The Rangers’ cap situation is very, very bad

There is a belief that the New York Rangers are swimming in cap space.  While they are in better shape than most NHL teams, they are headed in a very bad direction and they will be in dire straits as soon as 2022-23.  You want to know why they gave away Pavel Buchnevich?  Because in one year they would not have been able to afford him.

The Rangers will soon be paying the price for all of their young draft picks maturing and becoming either arbitration-eligible Restricted Free Agents (RFA’s) or Unrestricted Free Agents (UFA’s). The very reason that they are in okay shape this season is why they will be in trouble in a year.

In looking ahead, the expectation is that the salary cap will remain flat next year with the first time we see it going up in 2023-23.  However, it may only go up by $1 million.  Here’s why.

When the owners and players signed their Memo of Understanding last summer, the players agreed that the salary cap can only go up by $1 million until the escrow debt is paid off.  Because of the loss of revenue during the pandemic, the escrow debt (money owed by the players towards the 50/50 revenue split) could be as much as $800 million.  That’s even with the increased revenue from the new television rights deals.

So, the bad news is it is very likely that the salary cap will go up by $1 million a year for the four or five years starting in 2022-23.  That’s bad news for every NHL team and it will hit the Rangers very, very hard starting next summer.

There’s also another intangible that we don’t have information on.  That would be what kind of hit the Rangers will take for performance bonuses.  We still don’t know how much the Rangers had to pay out to their players on Entry Level Contracts (ELC’s) and if that will result in a overage penalty next season

What does it mean for the coming season?