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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.

How much can the salary cap grow?

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Old
07-03-2017, 03:00 AM
  #1
alko
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How much can the salary cap grow?

Is there any limit in next years?

Because already we are on 75 000 000. After 12 years, the salary cup grow from 39 to 75 millions. That is a difference of 36 millions!

What could we see in 5 years? 10 years? 100 million salary cup? Is it even possible?

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07-03-2017, 05:58 AM
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Canadiens1958
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Television

Quote:
Originally Posted by alko View Post
Is there any limit in next years?

Because already we are on 75 000 000. After 12 years, the salary cup grow from 39 to 75 millions. That is a difference of 36 millions!

What could we see in 5 years? 10 years? 100 million salary cup? Is it even possible?
If the NHL can generate greater TV revenues it is. Turnstile revenues are near optimum.

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07-03-2017, 06:02 AM
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Originally Posted by Canadiens1958 View Post
If the NHL can generate greater TV revenues it is. Turnstile revenues are near optimum.
Yeah a lot of it will depend on a new TV deal in the US. I'm not even sure when the rights are up but if the NHL does well with that then the cap will probably start going up.

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07-03-2017, 06:19 AM
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Originally Posted by TheBeastCoast View Post
Yeah a lot of it will depend on a new TV deal in the US. I'm not even sure when the rights are up but if the NHL does well with that then the cap will probably start going up.
A TV deal in the USA is about 6-7 years away from renewal.

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07-03-2017, 06:56 AM
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Originally Posted by aemoreira1981 View Post
A TV deal in the USA is about 6-7 years away from renewal.
Ends in 2021 -- 4 years from now.

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07-04-2017, 02:06 AM
  #6
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Quote:
Originally Posted by alko View Post
IHow much can the salary cup grow?
They'll just keep adding rings too it.

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07-04-2017, 08:36 AM
  #7
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They'll just keep adding rings too it.
5% escalator rings, then endless whining about escrow.

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07-04-2017, 10:28 AM
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Vegas, Matthews and McDavid will play a big part in a US TV deal

McDavid is so good that people who know nothing about hockey can see it if they catch him on ESPN night in and out.

Matthews just put up 40 goals as a rookie and might be the best American player in the league from Arizona of all places. His story can be rehashed over and over and they can play the angle of Arizona with no snow to Toronto the mecca of hockey...Where he's a great success. Even a liberal circle jerk can be had over his mom being an undocumented immigrant....so that's 50% of the US TV market right there.

Vegas will have a hard time competing with the live entertainment the city offers when it comes to tourists. Why see a sport you know nothing about for $XX.XX when Jerry Seinfeld is at Caesars Palace? Elton John, Cher, and so on you get the idea. That being said Vegas is full, absolutely full of every kind of tourist imaginable. If they go to a game and enjoy it they might start following the team from their home country. Also their season tickets sold out...so they already seemingly have a non traditional market locked up and should be able to get money for a TV deal if their arena is full. Season ticket holders I would imagine want to see the team play the away games so...The league has leverage there with a local fan base that for now is all in.

IMO if there was a time for the sport to grow in the US market it would be now with Las Vegas, a generational phenom, and a great American born player all just starting out. Nashville being good doesn't hurt, I would be shocked if they didn't pull some non traditional fans to the TV's for the finals.

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07-04-2017, 10:54 AM
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I think we'll see it hit 80 million by the end of the decade. Expansion/relocation could help things as well.

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07-04-2017, 11:07 AM
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Originally Posted by Slot View Post
5% escalator rings, then endless whining about escrow.
How do the rings and escrow work?

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07-04-2017, 11:45 AM
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Hard to see how the league increases revenues greatly from here without growing the game internationally.

And the league shows very little interest in that.

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07-04-2017, 05:37 PM
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Originally Posted by 4LightAM View Post
How do the rings and escrow work?
Every year the pa has the option to increase the salary cap 5% above the projected number. This involves the players putting more salary dollars in escrow accounts. At the end of the year when all the financials are in the cap number is determined. Any variance is either taken out of the escrow account or added to by the owners. So far few, if any, years have had the owners paying out.

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07-04-2017, 06:14 PM
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I've posed this idea before here, but never to anyone who might be able to give me a good response:

Am I correct in assuming there's no change the NHL, at least under Bettman's leadership, would ever lower the cap? If they did, it would be a pretty clear admittance that the league, as a whole, is losing not just money, but a lot of money, correct?

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07-04-2017, 09:01 PM
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Quote:
Originally Posted by Leafsdude7 View Post
I've posed this idea before here, but never to anyone who might be able to give me a good response:

Am I correct in assuming there's no change the NHL, at least under Bettman's leadership, would ever lower the cap? If they did, it would be a pretty clear admittance that the league, as a whole, is losing not just money, but a lot of money, correct?
Believe me, they would LOVE to lower the cap so the owners get more of the revenue.

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07-04-2017, 09:08 PM
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Quote:
Originally Posted by Leafsdude7 View Post
I've posed this idea before here, but never to anyone who might be able to give me a good response:

Am I correct in assuming there's no change the NHL, at least under Bettman's leadership, would ever lower the cap? If they did, it would be a pretty clear admittance that the league, as a whole, is losing not just money, but a lot of money, correct?
The cap will only lower with another lockout, which may happen. As it stands the league cannot simply lower the cap. I doubt owners care about the image it portrays on them and the league. Lower the cap, more money for the owners.

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07-05-2017, 12:14 AM
  #16
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Quote:
Originally Posted by Leafsdude7 View Post
I've posed this idea before here, but never to anyone who might be able to give me a good response:

Am I correct in assuming there's no change the NHL, at least under Bettman's leadership, would ever lower the cap? If they did, it would be a pretty clear admittance that the league, as a whole, is losing not just money, but a lot of money, correct?
I think you're invoking some pretzel logic connecting A to B.

The NHLPA clearly has no interest in lowering the cap, so you can't place the current cap situation solely on the NHL.

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07-05-2017, 01:34 AM
  #17
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Quote:
Originally Posted by lindroshomer View Post
Vegas, Matthews and McDavid will play a big part in a US TV deal

McDavid is so good that people who know nothing about hockey can see it if they catch him on ESPN night in and out.

Matthews just put up 40 goals as a rookie and might be the best American player in the league from Arizona of all places. His story can be rehashed over and over and they can play the angle of Arizona with no snow to Toronto the mecca of hockey...Where he's a great success. Even a liberal circle jerk can be had over his mom being an undocumented immigrant....so that's 50% of the US TV market right there.

Vegas will have a hard time competing with the live entertainment the city offers when it comes to tourists. Why see a sport you know nothing about for $XX.XX when Jerry Seinfeld is at Caesars Palace? Elton John, Cher, and so on you get the idea. That being said Vegas is full, absolutely full of every kind of tourist imaginable. If they go to a game and enjoy it they might start following the team from their home country. Also their season tickets sold out...so they already seemingly have a non traditional market locked up and should be able to get money for a TV deal if their arena is full. Season ticket holders I would imagine want to see the team play the away games so...The league has leverage there with a local fan base that for now is all in.

IMO if there was a time for the sport to grow in the US market it would be now with Las Vegas, a generational phenom, and a great American born player all just starting out. Nashville being good doesn't hurt, I would be shocked if they didn't pull some non traditional fans to the TV's for the finals.
I think you're overestimating how alot of this may impact the NHL's bottom line. For instance, ESPN barely covers hockey. If McDavid/Matthews score a goal from their ass, they may crack that night's top 10 but otherwise, you're looking at maybe a minute or two a night of coverage. McDavid and Matthews isn't going to change that. ESPN doesn't cover hockey because ESPN doesn't air hockey, they have no vested interest.

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07-05-2017, 03:39 AM
  #18
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It has to go up, just based on ~2% annual inflation.

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07-05-2017, 06:13 AM
  #19
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Originally Posted by MikeyMike01 View Post
It has to go up, just based on ~2% annual inflation.
Canadian dollar going down put serious pressure on the cap a couple of years ago without the NHLPA escalator it may have gone down IIRC.

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07-05-2017, 11:18 AM
  #20
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Quote:
Originally Posted by lindroshomer View Post
Vegas, Matthews and McDavid will play a big part in a US TV deal

McDavid is so good that people who know nothing about hockey can see it if they catch him on ESPN night in and out.

Matthews just put up 40 goals as a rookie and might be the best American player in the league from Arizona of all places. His story can be rehashed over and over and they can play the angle of Arizona with no snow to Toronto the mecca of hockey...Where he's a great success. Even a liberal circle jerk can be had over his mom being an undocumented immigrant....so that's 50% of the US TV market right there.

Vegas will have a hard time competing with the live entertainment the city offers when it comes to tourists. Why see a sport you know nothing about for $XX.XX when Jerry Seinfeld is at Caesars Palace? Elton John, Cher, and so on you get the idea. That being said Vegas is full, absolutely full of every kind of tourist imaginable. If they go to a game and enjoy it they might start following the team from their home country. Also their season tickets sold out...so they already seemingly have a non traditional market locked up and should be able to get money for a TV deal if their arena is full. Season ticket holders I would imagine want to see the team play the away games so...The league has leverage there with a local fan base that for now is all in.

IMO if there was a time for the sport to grow in the US market it would be now with Las Vegas, a generational phenom, and a great American born player all just starting out. Nashville being good doesn't hurt, I would be shocked if they didn't pull some non traditional fans to the TV's for the finals.
In the US no gives a **** about Mcdavid or Matthews, as for Las Vegas, they had trouble getting local deals. For the US TV deal, it will depend on how big markets are doing.

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07-05-2017, 12:09 PM
  #21
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Quote:
Originally Posted by ScottyBowman View Post
Believe me, they would LOVE to lower the cap so the owners get more of the revenue.
No, the owners salary-related expenses won't go up or down based on the cap.

If the cap goes down to the point that owners paid less than 50% of HRR, they have to make up the difference. It's the opposite of escrow.

If they pay more, the players refund the difference.

Either way, it's driven by 50% of HRR, no matter where the cap is -- the owners as a group pay the exact same amount with a high cap as with a low one.

There will almost always be a payment by either the owners or the players, as it would be very unexpected that the total player contracts in a given year would come to exactly the players' share of HRR.

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07-05-2017, 02:06 PM
  #22
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any growth will come from overseas money and new US national tv deal in due time. Individual team revenues can't get much higher.

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07-05-2017, 07:25 PM
  #23
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Originally Posted by viper0220 View Post
In the US no gives a **** about Mcdavid or Matthews, as for Las Vegas, they had trouble getting local deals. For the US TV deal, it will depend on how big markets are doing.
Agreed. Both will do great things for the league on the ice, however until they start making themselves a bigger brand like LeBron, there is a limit on what hey can do for the league overall. NBC isn't going to show the oilers on TV if there is nothing else to mcdavid besides what he does on the ice.

The only thing that can really negatively impact the cap is for the cap ceiling formula to be adjusted to limit escrow. Players have to just accept the double digit percentage of escrow until they either stop using the escalator or change the cap formula.

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Old
07-06-2017, 09:32 AM
  #24
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Is it then safe to assume that the cap will only grow slightly each year for the next 4 years? By slightly, I mean around $1-3M each year.

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07-06-2017, 10:03 AM
  #25
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Is it then safe to assume that the cap will only grow slightly each year for the next 4 years? By slightly, I mean around $1-3M each year.
Barring a rise in the value of the Canadian dollar, I don't see a big bump coming in the near future.

How much is the league going to get from online streaming of games via social media? I would guess that the deal with Rogers already includes their streaming services.

Like I said, cap won't go down or stagnate unless there is a new formula to calculate the cap ceiling to limit escrow.

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