The Rising Cap

I have a hard time underestanding why the public is SO overly concerned about the rising cap in the NHL.  I hear no complaints from NHL teams, despite the fact the floor is now as high as the Cap was 4 years ago.

Want to know why?

More Revenue and Profit Sharing.  Think about this.  A cap of 40M per team, with a 30 team league, along with a salary spend of 54% of total revenue, equals about (40M * 30 teams / .54) 2.2 Billion in Annual Revenue.  If the Cap is now 54.7M, then the League’s Revenues would be (56.7M * 30 teams / .54) 3.15 Billion.

I know my numbers are off a bit based as the actual amount is based on average salaries, and the % of dollars committed to salaries based on total revenue goes up as revenue goes up, BUT, the league is essentially making 40-50% more revenue in the last four years. 

And it’s now shared.

The dollars on FA contracts were not unreasonable based on this revenue growth, not at all.  In fact, they seem even more reasonable to me than ever.  Consider this.  Scott Neidermeyer upon hitting free agency after the lockout, and signed for an average 6.75m per season.  With the Revenue and Salary cap growth at 44% in 4 years, he would have commanded an $9.72 average on a 4 year deal if signed this year.  Brian Campbell is no Neidermeyer, and collected 73% of Neidermeyer’s number (7.1M/yr).  Seems overly fair and average to me.

The real concern the league has is the number of years given out on some of these contracts.  8 years was double the life Neidermeyer asked for, and that is way too much.

The Chief Canuck

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