under the CBA – and how they can fudge those obligations in a gentlemanly enough way for the players to take their contracted share over time and not strike and not sue. Labor peace is easier when everyone’s rolling in it.

But at some point, fair is fair and the players get their share. Guess what happened after last season? Every player made 5.5% more than you think they did. Because revenues exceeded the budgeted cap amount by about $340 million, and half of that went to the players. Think Scooter was overpaid last year, real salary $11M (11.6 is the AAV)? Guess what. He got another 600K+ no one considers. Because the “escrow” has become a “bonus”; every player received a check for 5.5% of their salary on top of their salary. Put differently, the cap increased 8.5% last season but should have increased by 14% based on the revenues. Think about that – the 9% increase this season is actually only a 3.5% increase over what players actually made. That's just inflation adjusted, but the league is experiencing real growth....

And here’s the thing – there’s a huge incentive to keep the cap as low as manageably possible at this point. A commonly held misconception is that the players want the cap to increase – the NHLPA doesn’t really want a maximum increase. I think that the past experience of 20% escrow (negotiated to a maximum of 6% -- which the NHL didn’t take last year IIRC because they knew full well the cap was set too low) taught the NHLPA that its members prefer bonuses to escrow. And since all trade associations have a tendency to benefit (1) experienced workers over new workers and (2) new workers over future workers, the association likely prefers a cap set a little bit too low. Because that means its existing players – the ones voted to be on the board – will make more scratch. A guy with a long-term deal on a $5M salary will make a couple/few hundred thousand more in real cash (you don’t spend AAV…..) if the cap is set as it was last season – far too low. If the cap is properly set, guess what? They only make $5 million, and if there’s any loss of revenue, its escrow again.

Prediction #1: There's gonna be another "rebate" this year, and its gonna be big.

Prediction #2: The projected increases the NHL has put out there are conservative – that’s where the Cap will be if they can get away with it given the incentives of the NHLPA to be content with a “too low” cap (and given there’s a hell of a lot more money being made than you think). But don’t be surprised if either (1) the percentage of cap increase is larger or (2) the cap’s lag to true 50/50 revenue sharing means that a 9% cap increase can be safely projected to occur each year over the time horizon that players are currently getting signed to. Over 5 years, that’s a 53.9% increase. Over 7? 82.8%.

The league’s economic health.

And there are so many signs of league health. Broadcast rights have never been more lucrative, and sports generally are becoming a greater and greater proportional source of revenue for broadcast/streaming. American interest in the sport has never been higher – the southern strategy paid off, and the Olympic gold is a cherry on top. This has led to the revenue no one considered last season when the true players share was equivalent to a $100.7M cap and salaries were being set on a $95.5M cap. The future? Prices (for viewing and attending) continue to go up, and I don’t think its exceeded demand (maybe in Vancouver where the team is bad, but not leaguewide).

And maybe the most “objective” sign of league health is franchise values. To be sure, there’s a lot of play in evaluating privately held companies (whose sales are further governed by other owners….), but there are some objective measures and some evaluators who have been applying a pretty consistent methodology (Forbes). Seattle’s franchise fee was $650 million in April 2021. Today, the NHL is looking for $2billion – a 200% increase in time the cap’s increased by 25%.

And the thing is, that kind of increase in franchise value is happening everywhere, not just franchise fees. Prepandemic 2019 Forbes evaluation of the Canucks? $740 million. Today? $2.15 billion. Maple leaves moved from $1.5 billion to $4.4 billion. And on and on and on. We are looking at nearly 200% increases in team valuations in the time it took for Connor McDavid to play through his first 8 year post-ELC deal – and then take the same salary. Sources: https://dailyhive.com/vancouver/nhl-tea ... orbes-2019
http://en.wikipedia.org/wiki/Forbes_lis ... _NHL_teams

And you know, those franchise values have been moving up and up as long as I’ve followed the sport. During the 2004-2005 lockout, I posted quite a bit against the hard cap because equity values were increasing so much, and who really cares about profits (equivalent to dividends) when your asset value is annually increasing way more than your operating losses? To me, the owners were like an investor in Amazon complaining about the lack of dividends while the price of the stock was up 100 fold from the IPO.

Anyway, all this financial health should bust a commonly held myth…

Myth #1: With the cap going up so much, far fewer teams will be spending to the Cap.

Far fewer teams? Nope. Why? First, leaguewide revenue is at least increasing in an amount that supports AT LEAST the cap. This is not only baked into the 50/50 CBA design, but now operating revenue is not getting diverted to escrow payments. Plus, expansion fees are NOT revenue, the owners are expecting another $62,500,000 windfall each for one expansion (well, less transaction costs).

If you look at the team valuations, the poor are also getting richer – in other words, there hasn’t been a meaningful change in the distribution of franchise values – there’s a rising tide phenomenon at work. While valuations are not perfectly correlated with revenue, there is a correlation, and while there will always be teams at the bottom, there’s not a change to the rich-poor dynamic that’s dominated the league the last 10 years, a dynamic that had most teams spending to the cap. And of course, there’s no longer a debt-plagued franchise in Phoenix.

And now we can move out from the theory and logic and look at what’s happened in the offseason. To be sure, 7 teams have $10M in cap space of this writing. But they are rebuilding (Vancouver, Calgary), have *tried* to throw big change at players and can’t get them to bite (Seattle and Columbus each expressed interest in Robertson, IIRC; Philly with Carlsson), thus demonstrating the willingness to spend. There are still some potentiall pricy RFA’s in that mix necessitating a gap (Fantelli; Edvinsson) Others surely *would* spend to the Cap if the right player was there, but have disciplined front offices and won’t spend money because they have it; it has to be part of a plan (Pittsburgh). And honestly, I think there’s a fair chance Seattle, Detroit, and Columbus know their teams aren’t good enough to compete and while they won’t announce a rebuild, if their hand were forced…..

When this offseason is settled, the number of teams who want to compete next year but who have an internal cap that keeps them from spending what they think is best to compete (as opposed to those waiting for the better move, those not wishing cut off their nose to spite their face for the next season, those who think its really important to have a cushion for deadline acquisitions given there’s no more playoff cap circumvention) is going to be pretty small. As it always is.

Related Myth #2: With the cap going up, teams aren’t going to need other teams to take on bad contracts.

When you have a small bathtub and you let the water run, the water will fill the tub up and start to overflow. When you have a larger bathtub and you let the water run, the water will fill up the tub and start to overflow. It might take a little longer with the same faucet and water pressure, but it will get there.

And that’s because the money is there for most teams to spend to the cap, the cap didn’t go up without the revenue, it followed the revenue.

We are seeing it now – Anaheim is desperate to get rid of Vatrano and will pay a sweetener. Might even have to pay a sweetener with Killorn or Kreider. Other teams (Dallas) may choose to move good players, reducing the effectiveness of their lineup. Others might be able to get rid of contracts without sweeteners, without affecting their overall team too much but in moves that don’t happen without cap pressure. (Toronto will likely make a move like this, though may have Domi on season long LTIR).

The point here is that the cap pressure is building once again – and there are always ways to resolve it with trades – move bad contracts with sweeteners, or move good players and make your team worse than it would otherwise be, or accept less value for a decent player because the counterparties know that you are under pressure to make the move.

But while the cap pressure isn’t really all that much different even though there’s been an increase, the options for teams to alleviate that pressure (including the need for a sweetner) has changed….. So now we turn to:

How an aggressively rising cap changes the trade market.

If a player is signed during a period of relative cap stability and that cap stability is followed by a rapid change in the cap, then that player’s relative cap hit goes down significantly. This raises the value of every single player on a long term deal compared to what it would have been flat cap era.

Take a player like Kevin Fiala, a player signed to a long term deal that started in his last RFA season and thus covers a window where there shouldn’t be too much decline absent injury (well, he got injured, but you know what I mean), and so should cover peak performance years with only the slightest predicted decline at the end. Signed to a 7 year deal in that began in 2022-23, Fiala’s $7.88 million dollar cap hit comprised 9.55% of cap. This season, 7.88M is 7.5% of the cap. When the deal is done, presuming a 9% annual cap increase next year and the year after, it will comprise 6.38% of the cap.

If Fiala signs that deal today, its $10M a season deal given the cap increase to stay at the same percentage of cap hit (technically, its 9.93M). Fiala at 30 isn’t all that different than Fiala 26 year old. And so when a team is looking at adding a quality top 6 wing (or replacing a last year of RFA arb eligible wing), with Fiala -- not an elite player, but more than a get-me-over player – they are going to be looking at $2.2 million in savings by making the trade. (It actually should be a little more than that, for reasons addressed below). That’s not chump change at all. That’s the kind of extra salary that you might pay a second round sweetener to get rid of (see the Mikayev deal – a guy seemingly overpaid by about that much). Or the kind of player that to get, you will part with more than you would have previously – you’ll trade that last year of RFA and a second rounder to get Fiala, a hypothetical equivalent player to the RFA because the cap savings are worth that second rounder for what you are doing next season. (And this is a side point, but notice how this also decreases the relative value of picks vs. signed players? And we saw that in action this offseason).

Now this dynamic is new – it has only been for the last couple years that the cap has seen meaningful jumps – and percentage increases compound. This is critical – and underappreciated. As they start to compound, you can see how much they can effect the relative attractiveness of players signed in lower cap eras. Its simple, really. In a totally flat cap era – say 10 years of a flat cap – market prices for the same kind of player should remain the same. And therefore, trades for contracts signed a couple years ago aren’t also building in a structural “savings”. To be sure, trades might always happen because players change and teams need different things, but now there’s a brand new (and material) variable to add into the equation, and it increases the value of NHL players who were previously signed as compared to those who will be on the market – and even your own players that you have to re-sign.

And this dynamic will increase as the cap increases compound. Let’s say a player signs that Fiala equivalent deal – 7 years at 10M; 9.55% of the cap. If the cap goes up 9% a year, that’s only 6.25% of the cap in year 5 of the deal (which is what Fiala’s in now) and 5.26% in year 7. It also means that overall value to a team signing that deal now is greater than signing Fiala in 2022. Unless….

What Carlsson’s and Kaprizov’s Agents Understand, The Reality of Which Guerin and Briere Reluctantly (I am sure) Acknowledge, and What Verbeek Didn’t Get. Or, if you prefer, what Tulsky and Hughes Knew Was Coming And Seth Jarvis’ and Lane Hutson’s Agent Didn’t.

The difference between a mostly flat cap with a little upward bumps here and there and one that has every reason to have multiple years of near double digit growth with a possible chance of collapse is the difference between investing in bonds and investing in the S&P. The Fiala in 2022 and 2026 26-year old Fiala-equivalents show this. In a rising cap, long term deals have a greater chance of paying off bigly for the team, and should provide more value even if the player is like, say, Kevin Fiala, and sort of plays just like you’d reasonably think he would.

And so once the agents know this, what is their response? What you got for 7.88M in 2022 isn’t 10M today even if that’s the equivalent cap hit. Nope. Because in the first scenario, the average cap hit over the first five years was about 8.75% (remember, flatter at the start) and the average in this rapidly compounding cap is gonna be 7.9% of the cap. So if we are going to make that average of those first 5 years be the same, we are talking 10.9M or so. And the longer the contract is, the higher that bump is going to be. They are leveraging the Cap to increase 82% in the next 7 years.

To summarize: a Fiala-value 7 year deal should be $2.1 M more now because of the percentage of the cap as it exists today, and another $1M+ because of the projected rate of increase. Kevin Fiala. An $11 million player in this cap.

And if teams don’t buy it, then….

Why the Compounding Cap Increases Should Decrease Term on RFA and UFA Deals

I think this is one that most people saw coming. The more there was the potential for a sequence of large cap increases, the less and less it makes sense from the player’s perspective for the player to be locked into longer term deals. Well, the less it makes sense for them if the teams aren’t going to factor in how the expected rate of cap increase into their offers, and are only offering contracts based on past market value with “gut” increase for a “gut” level of how much the cap’s going up. But even for the teams who know full well the degree of the direction of the Cap, it is still difficult to make those median-cap-hit-based long term offers because it means higher AAVs against a cap that might be 80% higher at the end of the deal, but is what it is today.

Note this: even with a 9% increase projected for 2027-28 season (and that’s the NHL’s), the right “term” for Jason Robertson given the Stars cap situation was 1 year because factoring in those future increases was near impossible if the Starts were to compete this year.

The rising cap means that the security v. betting on yourself (and the market) balance has shifted. For security to be more attractive, the $$/year has to go up meaningfully. We are taking at least $1M AAV in the Fiala example – that’s not the raise due to the cap increase, but to accommodate the *rate* of increase on top of the numeric increase.

And if teams can’t get their head around that or don’t have the space to accommodate in the short term, it means shorter deals. The post-ELC RFA players will take advantage of the rising cap, and the teams that don’t think this is reality will either be in great shape in a few years with no bad deals if revenues (and the cap) stalls again (but they will still have lost talent in the interim) or they will be paying even more than everyone else when that RFA who signed the bridge becomes a UFA. Put differently, as eye popping as some of these post-ELC RFA deals have been – those post bridge deals are going to be even more expensive if, as projected, the cap not only rises but rises at 9% a year.

So what we’ve seen this offseason is a return to RFA deals going to UFA year one. The true bridge deal. Don’t get me wrong, I think we will still see a lot of the Robertson like one year before RFA deals, but we are going to see less full-term deals as a result. In addition to the rapid cap increase, what’s turning the tide in the direction of shorter deals is the reduction in the max deal length. This means that you can’t provide nearly the same “security” carrot. You are taking a year’s salary off of what can be guaranteed, and it is what’s guaranteed over the life of the contract that is the hedge against injury or declining performance.

And so the combination of a shorter max-term deal and sizable cap increases expected annually (though not guaranteed) will mean shorter term deals. But that’s not all….

Shorter term deals and a compounding cap means more player movement; should mean more offer sheets.

The first part of this is obvious, right? Shorter deals increase the chance that a player will have multiple shots at free agency while still being a good player, and thus more moves. Its math, not calculus. It also means an increase to the number of current NHL players on “comparatively” good salaries signed before the compounding cap effect was universally recognized among owners and agents. Once untradable assets are tradable; formerly tradable assets are now more valuable because they are providing better-than-%-of-cap value. Note that this perturbation of the trade market will be most pronounced in the offseason and shouldn’t affect the rental deadline market except at the very margins.

But how does the increased player-use of shorter deals and the compounding cap affect the offer sheet market? Because the thing original teams always had (and what many RFAs wanted) was a long-term deal. The offer sheet rules peg compensation to the value of the contract divided by the number of years or five, whichever is less. And this meant offering teams were effectively capped at making offers with shorter terms and fewer RFAs would be interested in the offers.

Now I don’t think there’s going to an avalanche of offer sheets but it’s a Myth (#3) that offer sheets are rare in the NHL. While its true that there haven’t been many signed and registered with the league offer sheets, there’s nothing that keeps a player from telling his original team that he’s received an offer sheet. If Anaheim had signed Carlsson for $15 million as Carlsson reportedly offered to the Ducks after receiving (but not yet signing) the Flyers offer, then we (the public) probably never know that there was an offer sheet at all. And we have all sorts of media reporting that teams are (or might be) making offer sheets to other players. One of those reported-maybe-got-an-offer-sheet players was Minky— and its hard to reverse engineer that deal (amount and term) and not see an offer sheet influencing the deal.

Also, I think there was a belief with the rising cap that there would be fewer offer sheets because everyone has new cap space every year. That’s a myth (#4), and I think this offseason is disproving that.

I think I’ve covered why teams will be spending to the cap anyway,. But in addition, cap crunch isn’t the only reason an offer sheet might go through. Sure, that’s why Edmonton lost Holloway and Broberg, but is that why the Habs lost Kotkeniemi? To be sure, Montreal was against the cap that season – but not with LTIR, and I think they knew Weber wouldn’t be available. While cap pressure might have played some part in their decision not to match, it was equally likely that (1) they were coming off a Stanley Cup finals appearance and (wrongly) thought they needed now players more than futures; and (2) viewing offer sheets as a forced trade, they were getting a 1st and a 3rd and that wasn’t bad value for the player who had not shown material growth in 3 years; and (3) it was too much to pay a player contributing as little as Kotkeniemi was contributing under the flat cap – while they had a (wrong) belief that they were competitive.

And that’s really what I want to underline about the use of the offer sheet tool – the pressure can be on the cap, and it can also be on the “plan” – Anaheim’s plan is now destroyed if they have Carlsson making $18M and Gauthier is signed for not a lot less.

But there’s one more thing – you can look at offer sheets as forced trades. The offering team is giving up picks? And what does a rapidly increasing cap do? It marginally decreases the value of picks. Now a team making an offer sheet is unlikely to get a below market deal for the player they are targeting (at least not below UFA value). But the point is that the those picks have a little bit less value to get another player, and therefore their utility in acquiring an RFA through an offer sheet is marginally higher than it was before.

Okay, that’s enough for the board to chew on. Have at it…..

[donlever]

Thanks for the time and effort of posting that UW.

That's a veritable beast right there.

Going to take time to wade through it all....

[Topper]

UW, A few comments, and admittedly they are more local concerns than the league wide picture you painted (exceptions to the rule you may say);

Pettersson made $14.5M each of the first two years of his contract, this coming season he's down to $11M (+ the revenue bonus you described).

Another factor is currency rates. While league broadcast and licensing contracts are in US$, for Canadian teams, their local revenue streams (tickets, licensing, merchandise, corporate sponsors) are in CAN$. There are stories that Vancouver was offering a CAN$ salary for their AHL coaching staff. Vancouver has said they are not interested in spending to the cap.

Another issue relating to Vancouver, a cash strapped real estate development group in a declining real estate market with a partner looking to be bought out of his interest in the hockey team that has risen in market value as you noted.

There is also, the much more difficult to quantify, general market condition that affect fans and their entertainment choices. If teams charge more than the market can bear, they have empty seats. What do fans choose to do with their disposable income. This is certain to affect some teams more than others as it will vary between markets. I recall after the 2008 market crash, Vancouver lost a few corporate sponsors and other companies downgraded or dropped their season tickets as unjustifiable to their shareholders.

[donlever]

Not only not interested in spending to the Cap but also (allegedly) hot and bothered to drop another 20 sheets off the current payroll.

Get yer tickets here......deals on tickets here....they have some interesting promo packs out already trying to generate interest (and (as you indicate Canadian Dollar) revenue)....

[Cornuck]

I was expecting a long post - but shit! You almost broke my scroll wheel

Thanks for taking the time on this - and I'll have to make time to read it.

[UWSaint]

Pettersson made $14.5M each of the first two years of his contract, this coming season he's down to $11M (+ the revenue bonus you described).

Oops. I messed up. Scooter’s revenue bonus was $797K for last season. Which means he took down $15.3M USD. A million a goal….

[UWSaint]

(The Vancouver Stuff)

Aqualini is not spending to the cap because the team is rebuilding, possibly liquidity concerns because of the nature of his wealth. The bad owner who at least spent money is now a bad owner who probably shouldn’t be at the rich kids club if Vancouver property is collapsing. Good news for him is that he can make a billion + by selling the damn team.

Whatever the Canada issue is, the Aqualini example is special (on top of that).

And sure if the Canadian dollar’s relative weakness persists and its growth is outpaced by US growth, there are going to be tough effects down the road; for entertainment/sports and other industries. But as of now, look at those franchise values. They are keeping up.

[UWSaint]

Not only not interested in spending to the Cap but also (allegedly) hot and bothered to drop another 20 sheets off the current payroll.

Get yer tickets here......deals on tickets here....they have some interesting promo packs out already trying to generate interest (and (as you indicate Canadian Dollar) revenue)....

Is Aqua’s cash tied up in buildings that have lost money so he can’t unlock it until real estate rebounds? The league does not want owners who need hockey revenues to fund other business losses. The money is absolutely there for the Canucks to spend to the cap and more than break even in ops.

[donlever]

2 things....

...the development and residential NEW construction fields have taken a serious nose dive in this Province.

Ask Mark Carney.

...and...

Paulo.

All allegedly.

[donlever]

Get yer tickets here......deals on tickets here....they have some interesting promo packs out already trying to generate interest (and (as you indicate Canadian Dollar) revenue)....

For example...this just popped into my feed...

Get yourself a Pacific Pack!!!

Screenshot_20260727-181726_Instagram.jpg (98.64 KiB) Viewed 200 times

..or be a weekender!!

Screenshot_20260727-193806_Instagram.jpg (120.73 KiB) Viewed 177 times

Not White Hot....RED HOT!!!

Screenshot_20260727-203913_Instagram.jpg (126.58 KiB) Viewed 173 times

[Meds]

Marketing material using one of the most polarizing players in team history…..it’s either a comedy of errors or a stroke of genius.

[Cornuck]

Great post - and thanks again.

What you've laid out will help explain some of the deals coming through in the next couple of years until the teams, the players, the agents - and of course, the fans get used to the new reality of a rising cap.

It all seems good, except for 2 things. First is that revenue has to come from somewhere, and that's us. We'll see higher costs for tickets, streaming services, etc to make this potential 9% happen. Second is, as you mentioned, there will be more player movement with shorter contracts. Again, the fans kinda get shafted by seeing their favourite team's lineup change in significant ways each year.

In the short term, we'll see EP40's contract get more in line with other players that produce similar results. Fans will either adapt and say, "ok- he's a bargain now" - or still want to ship his ass outta town just to get a new face in.

I'm thinking that we'll be referring to this post for a while. (and likely we'll see some people from the media stealing from it )

[UWSaint]

Great post - and thanks again.

What you've laid out will help explain some of the deals coming through in the next couple of years until the teams, the players, the agents - and of course, the fans get used to the new reality of a rising cap.

It all seems good, except for 2 things. First is that revenue has to come from somewhere, and that's us. We'll see higher costs for tickets, streaming services, etc to make this potential 9% happen. Second is, as you mentioned, there will be more player movement with shorter contracts. Again, the fans kinda get shafted by seeing their favourite team's lineup change in significant ways each year.

In the short term, we'll see EP40's contract get more in line with other players that produce similar results. Fans will either adapt and say, "ok- he's a bargain now" - or still want to ship his ass outta town just to get a new face in.

I'm thinking that we'll be referring to this post for a while. (and likely we'll see some people from the media stealing from it )

Nothing about my post was intended to be normative, only descriptive (and predictive).

But I agree about the possible impacts this has on fans.

A potential cancer to the long term success of the NHL is (1) the financial barrier to playing the game and (2) the financial barriers to accessing the game. Kids who play are way more likely to become fans, but no doubt there's been a "professionalization" of youth sports, and plenty of programs all to happy to take (extort?) parents into all the bells and whistles. This is all fine in a world where house leagues are accessible (recreational players can be fans), but there's definitely a cultural thing going on in the US (and based on youth hockey numbers I've seen, probably Canada) where kids are taking an all or nothing approach at younger and younger ages. As for accessing the game -- playing the sport is one way to be a fan; the other way is seeing the sport either live or on tv/streaming. To be sure, the way to maximize fans isn't quite the same equation as maximizing money -- but at some time horizon it can operate like a declining birth rate in a socialist country with a robust pension transfer from general tax revenues....

But as a matter of the economics of the sport, I don't think the higher cap drives higher ticket prices or better tv deals. There's always an incentive to maximize cash flow (though not every organization identifies the optimal strategy). You could make $5 or $500 with the same work -- what do you choose? The higher cap lags the revenues (which is part of my post). So if people will pay, they will be charged. People stop paying when they can't, or where substitute products provide them a better value.

As for more player movement being bad for fans? Probably for the casuals. But I personally love seeing the movement.

As for EP40, general consensus seems to be NJ did well to get Hischier 5 years at 11.7. He got to 80 points once in his career; several seasons in the 60s (typically missing 5-12 games). He's strong defensively and makes for a great 2C, and he's been a better player than EP40 the past 2 seasons, don't get me wrong, but that's sort of the point on EP40's contract. It isn't 1C money. Not anymore. A defensively effective EP40 getting 60-65 points a year is an asset and not a liability at 11.6M under the new cap world.

[Ronning's Ghost]

Another issue relating to Vancouver, a cash strapped real estate development group in a declining real estate market with a partner looking to be bought out of his interest in the hockey team that has risen in market value as you noted.

The bad owner who at least spent money is now a bad owner who probably shouldn’t be at the rich kids club if Vancouver property is collapsing. Good news for him is that he can make a billion + by selling the damn team.

Not only not interested in spending to the Cap but also (allegedly) hot and bothered to drop another 20 sheets off the current payroll.

Is Aqua’s cash tied up in buildings that have lost money so he can’t unlock it until real estate rebounds? The league does not want owners who need hockey revenues to fund other business losses.

So you all make compelling cases for the Little Eagles to take their profits from the appreciation of their asset.

Any ideas about why they aren't doing exactly that?

[donlever]

Ego