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The Business of Hockey Discuss the financial and business aspects of the NHL. Topics may include the CBA, work stoppages, broadcast contracts, franchise sales, NHL revenues, relocation and expansion.

The Value of the NHL Salary Cap Dollar

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Old
08-05-2014, 11:16 AM
  #1
kyle evs48
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The Value of the NHL Salary Cap Dollar

There's a similar discussion taking place on this board, but I thought this might deserve its own thread because I took the time to crunch the numbers to compare the value of the NHL salary cap dollar from year to year.

Each box represents the amount of NHL salary cap dollars from year-Y that equal one salary cap dollar in year-X.

For example: In 2014-15, 1 salary cap dollar is equivalent to 1.77 salary cap dollars from 2005-06.

 2005-062006-072007-082008-092009-102010-112011-122012-132013-142014-15Y
2005-061.000.890.780.690.690.660.610.650.610.57 
2006-071.131.000.870.780.770.740.680.730.680.64 
2007-081.291.141.000.890.890.850.780.840.780.73 
2008-091.451.291.131.001.000.950.880.950.880.82 
2009-101.461.291.131.001.000.960.880.950.880.82 
2010-111.521.351.181.051.051.000.920.990.920.86 
2011-121.651.461.281.131.131.081.001.071.000.93 
2012-131.541.361.191.061.061.010.931.000.930.87 
2013-141.651.461.281.131.131.081.001.071.000.93 
2014-151.771.571.371.221.211.161.071.151.071.00 
X           

I did all of this with the help of the Subban contract.

Subban's 2014-15 contract: $9M per year
2014-15 salary cap: $69M
Subban's 2014-15 contract % of cap: 13.04%

I plugged that 13.04% into each year's salary cap and did some more division to come up with each number.

I just thought this might be useful in comparing contracts from different years, since so many people like to do so without any context.

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08-05-2014, 11:25 AM
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Fugu
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Thanks for taking the time to put this together.

As an example, Lidstrom was making just over $7 MM in 2005, after the 24% clawback. That would ~$12 MM in today's cap dollars. (Player share was 54% that year.)

This illustrates what many know/predicted-- the stars will always get their money. This just leaves less for the lower and middle classes since the player share is now 50%. That said, all the players will end up giving money back as teams push spending toward the ceiling and not the floor.

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08-05-2014, 01:33 PM
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Lidstrom was at $7.6m for 2005-2006. He had been on a $10m contract before the 24% rollback.

That 19.5% of cap would be the equivalent of $13.3m these days, just shy of the 20% max.

I'm slightly surprised we've only seen one player ever get the max allowed 20% in NHL history. Guess the teams figured out pretty quickly that was too much, even for the best of players.

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08-05-2014, 03:38 PM
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Quote:
Originally Posted by mouser View Post
Lidstrom was at $7.6m for 2005-2006. He had been on a $10m contract before the 24% rollback.

That 19.5% of cap would be the equivalent of $13.3m these days, just shy of the 20% max.

I'm slightly surprised we've only seen one player ever get the max allowed 20% in NHL history. Guess the teams figured out pretty quickly that was too much, even for the best of players.

Hey, I was going from memory, and that was a decade ago. Yeesh.

If there's one player who actually was worth that much, it was Lids. One Cup, another almost Cup, and playoff appearances the entire time. However, he never demanded the max, which he could have easily gotten. He just fired his agent, Holland asked how much he wanted and for how long, Lids would show up one day and sign. I'm serious.

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08-05-2014, 04:59 PM
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Quote:
Originally Posted by mouser View Post
Lidstrom was at $7.6m for 2005-2006. He had been on a $10m contract before the 24% rollback.

That 19.5% of cap would be the equivalent of $13.3m these days, just shy of the 20% max.

I'm slightly surprised we've only seen one player ever get the max allowed 20% in NHL history.
Guess the teams figured out pretty quickly that was too much, even for the best of players.
Who was it? Off the top of my head, I can't remember a player getting that much of the cap.

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08-05-2014, 05:02 PM
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Quote:
Originally Posted by Fugu View Post
Hey, I was going from memory, and that was a decade ago. Yeesh.

If there's one player who actually was worth that much, it was Lids. One Cup, another almost Cup, and playoff appearances the entire time. However, he never demanded the max, which he could have easily gotten. He just fired his agent, Holland asked how much he wanted and for how long, Lids would show up one day and sign. I'm serious.
He had 4 cups. Back to back cups in 96,97, 01 and 08.

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08-05-2014, 05:02 PM
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Quote:
Originally Posted by Riptide View Post
He had 4 cups. Back to back cups in 96,97, 01 and 08.

I meant post-lockout. I'm very aware of all their Cups otherwise-- and the one they should have in 2009.

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08-05-2014, 05:37 PM
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Quote:
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I meant post-lockout. I'm very aware of all their Cups otherwise-- and the one they should have in 2009.
Funny. Although I do admit my Pens got off very lucky there.

But back to my original question. Who was the player who took 20%?

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08-05-2014, 05:39 PM
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Quote:
Originally Posted by Riptide View Post
Who was it? Off the top of my head, I can't remember a player getting that much of the cap.
Jagr - originally $11M, $8.36M after 24% rollback, and then reduced to $7.8M due to the 20% max salary.

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08-05-2014, 10:37 PM
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Quote:
Originally Posted by kdb209 View Post
Jagr - originally $11M, $8.36M after 24% rollback, and then reduced to $7.8M due to the 20% max salary.
I was thinking of a player who actually signed after the 2005 CBA instituted the salary cap and individual player salary was limited to 20% of the cap.


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08-05-2014, 10:51 PM
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Quote:
Originally Posted by mouser View Post
I was thinking of a player who actually signed after the 2005 CBA instituted the salary cap and individual player salary was limited to 20% of the cap.


Are you saying there was one? Weber at $14 MM, though the cap hit was less?

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08-05-2014, 10:57 PM
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Quote:
Originally Posted by Fugu View Post
Are you saying there was one? Weber at $14 MM, though the cap hit was less?
Since the lost year and 2005 CBA there is one player who signed a contract with the maximum allowed 20% of cap each year of the contract. And it was a multi-year contract.

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08-05-2014, 11:12 PM
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Quote:
Originally Posted by mouser View Post
Since the lost year and 2005 CBA there is one player who signed a contract with the maximum allowed 20% of cap each year of the contract. And it was a multi-year contract.

It can't be any of the cap weasel contracts, so that rules out the likes of Kovalchuk et al.

Jagr, re-signing with NYR?

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08-05-2014, 11:47 PM
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Quote:
Originally Posted by Fugu View Post
It can't be any of the cap weasel contracts, so that rules out the likes of Kovalchuk et al.

Jagr, re-signing with NYR?
Nope, not Jagr. The player is still active, currently on a team that won the Cup within the past decade.

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08-06-2014, 12:11 AM
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Eric Staal.

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08-06-2014, 12:21 AM
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Eric signed an extension in 2008-2009 starting the next season.

The 08-09 cap was $56.7m, Staal's new contract was $8.25m on average. Making it only 14.5% of the cap.

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08-06-2014, 12:45 AM
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Brad Richards.

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08-06-2014, 12:51 AM
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Quote:
Originally Posted by mouser View Post
Nope, not Jagr. The player is still active, currently on a team that won the Cup within the past decade.
Richards signed one at 7.8m x 5 in May of 2005. The cap at the time was 39m, so that would have been 20%... however it didnt' take effect till 2006, when the cap was 44m.

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08-06-2014, 06:16 AM
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Quote:
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Since the lost year and 2005 CBA there is one player who signed a contract with the maximum allowed 20% of cap each year of the contract. And it was a multi-year contract.
ovie?

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08-06-2014, 09:18 AM
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Quote:
Originally Posted by kdb209 View Post
Jagr - originally $11M, $8.36M after 24% rollback, and then reduced to $7.8M due to the 20% max salary.
He earned $8.36m per season until he became free agent in the summer of 2008. Rangers paid $7.8m while Capitals paid the remaining $560,000.

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08-06-2014, 10:49 AM
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Quote:
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Brad Richards.

Yes, this is who mouser had in mind. At the time the contract was signed, it hit the limit.

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08-06-2014, 11:11 AM
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Quote:
Originally Posted by Cold Medicine View Post
Brad Richards.
Quote:
Originally Posted by Riptide View Post
Richards signed one at 7.8m x 5 in May of 2005. The cap at the time was 39m, so that would have been 20%... however it didnt' take effect till 2006, when the cap was 44m.
Yup. Richards is the only player so far to sign the maximum allowed contract paying him 20% of the current cap each year.

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08-09-2014, 05:26 PM
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Quote:
Originally Posted by Fugu View Post
Thanks for taking the time to put this together.

As an example, Lidstrom was making just over $7 MM in 2005, after the 24% clawback. That would ~$12 MM in today's cap dollars. (Player share was 54% that year.)

This illustrates what many know/predicted-- the stars will always get their money. This just leaves less for the lower and middle classes since the player share is now 50%. That said, all the players will end up giving money back as teams push spending toward the ceiling and not the floor.
I am trying to understand your last sentence which indicates that players will have to give money back as teams push spending towards the ceiling. How does this work in the CBA?

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08-09-2014, 06:43 PM
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I am trying to understand your last sentence which indicates that players will have to give money back as teams push spending towards the ceiling. How does this work in the CBA?
Could mean a few different things. As more teams spend closer to the cap then the floor, that upsets the "average", and we would see teams spending more than 50% of HRR on player costs, which means the players get the escrow hit to level that out. Could also mean that we'll see some players taking some sort of discount... however we didn't really see that with Kane/Toews new contracts, so I doubt that's where Fugu was going.

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08-09-2014, 07:07 PM
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Quote:
Originally Posted by Riptide View Post
Could mean a few different things. As more teams spend closer to the cap then the floor, that upsets the "average", and we would see teams spending more than 50% of HRR on player costs, which means the players get the escrow hit to level that out. Could also mean that we'll see some players taking some sort of discount... however we didn't really see that with Kane/Toews new contracts, so I doubt that's where Fugu was going.
Thanks for providing some insight on this.

I started to read the CBA to try to understand how the system works. If players are to get 50% of the HRR, and the cap ceiling and floor are 15% of the Mid Point which I believe is the average HRR on a per team basis, then some of the higher revenue teams may not be spending 50% of their HRR, and some of the lower revenue teams may be spending more than the HRR, but the players might not in the end get exactly 50% of the total HRR. So I was wondering how it worked to guarantee 50% was paid to the players.

The CBA introduces other aspects such as revenues being paid by the top HRR earning teams to the lower HRR teams as well as Growth payments. Then there is the issue of some teams spending more than the Mid Point HRR and some paying near the cap but exceeding their 50% of HRR. It seems that the teams might be giving the players more than the 50% that the agreement requires. I have not developed a clear view yet as to how it works in detail. It appears to quite complicated.

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