The salary cap is hurting the NHL rather than helping it. While the league has never been so competitive, every team including the New York Rangers, has suffered and will suffer in the future. There is a solution.
We’ve made this argument before and it will only be a matter of time before the New York Rangers will suffer again under the cap. Mika Zibanejad‘s five goal game only guarantees it. It’s a sad story that has been repeated many times. Teams that draft well and develop their own talent ultimately will be unable to afford to keep those players
The salary cap creates a vicious cycle. There are no dynasties. Great players who command big salaries are doomed to play with lesser teammate. The very structure of NHL teams has changed. A handful of stars surrounded by cheap young players and a few useful moderately compensated players. When the young players price themselves out of the market, they are gone.
The salary cap myth
The myth of the salary cap is that it helps small market teams that cannot afford to spend big bucks on their players. The belief is that the salary cap prevents rich teams from spending wildly to sign the best players and spreads the wealth among all 31 teams.
Here’s the Wikipedia definition of the NHL salary cap: “Like many professional sports leagues, the NHL has a salary cap to keep teams in larger markets (with more revenue) from signing all of the top players and extending their advantage over smaller-market franchises.”
In reality, the ones hurt the most by a salary cap are the fans. The owners see their payroll limited so they can make more profit. The players will get paid, but may have to move to another market to reap the benefits. Meanwhile, the fans have to watch teams gut their rosters to stay under the cap. Good teams can only stay good for so long before they are forced into mediocrity.
Furthermore, it actually hurts the small market teams. When a team like Edmonton commits one third of their payroll to Connor McDavid, Leon Draisaitl and Ryan Nugent-Hopkins and then doesn’t want to spend to the cap, they are crippled even more.
The salary cap is why the New York Rangers had to trade Carl Hagelin for Emerson Etem. The Blackhawks had to trade Artemi Panarin to Columbus. It results in convoluted cap circumventing transactions like the trade of Patrick Marleau to the Hurricanes this summer. It’s why a lifelong St. Louis Blues player like Alex Pietrangelo will leave via free agency this summer. It’s why Brady Skjei was dealt for a draft pick. It’s why the New York Rangers are going to be forced to treat Henrik Lundqvist without the respect that he deserves. It’s why Mats Zuccarello couldn’t finish his career in New York There are countless examples of teams forced to trade players that they drafted and developed simply to clear cap space.
The Rangers situation
The New York Rangers are just a few years away from being in the same situation. With big bucks committed long-term to Artemi Panarin, Jacob Trouba and now Chris Kreider, the Blueshirts face a challenging future.
Did you all enjoy Mika Zibanejad’s spectacular five goal game? Well, listen to this. Zibanejad is under contract through the 2021-22 season at the incredible bargain AAV of $5.35 million. In the summer of 2021, the Rangers will face trying to extend his contract before he becomes an unrestricted free agent the next summer.
Zibanejad will have just turned 28 years old and over the last two season, he has established himself as one of the best players in the league. The Rangers paid Artemi Panarin $11.65 million per year at the same age for seven years. Should Zibanejad get any less?
Let’s say he signs for $11 million beginning in the 2022-23 season. In that campaign, the Rangers will have committed $37.25 million to four players. If we estimate that the salary cap will increase by about $3 million per year, the cap in 2022-23 will be about $91 million.
That’s 41% of the total payroll committed to Panarin, Zibanejad, Kreider and Trouba. The summer of 2021 will see the Rangers looking to lock up Igor Shesterkin and Ryan Lindgren ostensibly for the maximum eight years. The summer of 2022 is the year that the Entry Level Contracts of Adam Fox , Vitali Kravtsov and Kaapo Kakko expire and the Rangers will looking to ink them long-term as well.
If Fox, Kakko, Shesterkin, Kravtsov and Lindgren develop the way they are expected to the Rangers will want to sign them for as long as possible. But if they max out on their contracts, what’s left?
It’s going to be ugly when Kaapo Kakko, Adam Fox, Ryan Lindgren, Tony DeAngelo, Igor Shesterkin Brett Howden, Filip Chytil, Libor Hajek and Julien Gauthier hit that magic moment when they will expect to get paid. You can be sure that the Rangers will want to lock in some of those players, but will they be able to afford to?
Why not a luxury tax?
The truth is a luxury tax would be much more effective. Teams would be able to go over the cap, but would pay a tax to the other teams in the league, enabling them to spend more money on their own players. Teams would pay a price for bad decisions and it would hit the ownership where it hurts, in their wallets. Even the richest teams in Major League Baseball are trying to get under the salary cap and away from the luxury tax penalties.
Instead of the rich getting richer, they would spread the wealth.
It’s clear that a luxury tax will never be an option for the NHL. The owners will never abandon a system that limits their expenses. Ownership can get away with mediocrity by blaming the salary cap. In the NHL these days, winning one Stanley Cup gives a team a bye from being competitive for years. It’s why we will never see a dynasty like the Canadiens, Islanders or Oilers of the past.
Aha, a real solution!
So, here is a proposal that the NHL Board of Governors should consider and bring to the NHLPA when they negotiate the Collective Bargaining Agreement. It’s not radical and it will help and encourage teams to find and develop homegrown talent and most important, allow them to keep it.
It’s a simple proposal. When a team signs a player they have drafted or signed as an undrafted free agent, 25% of the salary will not count against the cap.
If you want to make it even more equitable, you can make the figure a rolling number between 20 and 25 percent and determine the total based on local taxes. Teams in states where there are lower taxes would get less forgiveness than teams in higher tax markets. This would eliminate the financial advantage teams in states like Florida or Texas or cities like Calgary and Edmonton have over teams in California, New York or Quebec.
At any rate, a 25% allowance for players drafted by the team will allow them to hold onto to home grown talent. True, Panarin was signed as a free agent and Zibanejad and Trouba came via trade so they all wouldn’t be eligible, but a lifelong Ranger like Chris Kreider would fall in the category. In his case $1.625 million of his salary wouldn’t count against the cap, money that could go towards keeping other players the Rangers have drafted.
There would be ramifications that the NHL and the NHLPA would have to consider. Teams would be more reluctant to trade players that they have drafted since they would lose the incentive. Inevitably, salaries would increase and that would be a positive for the union.
The importance of scouting and talent assessment for prospects would increase since there would be an additional long-term financial factor.
Think of the impact this could have. Teams like the Oilers and Maple Leafs could keep and pay their own players and surround those young stars with a better supporting cast. It would reward teams that do a good job finding and growing talent.
For the Rangers, they would actually have a chance to keep most of the young players who have joined them in this rebuild. That’s a plus for the team, the league and best of all, the fans.
The primary reason this works is that it rewards the fans who support the game, pay for the tickets and buy the merchandise. While Gary Bettman may think that it is a good thing that today, 19 of the 31 teams in the NHL are within 15 points of each other (from 70 to 84 points), try to explain to a youngster why his or her favorite player has been jettisoned in a trade “to meet the salary cap.”
This proposal is not a return to the days when teams spent money like drunken sailors in an effort to win championships. That didn’t work very well for the Rangers anyway, did it?
Commissioner Bettman and the NHLPA should consider it. There’s something to be said for a league that values loyalty and tradition and rewards well run teams. Do it!