The Salary Cap

Let's take a look at the salary cap and how it working. The league created the cap to create as much parity as possible, helping  "smaller" markets and eliminating dynasties.  If you look at the chart below, you can see how that strategy is NOT working.  While the days of winning four Stanley Cups in a row are long gone, there are still bottom feeders and there are still the elite and there is one distinction between the two groups.  Take a look:

I looked at the standings since the salary cap was instituted after the lockout of 2004-05 (that first year it was all of $39 million!).   Believe it or not, in the first few years there also was a cap on what you could PAY  a UFA, but that went away with subsequent collective bargaining agreements.

In the 11 years since the salary cap was instituted, you can divide the league into three categories.  There are the “Perennial Contenders”…the ten teams (including the Rangers) that have MADE the playoffs eight years or more.  There are the “Bottom Feeders,” or the seven teams that have MISSED the playoffs eight years or more.   Then, there are the “MOP” teams (Middle of the Pack).  These are 13 teams in the who are always within a couple years of a playoff appearance.

In the 11 years, seven different teams have won the Stanley Cup with only three repeat winners (Chicago, L.A. and Pittsburgh).  The truth of the matter is that the only teams that are consistently successful are the teams that SPEND TO THE CAP.   Those are the Perennial Contenders.   The teams that miss the playoffs routinely are the teams that are at the salary cap minimum.   Sure, there are woeful management decisions that affect a team’s performance, but the numbers don’t lie. 

The other distinction is the presence of elite talent on the best teams with players paid what they are worth and then surrounded with complimentary talent. If you look at the best teams in the chart they all have top tier talent (Toews, Kane, Malkin, Crosby, Kopitar, Datysuk, Lundqvist, Ovechkin, Thornton…the list goes on).   On the bottom ten teams on the list, can you name one All-NHL player on any of those teams?  Tavares is the only one that comes to mind…but he hasn’t been there since 2005 and his presence is reflected in the improvement of the performance of the Islanders the last few years. 

What the salary cap has done is that it has forced teams that are willing to invest to actually get rid of assets in an effort to lower the overall level of team talent in the league.  The problem is that the players that are divested end up with the better teams or as the only good players on bad teams so the rich stay rich and the poor stay poor. 

Now, look at that list of top tier teams and their markets. New York, Detroit, Los Angeles, the Bay Area, Chicago, Washington and Philadelphia.  Most of the top teams are in pretty sizable markets or are in northern hockey friendly states.   Now, look at the bottom feeders.   They are either small markets or in the deep south with a smaller fan base.  They include Arizona, Winnipeg, Columbus, Edmonton, Florida and Carolina.  The only market that defies explanation is Toronto.  According to Forbes Magazine, the Maple Leafs are third most valuable franchise after the Rangers and Montreal.   Wait, there is an explanation…the Maple Leafs have the worst management in the NHL (since changed) and a series of bad decisions have doomed the team to failure.

Here’s a key question that the NHL should look at.  Are dynasties bad?  Is having a team that everyone loves to hate necessarily a bad thing?  Does anyone look back at the success of the Canadiens, Islanders or Oilers as a black mark on the NHL?    The bottom line is when the big market teams do well, the league does well.

Look at ratings for the Stanley Cup Finals. Here are the Nielsen ratings for the nationally televised games (on NBC, not on NBCSN which has less distribution):

Notice anything?   Chicago, Boston, Philadelphia and New York…all do well.  The Anaheim-Ottawa rating is pathetic followed closely by the Devils-Kings and Carolina-Edmonton. It;s important to note that in 2006, 2009 and 2011 there was a game seven and that inflates the ratings for those series.  The highest rated Finals game since the salary cap was Game 7 between Vancouver and Boston.  That game garnered  a 4.8 Nielsen rating….until that game the series was limping along with a cumulative 2.7 rating. 

So, where am I going with all of this?  I believe that the salary cap has NOT helped hockey at all.  Great teams routinely have to gut their core to stay under the cap while the bad teams stay bad.  

Tampa is an excellent example of the evils of the salary cap. They have an outstanding team and they should be a powerhouse for years.   As of today (July 29)  they are sitting with $6.5 million in cap space and they still have to sign RFA's  Nikita Kucherov and defenseman Nikita Nesterov before training camp.   You have to believe that they want to lock up Kucherov and he will take money similar to what Mike Hoffman got from Ottawa ($5.2 million per year). 

So, they will spend all of their cap dollars on those two players.  They will field the same team that made it tot he Conference Finals this season and they will have an excellent shot at winning the Stanley Cup.  It’s next season that is the problem.  

Ben Bishop and Brian Boyle will come off the books, saving them $8 million.  Viktor Hedman’s salary increases by almost $4 million.  Andrei Vasilevskiy’s salary increases by $2.5 million.  That gives them $1.5 million to play with if everyone made the same salary as this year. 

Let’s also assume that the cap will go up by $5 million (very generous).  So….with their existing contracts they will have $6.5 million to pay any RFA’s on the roster.  Here’s the list: Andrej Sustr, Tyler Johnson, Ondrej Palat and Jonathan Drouin.   They’ll be lucky to get Drouin for that amount….so for the Lightning, they have one year to take the big prize before they have to begin a massive salary dump…trading a lot of talent off for draft picks.  Next year is when the Callahan contract starts to really hurt the Lightning.  They really have to win this year.

Looking at Florida who has their entire roster set (for the most part) and still have $4 million in cap space. Next season they would have that $4 million cushion, plus the estimated cap increase ($5 million) and $9 million in contracts coming off the books.  Aaron Ekblad gets a $6.5 million raise and Reilly Smith goes up $1.5m…leaving them with $10 million to spend on RFA’s Jonathan Huberdeau, Mark Pysyk and Alex Petrovic while deciding on whether they want to re-sign or replace UFA’s Jagr, Kindl or Kampfer.  Florida is headed towards a problem with a window that is closing fast.

The Penguins are fascinating. They are $1.5 million OVER the cap going into this season.  Next season about $10 million comes off the books, but they have RFA’s Matt Murray, Conor Sheary, Oskar Sundqvist, Derrick Pouliot and Brian Dumoulin to re-sign.  However, that $10 million in savings include their UFA’s  (Chris Kunitz, Nick Bonino, Trevor Daley). Could they reasonably assume that they could get those three players for $10 million?  Yes? Then they nothing left to sign their RFA’s.

Of course, by that time they will have dumped Marc-Andre Fleury giving them a little wiggle room.  The one thing in their favor is that they have another year of potential greatness and they are in possession of the silver chalice…so they get a huge pass.

Okay….back to the Rangers.  We all know their cap situation and how they got there.  You need to field a roster and stay within the cap.  That’s why Hagelin was traded.  But without the Stanley Cup, all of their machinations have been for naught.  If the Lightning don’t win this year, they will in the same boat…as will be the Panthers and our friends, the Capitals. 

So, my proposal is dump the hard salary cap and institute a luxury tax.  Go over the cap and you pay the poorer teams a tax that they have to spend on salaries.  That enables them to go out and sign the higher priced free agents, but it also enables the teams that are BETTER MANAGED to retain key players if they are willing to pay the tax.  Would the Rangers have paid a luxury tax to keep Hagelin and Stralman?  Would they have bought out Brad Richards? 

The team that wins the Stanley Cup is not necessarily the best team.  It is the team with the most luck, the best health and the deepest roster.  I’ve said it before, if the Rangers most creative forward wasn’t in the hospital speaking gibberish and their top three defensemen didn’t have broken bones in their feet, could they have beaten Tampa last year?  A completely healthy Ranger roster would have had a competitive chance against the Blackhawks (as they did against the Kings). I say yes. 

Where is it written that a team’s window in winning the Stanley Cup can only be 3-4 years before the cap handcuffs them and they become a team on the brink of missing the playoffs?   When you consider the success the Rangers have had in making the post season and then going deep (only four first round eliminations out of 10), you have to give some credit to the team management for doing their best to keep the team competitive.  Yes, the cap did force the Rangers into spending wisely and not throwing millions of dollars are the best free agent available…but a luxury tax would have much the same effect. 

Finally, is there anyone reading this who is not happy that the Rangers have been Perennial Contenders?  For all of the bemoaning the loss of first round draft picks, isn't it better to go into April with that hope that a tickertape parade in June is possible?  If you don't then go out and buy a Hurricanes jersey and get excited once every ten years. 

Later....