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Salary Cap Options Under the New Deal Examined

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Old
11-06-2011, 12:39 PM
  #1
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Salary Cap Options Under the New Deal Examined

There are basically three options for the salary cap under the next agreement.

MOST LIKELY SCENARIO

The player percentage will go down gradually so the cap is not actually reduced, but by keeping it the same, the percentage the players get is reduced every year until it reaches the 52% owners will likely ask for.

This solution would be easiest to get the approval of NHLPA because the pursue on them would not be immediate. Salaries would not actually go down, they would just stop rising and veterans would really not care.


MEDIUM LIKELIHOOD SCENARIO

The more difficult solution would be to get players to accept a pay cut. The cap would go down 10% and players would need to accept at least a 5% pay cut on their current contacts. This would reduced a team's payroll by over $3. It would also put pressure on UFAs/RFAs to accept somewhat lesser salaries.

Going down to 52% of the revenue from the present 57% would mean the cap would go down $6, and with salaries reduced $3, thats under $3 less to play with.

Additionally, team revenue is almost definitely going up this year, which will make up for all or almost all the cap space lost.

Under either scenario the Rangers will have very significant cap space to play with.


LEAST LIKELY SCENARIO

The worst case is if the cap is cut from 57% to 52% without a commensurate cut in salaries.

Last year, revenue went up 13.2%. With Atlanta moving to Winnipeg, and other revenue producers, it's possible for the revenue to move at least that much next season. But even if it moves up only half of what it did last year, it still makes up for the cut from 57% to 52%.

But let's say it goes up only 1/4 of last year (doubtful considering this is supposed to be a good year for the NHL in terms of revenue). That would still make up for half of the cut in the salary cap, meaning the cap goes down only $2.5.


RANGERS SITUATION

Under most scenarios (cap remains the same until the percentage reaches 52%, or salaries are cut or the revenue goes up), the actually room a team has to play with remains the same. This is by far most likely to happen because teams themselves will not want to put themselves in an immediate cap hell.

But even if the cap is cut by a couple million, the Rangers are still in great shape.


1) Biron, Christ and Eminger are at the end of the contract, but will either be resigned or replaced by similarly paid players.

2) Kreider will get the Feds' salary.

3) Prust will get Avery's.

4)Hagelin will get Prust's old salary.

That leaves us with freed money from WW, MZA and Drury. That's $9 if the cap remains the same. If the cap is cut a couple of million, that still leaves us with ~$7.

And the above salary estimates are based on the players making the same salary as players make right now. If there's a player salary cut or even just just a cut in the cap, salaries of free agents will also go down, giving us another half a million to a million to play with.

Either way, we should have a minimum of $7 to play with even under the next agreement. Really no reason to panic.


EDIT:

One thing I forgot to count is that even right now we have about $2 in cap space plus another half a million in carryover bonuses. That's another $2.5 that will free up next year. Thus, we will have $11.5 in cap space, subject to adjustments based on the changes in revenue share and revenue increase. Short of something very drastic, we will have the $7 needed to sign a player like Parise or Suter.


Last edited by Beacon: 11-06-2011 at 01:43 PM.
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11-06-2011, 12:43 PM
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I didn't want to get people all riled up in the main post, but I think there's a good chance the cap will go up even if the revenue share is reduced from 57% to 52%. If you cut the cap about 9% (5% of 57% is 9%. I know it seems weird, but if you aren't good at math, just take my word for it), while revenue goes up more than that, the cap is actually going up. Last year it went up 13.2%. I am not saying there's any law that says it always goes up by 13.2%, but this is supposed to be a good year, so it's not impossible for the revenue to go up by at least 10%.

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11-06-2011, 01:04 PM
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Originally Posted by RangerEsq View Post
I didn't want to get people all riled up in the main post, but I think there's a good chance the cap will go up even if the revenue share is reduced from 57% to 52%. If you cut the cap about 9% (5% of 57% is 9%. I know it seems weird, but if you aren't good at math, just take my word for it), while revenue goes up more than that, the cap is actually going up. Last year it went up 13.2%. I am not saying there's any law that says it always goes up by 13.2%, but this is supposed to be a good year, so it's not impossible for the revenue to go up by at least 10%.
Next year will also be the first year which the new national TV deal will be factored into hockey related revenue. That deal will pay the NHL approximately $200m annually. It's definitely a possibility that the cap could go up even with a decrease in the player's share.

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11-06-2011, 01:13 PM
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Quote:
Originally Posted by RangerEsq View Post
There are basically three options for the salary cap under the next agreement.

MOST LIKELY SCENARIO

The player percentage will go down gradually so the cap is not actually reduced, but by keeping it the same, the percentage the players get is reduced every year until it reaches the 52% owners will likely ask for.

This solution would be easiest to get the approval of NHLPA because the pursue on them would not be immediate. Salaries would not actually go down, they would just stop rising and veterans would really not care.


MEDIUM LIKELIHOOD SCENARIO

The more difficult solution would be to get players to accept a pay cut. The cap would go down 10% and players would need to accept at least a 5% pay cut on their current contacts. This would reduced a team's payroll by over $3. It would also put pressure on UFAs/RFAs to accept somewhat lesser salaries.

Going down to 52% of the revenue from the present 57% would mean the cap would go down $6, and with salaries reduced $3, thats under $3 less to play with.

Additionally, team revenue is almost definitely going up this year, which will make up for all or almost all the cap space lost.

Under either scenario the Rangers will have very significant cap space to play with.


LEAST LIKELY SCENARIO

The worst case is if the cap is cut from 57% to 52% without a commensurate cut in salaries.

Last year, revenue went up 13.2%. With Atlanta moving to Winnipeg, and other revenue producers, it's possible for the revenue to move at least that much next season. But even if it moves up only half of what it did last year, it still makes up for the cut from 57% to 52%.

But let's say it goes up only 1/4 of last year (doubtful considering this is supposed to be a good year for the NHL in terms of revenue). That would still make up for half of the cut in the salary cap, meaning the cap goes down only $2.5.


RANGERS SITUATION

Under most scenarios (cap remains the same until the percentage reaches 52%, or salaries are cut or the revenue goes up), the actually room a team has to play with remains the same. This is by far most likely to happen because teams themselves will not want to put themselves in an immediate cap hell.

But even if the cap is cut by a couple million, the Rangers are still in great shape.


1) Biron, Christ and Eminger are at the end of the contract, but will either be resigned or replaced by similarly paid players.

2) Kreider will get the Feds' salary.

3) Prust will get Avery's.

4)Hagelin will get Prust's old salary.

That leaves us with freed money from WW, MZA and Drury. That's $9 if the cap remains the same. If the cap is cut a couple of million, that still leaves us with ~$7.

And the above salary estimates are based on the players making the same salary as players make right now. If there's a player salary cut or even just just a cut in the cap, salaries of free agents will also go down, giving us another half a million to a million to play with.

Either way, we should have a minimum of $7 to play with even under the next agreement. Really no reason to panic.
What does all that add up to?



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11-06-2011, 01:13 PM
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Originally Posted by azrok22 View Post
Next year will also be the first year which the new national TV deal will be factored into hockey related revenue. That deal will pay the NHL approximately $200m annually. It's definitely a possibility that the cap could go up even with a decrease in the player's share.

Yeah, one way or another, I really don't see the cap dropping significantly without a commensurate salary cut. The idea that team managers would want to take away $6 from their cap space is ridiculous. It would put half the league in an absolute cap hell.

The cut has to be 1) gradual; 2) replaced by increased revenue; and/or 3) tied to a salary cut.

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11-06-2011, 01:16 PM
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What does all that add up to?


Parise is my favorite non-Ranger and it kills me to see him in a Devils uniform. He's wasting his talent over there. Sign him Glenny.

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11-06-2011, 01:20 PM
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What does all that add up to?

It adds up to the Rangers having $7-10 in cap space to play with. If guys like Parise and/or Suter hit the UFA market, we will be in prime shape to put in legitimate bids. We are in as good of a cap position as any legitimate team in the league.

If the cap is suddenly cut by $6 without a salary cut, then these guys will be stuck signing with bottom-feeders because no legitimate team that has a shot at playoffs would have the cap space to sign them. I don't see too many teams wanting to do this. It's highly implausible.

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11-06-2011, 01:21 PM
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What does all that add up to?


About a minute before this, I said "We need to get Parise on the ice to tie this game."

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11-06-2011, 01:22 PM
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The Rangers are in fantastic, fantastic position, cap wise.

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11-06-2011, 01:24 PM
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What about cutting the salary cap and allowing an amnesty buyout? Isn't that what they did when they first instituted a salary cap? We'd most likely buy out Redden...

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11-06-2011, 01:28 PM
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What about cutting the salary cap and allowing an amnesty buyout? Isn't that what they did when they first instituted a salary cap? We'd most likely buy out Redden...
NO. DO NOT BUY HIM OUT. When Lundqvist, Girardi, Callahan, and Gaborik all become FA's, so does Redden. That 6.5 mil will help us so much in re-signing them (Re-signing Gaborik of course is a 50/50 at this point and not a necessity). Lundqvist, Girardi, and Callahan should add up to about 12 million, and Redden's 6.5 mil will come in HANDY. Don't want any buy-out effects hurting us cap-wise in the summer of 2015

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11-06-2011, 01:31 PM
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Originally Posted by AlphaQUp View Post
What about cutting the salary cap and allowing an amnesty buyout? Isn't that what they did when they first instituted a salary cap? We'd most likely buy out Redden...

They did an amnesty plus a 10% salary cut.

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11-06-2011, 01:34 PM
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NO. DO NOT BUY HIM OUT. When Lundqvist, Girardi, Callahan, and Gaborik all become FA's, so does Redden. That 6.5 mil will help us so much in re-signing them (Re-signing Gaborik of course is a 50/50 at this point and not a necessity). Lundqvist, Girardi, and Callahan should add up to about 12 million, and Redden's 6.5 mil will come in HANDY. Don't want any buy-out effects hurting us cap-wise in the summer of 2015
Amnest buyout. Meaning we buy out Redden without any cap penalty.

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11-06-2011, 01:35 PM
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They did an amnesty plus a 10% salary cut.
Wouldn't that be the most likely way they do it again?

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11-06-2011, 01:36 PM
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Amnest buyout. Meaning we buy out Redden without any cap penalty.
Oh lol. If that is the case, signing Parise would be as easy as ****

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11-06-2011, 01:37 PM
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Wouldn't that be the most likely way they do it again?

I think that getting players to accept a drastic cut in their salaries would be hard without causing problems. It would be much easier to say that the cap stays the same as the revenue increases until the cap is 52% of the revenue.

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11-06-2011, 05:21 PM
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Wow. Great spot to be in. Also a great "problem" to have: Suter v. Parise. Even though it may seem obvious to go for the scoring help, Suter is perhaps the best overall defenseman in the game. Might be the "safer" bet. If Staal is healthy, adding Suter to the mix gives us the best d-corps bar none IMO. Still, a tough, tough choice.

Also the failed ex-Debbie signings of years past are still haunting me. I might go Suter for that reason alone.

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11-06-2011, 05:25 PM
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imho Parise is much more of a need than Suter. I love our D going forward. Erixon isnt too far away, McIlrath is on his way in a few years...and we already have a studly top 4.

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11-06-2011, 08:13 PM
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CAPGEEK.COM CAP CALCULATOR

FORWARDS
Zach Parise ($7.500m) / Brad Richards ($6.666m) / Marian Gaborik ($7.500m)
Brandon Dubinsky ($4.200m) / Derek Stepan ($0.875m) / Ryan Callahan ($4.275m)
Chris Kreider ($1.400m) / Artem Anisimov ($1.875m) / Brandon Prust ($2.000m)
Michael Rupp ($1.500m) / Brian Boyle ($1.700m) / Carl Hagelin ($0.875m)

DEFENSEMEN
Marc Staal ($3.975m) / Daniel Girardi ($3.325m)
Ryan McDonagh ($1.300m) / Mike Sauer ($1.250m)
Tim Erixon ($1.750m) / Michael Del Zotto ($1.885m)
/ Steve Eminger ($0.800m)

GOALTENDERS
Henrik Lundqvist ($6.875m) / Martin Biron ($0.875m)

BUYOUTS: Chris Drury ($1.666m)

CAPGEEK.COM TOTALS (follow @capgeek on Twitter)
(these totals are compiled without the bonus cushion)
SALARY CAP: $64,300,000; CAP PAYROLL: $64,070,834; BONUSES: $1,462,500
CAP SPACE (21-man roster): $229,166

The numbers aren't perfect, but this is a ballpark idea of what it would look like if we signed Zach next year.

Honestly I don't see Parise getting anything less than what Gabby did a few years ago, especially if he regains his form. So say 7.5. Also, I may have given Prust a bit much, but, he'll get something around there. Signing Zach makes us a legit contender IMO, but doesn't leave us much space going down the road. Worried how we would re-sign Stepan, especially if the cap goes down.

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11-06-2011, 08:46 PM
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Eesh, I'd probably pass on Prust at 2M. 1.5 is the max I'd go, really.

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11-06-2011, 08:49 PM
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Eesh, I'd probably pass on Prust at 2M. 1.5 is the max I'd go, really.
True, figured I'd given him a bit much. More likely he'll get Boyle money than $2.

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11-06-2011, 08:52 PM
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Does the cap go down before FA or after? Could determine what kind of numbers Parise gets. If the cap drops to the mid-low 50's before FA he won't get 7.5M, IMO. If it drops after FA he could get up to 7.5M per.

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11-06-2011, 09:10 PM
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Say we did bring in Parise this offseason. Aren't McD, Sauer, Anisimov and Stepan all do to re-up on their contracts the season after? It would be pretty tough to get them all signed at what they're worth with only an extra 2mill or so lying around unless the cap goes up again a good amount.

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11-06-2011, 09:10 PM
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Freezing the cap $ while the percantage drops makes a ton of sense. Probably too much sense. If they could agree on this and take the top end of the cap conversation off the table, I'd bet the rest of the agreement would fall into place quickly.

The new TV revenue as well as the increased revenue drive by moving Atlanta to Winnipeg will both help salve this situation.

While there are a lot of other contentious issues, they can be bargained out once the top end of the cap is cemented.

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11-06-2011, 09:26 PM
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Say we did bring in Parise this offseason. Aren't McD, Sauer, Anisimov and Stepan all do to re-up on their contracts the season after? It would be pretty tough to get them all signed at what they're worth with only an extra 2mill or so lying around unless the cap goes up again a good amount.
This is what I was thinking.

If I were Glen I'd move Dubinksy and slide Kreider into that 2nd line role. That way we'd have more than enough to lock up those 4 above, and maybe still even bring in Parise.

I've been saying it, and I'll say it again, I think Dubinsky's already hit his ceiling, and may be time to move him.

He's a solid two-way guy with STREAKY scoring.

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