Last week, I wrote an article detailing the Flyers’ salary cap situation and how the outlook may not be imminently dire. While the Flyers may end up being okay under the current set of rules, this got me thinking about the salary cap as a concept. The NHL has instituted the salary cap for the majority of my hockey fandom, therefore I never thought of it as anything out of the ordinary. But I have come to the realization that abolishing or altering the salary cap would allow for a number of key changes which would, in my opinion, strengthen both the NHL and the game of ice hockey.
The salary cap is a set limit on the amount to which a club can pay its players. It was first implemented for the 2004-05 season with the introduction of a new collective bargaining agreement after the lockout — the cap was set to $39 million. From that point onward, the cap has been calculated as a fixed percentage of total league revenue from the previous season. This percentage currently stands at 57% of league revenue. The cap is meant to prevent teams in larger markets with larger budgets from taking advantage of teams in smaller markets and is enabled by league wide revenue sharing. This revenue sharing distributes income from the higher income generating teams to the lower income generating teams who wouldn’t be able to spend to the cap without this system. To quote On the Forecheck:
It’s not simply a temporary assistance scheme for franchises going through a rough patch, it’s a recognition that some markets are much, much bigger than the rest, but the league wishes to restrict the payroll range to some extent.
Despite the positive intentions, in its current state, the salary cap exists as a concrete obstruction to the prosperity of the sport. Other sports have struggled with the concepts of implementing revenue-sharing methods — baseball instituted a luxury tax and both the NFL and NBA have salary caps, albeit they function differently from the NHL’s version and they are set at a much larger figure. This is to be expected as the NBA and NFL make more money than the NHL, quite significantly so. However, with the NHL, there are a number of reasons why the salary cap is fatally flawed. In no particular order of importance, the salary cap allows unpopular teams to thrive, obstructs teams from constructing an optimized roster, creates unfair trade markets, and prioritizes undervaluing players.