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How the NHL salary cap got set at $69-million

Pittsburgh Penguins' Matt Niskanen (R) attempts to tie up Boston Bruins' Brad Marchand during the second period in Game 4 of their NHL Eastern Conference finals hockey playoff series in Boston, Massachusetts, June 7, 2013.

JESSICA RINALDI/REUTERS

It was a difference of only $2-million (U.S.), but it had NHL general managers fretting all the same as the league attempted to finalize the salary cap prior to the draft.

On one side, there was a host of big-market teams – such as the Boston Bruins and Philadelphia Flyers – feeling the pinch, arguing for a $70-million-plus ceiling to bail them out with a little extra room and free agency approaching.

On the other, the small-market clubs were more concerned about the salary floor, which rises in concert with the cap and has forced teams like Florida to spend unwisely in the past to simply be compliant.

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But the biggest hurdle was getting the players to buy in and agree to a bigger number.

As strange as it sounds, the National Hockey League Players' Association fought for a lower salary cap, wanting it to be tied to last season's revenues, which ultimately came in at closer to $3.62-billion than the $3.7-billion that was rumoured during the Stanley Cup finals.

That lower revenue number would have meant a $68-million cap – a rise of only $3.7-million from last year – and it was that figure that had several GMs that expected it to exceed $70-million getting anxious.

The players' biggest issue with a higher cap number comes back to escrow. Players lost nearly 10 per cent of their paycheques last season due to it and didn't want to see that rise.

While raising the cap benefits the thin crop of players going to unrestricted free agency on Tuesday, it actually hurts all those with existing contracts, as the pool of money is redistributed each year based on revenues.

The behemoth new contract defenceman Matt Niskanen is expected to sign on July 1, for example, isn't so much a dollar figure as a shifting share of league revenues, a percentage that would theoretically be higher if all the teams bidding for him had more to spend.

Ultimately, the NHL and the NHLPA had to come up with a compromise on the cap number. The league's new collective agreement allows the two sides to factor in large new sources of revenue – like the 12-year, $5.2-billion TV deal they signed with Rogers that kicks in this fall – ahead of schedule when it comes to the cap calculation.

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Of that new money, there was roughly $100-million for next season alone that was above and beyond the previous Canadian TV contract.

Including all of that TV revenue growth would have boosted the cap $2-million to $70-million, which is what the league pushed for.

The NHLPA's resistance, however, led to them including only half of the Rogers cash for 2014-15, which is how they settled on a $69-million cap and $51-million floor.

That's good news for the free-agent class of 2015.

Factoring in all of the new revenue this weekend would have meant no sizable boost a year from now.

As it currently stands, the 2015-16 salary cap should now easily exceed $74-million.

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Which means that whoever next year's Niskanen is can be just as handsomely rewarded for making it to July 1.

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About the Author
Hockey Reporter

James joined The Globe as an editor and reporter in the sports department in 2005 and now covers the NHL and the Toronto Maple Leafs. More

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