The NHL announced on Monday that the salary cap will be going up to approximately $71 million for the 2014-15 season, which is an increase of about 12 percent from the current $64.3 million.Gary Bettman, the Commissioner of the NHL, announced the increase during the league's Board of Governors meeting. The cap limit last season was $70.2 million.
The cap will go up considerably since the NHL currently came to an agreement with Canadian broadcasters to the tune of $5.2 billion over the next 12 years.
The new deal was made with Rogers Communications and it represents the biggest media-rights contract in the history of the NHL. The Rogers contract begins next season and all 30 of the league’s teams will benefit from the increased revenue.
However, Bettman warned that the $71 million prediction for the salary cap is basically just an estimate at the moment and it’s possible that it could change slightly. The NHL salary cap is more or less tied to the amount of money the league can generate.
Bettman figures the league will be able to pull in just over $3.3 billion this campaign. According to the new Collective Bargaining Agreement with the players, the money splits the hockey-related revenue with them 50-50.
The NHL calculates the salary cap by multiplying the league’s hockey-related revenue by 50 percent and then dividing it by 30. The 50 percent represents the players’ revenue share and the 30 represents the number of teams in the league. There is also a minimum amount of money each team has to spend in the salary cap.Next season that is expected to be a minimum of about $52 million.
Bettman said, “I said to the Board there shouldn't be any issue or consternation, if $71 million is the cap level it's because revenues have gone up, and that's a good thing. When the cap goes up, revenue sharing goes up, and the system works the way it's supposed to.”
The league’s general managers weren’t surprised the salary cap is going up since the revenue is increasing on a yearly basis.
Mike Gillis, the general manager of the Vancouver Canucks, admits it makes his job a lot easier when he has more money to spend on player contracts. He added that it’s his goal to win the Stanley Cup and a higher salary cap is a big help to all general managers around the league.
Ray Shero, the GM of the Pittsburgh Penguins, said the higher cap is necessary for his team since Sidney Crosby makes $8.7 million towards the cap and Evgeni Malkin makes $9.5 million. In addition, he needs to sign free agents Jussi Jokinen and Brooks Orpik before next season begins.
Shero claimed the higher cap will give the Penguins some much-needed breathing room, but most of all it means the league’s revenues are increasing.
The small market teams that don’t reach the salary cap ceiling shouldn’t have a problem dishing out the minimum salary cap, since the new television contract will see their revenues increase and the added money can be spent on players.
Of course, to be successful though, general managers need to spend their salary cap money wisely, which isn’t always the case with some teams.
