Friday, November 11, 2005

The perils of the salary cap

If you're like me, you've probably had all kinds of niggling questions about the NHL's salary cap since we hockey pundits learned that there would be one.

What are the 'holes' in the cap? What problems or issues will it create for teams? How will it affect trades and transactions?

This week, in their annual Bucks and Pucks issue, The Hockey News takes a pretty valiant stab at addressing all the salary cap questions that, frankly, the rest of the hockey media haven't spent enough time addressing.

Veteran THN writer Mark Brender's cover story starts with a tale about Tampa Bay Lightning minor league goaltender Brian Eklund and the various salary cap mechanisms that led to his being called up to the big leagues:

The Bolts had goaltenders Gerald Coleman and Brian Eklund playing with their AHL affiliate in Springfield. Coleman's NHL salary is $525,000, which works out to about $2,679 per day. Eklund's NHL salary is $450,000, or $2,296 per day. When the Lightning crunched the numbers, they discovered they didn't have the cap space to call up COleman even if they watned to.

A roster decision made over $373.

Gives a new importance to a team's bean counter, no?

By now, most hockey fans have heard the tales of teams like the Canucks, who have been sending players by plane back to Manitoba on non-game days in order to save a few thousand dollars salary. (Tom Benjamin addressed this last week — what I termed in the comments section 'ridiculous'.)

THN presents a much clearer picture, however, than the various reports of salary cap maneuvering that have appeared in daily newspapers.

Teams have $39-million to spend over 196 days of the regular season. That's $198,980 per day... If teams spend less than that amount on any given day, the difference in effect goes into a "cap bank" that can be used down the road....

A team that has average a $37-million payroll until that point could, in theory acquire palyers who salaries total $9-million and stil be cap-compliant.

In other words, things should get mighty interesting at the trade deadline this year. Teams who are say, $4-million under the cap on March 10 (the date to which the deadline has been moved this season), will be able to take on additional salary much greater than the $4-million they have 'available.'

The trade deadline occurs on the date 40 days from the last date of the regular season. 40 days is just more than 20 per cent of the 196 days in the season, meaning teams are only on the hook for paying newly acquired players for those 40 games. In other words, a team with $4-million remaining under the cap on March 10 can acquire an additional $20-million in salary for the rest of the year — and more importantly, the playoffs.

And they said the cap didn't have holes.

How many teams would qualify under this arbitrary $4-million remaining group? 14 clubs have spent under $35-million, including the Ottawa Senators, who have spent $34.9-million to this point.

Yes, Ottawa — the NHL's top team at the moment — could, barring injuries or other factors, 'load up' for the postseason.

Now there's a scary thought.

Perhaps not surprisingly, THN reports that at least six NHL teams — Detroit, Buffalo, Minnesota, Phoenix, Tampa Bay and Washington — have acquired the services of a capologist. Teams have access to a secure website that tracks NHL salaries on a daily basis, which explains why GMs have quickly adopted the practice of jettisoning spare players to minor league teams to help stay out of, or away from, the red.

Another hole in the cap that THN addresses? Teams can exceed the cap by up to 7.5 per cent if it is the result of player bonuses. Should a player bonus push a team over the $39-million limit, however, the amount that club is over in 2005-06 will be deducted from their 'cap max' for the next season.

One team this could definitely affect is the Thrashers, who have Peter Bondra — a player with one of the more incentive-laden contracts (he can earn up to $3.4-million this year) who is having a strong season.

THN's editorial in the issue offers a subtle criticism of teams that are playing 'fast and loose' with the cap in its freshman year:

...about a third of NHL teams are flirting dangerously close to the $39-million cap. These clubs are already having to make personnel decisions, such as which rookies to keep on the roster (the low-salaried ones) and which depth players to call up from the minors (the ones who earn the NHL minimum), based on cap sense, not hockey sense.

There's no doubt that some teams bumping up against the cap are going to pay for it later, making me wonder if, in the future, a better strategy will be for GMs to leave some breathing room from the limit. By all accounts, it's those teams which are going to have the leeway to manipulate their rosters how they please — something that should lead to better on-ice performance.

Lower salaried teams being better set for the playoffs? Imagine that.


At 6:20 p.m., November 11, 2005, Blogger Chris said...

You can see why Toronto moved their affiliate from St. John's to TO. Makes it a lot easier to choose the talent.

At 8:21 p.m., November 11, 2005, Blogger James Mirtle said...

Unfortunately, unless they change the salary rules in these cases, more and more teams are going to have to have their minor league clubs next door.

At 3:10 a.m., November 12, 2005, Blogger Achtungbaby said...

Suddenly having your own minor league club isn't just a luxury, but essential. I hope the Oilers have some long-term plans on the horizon in this regard.

At 5:12 p.m., November 12, 2005, Blogger The Acid Queen said...

There's no doubt that some teams bumping up against the cap are going to pay for it later, making me wonder if, in the future, a better strategy will be for GMs to leave some breathing room from the limit.

You mean like Carolina's doing already?



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