Will teams struggle to reach salary floor as cap rises?
While everyone is excited to see the salary cap rise over the next couple of years, there might be a few franchises in smaller markets that might be fearful of how much that’ll raise the salary floor.
Next season, the salary cap will rise by $8.5 million to $104 million, with the cap expected to reach $113.5 million in 2027-28. While that is intriguing to some, as teams have more money to spend on big-time players, and make free agency and trade deadline season as entertaining as ever.
However, that means the lower teams might have to worry about reaching a certain dollar amount. The floor is going to rise from $70.6 million this year to $76.9 million next season, with the floor going up to $83.3 million for the 2027-28 campaign.
On Thursday’s edition of Daily Faceoff LIVE, David Pagnotta joined Tyler Yaremchuk and Matt Larkin to explain how the rising cap might hurt some teams in the NHL.
David Pagnotta: There will be teams that are going to internalize their own cap and try not to exceed it. I think we get to that mark, not this summer, the following summer. Once we get to $113.5 million. So the cap’s going to $104 [million] next season. It’s increasing $8.5 million. The following season, it’s increasing $9.5 [million] to $113.5 [million]. Now that can fluctuate, that can adjust a little bit year after year. Then the projection after that already is another $8, $9 million, putting us around, you know, between $123 [million] and $125 [million]. When we get to that point, and even the $113 [million] mark, I think that’s where we’re going to see some teams going, ‘We’re setting ours at $100 [million], and unless we’re right there for playoff time and Cup contention, we’re not going to exceed it because we’ve got our own internal budget to work with.’
The Canadian dollar, where it’s at, is a factor for Canadian teams, and it’s a factor across the board, too. Let’s not get confused by these projections. They’re taking into account how some of these teams are going to be affected. You’re going to spend all this money. You’re making all this money. But what is the opportunity cost tied to spending that money for some of the lower feeder teams? Is that going to impact them negatively? If it impacts them negatively, then the overall revenue stream drops. And if the revenue stream drops, the cap’s not going to increase to those figures. It’s not like this is just going to continuously go, and in five years the cap’s $150 million, and the Winnipegs and the Columbuses and the Calgarys and whoever are all screwed. It’s not exactly going to be as black and white as that.
There are intricacies tied to this, to the financial calculations and projections that take all of this into account as well. You’re not going to screw over two other teams, simply because the league’s doing well overall, because that will negatively impact the revenue stream coming in for the league, and it’s negatively going to affect hockey-related revenues, which is the basis of all of this.
You can watch the full segment and entire episode here…