Insider Trading: Just how high could the NHL salary cap go?

The TSN Hockey Insiders join Gino Reda following the second day of the NHL BOG meetings to discuss how projected revenue could impact the salary cap, when serious CBA talks could begin, global expansion and potential changes to the NHL schedule.

Gino Reda: Gary Bettman mentioned the figure $7 billion when talking about the potential revenue in the NHL this season. What are the ramifications of that? How, specifically, could that affect the salary cap? And could we see the single biggest boost in the salary cap since COVID?

LeBrun: It's possible but it remains to be seen and what happened on this day is that Gary Bettman and Bill Daly and the NHL presented owners with two distinct scenarios. One is, they stick with the current formula in the CBA as far as next year's salary cap goes, a five per cent increase, which brings it from $88 million to $92.5 million. The other scenario would be, however, would be entering negotiations with the NHLPA to tweak the formula and bring in a phase-in element to a higher salary cap. 

The concept for the phase-in is that the revenues are dramatically rising over the next couple of years and what the league, perhaps, wants to avoid is a giant jump in the salary cap in one year only. So, the phase-in makes sense but it remains to be negotiated with the Players Association. I can tell you there are owners that were very intrigued by this conversation, like Craig Leopold, owner of the Minnesota Wild. He's got a pretty big contract negotiation this summer with MVP candidate Kirill Kaprizov so it makes a difference whether the cap is at $96, 97, 98 million or whether it stays at $92.5 million. 

When we leave this meeting every year, usually we have a cap number locked in for next year. That's not the case now. Owners have to leave this meeting knowing they have to be a little nimble. 

Reda: The owners know that CBA talks are closer than they are further. The current CBA expires in September 2026 so there is a lot of time. Today for the first time Gary Bettman threw out a date where maybe the serious negotiations can begin?

Johnston: Yeah it sounds like February which is a convenient time, of course. The NHL and NHLPA will have a lot of time to be together. They're co-hosting the 4 Nations Face-Off during that window. One thing Bettman mentioned is, it doesn't have to be a formal start date and a formal end. There's an ongoing dialogue and in the process of organizing that tournament, talking about the IOC and IIHF about the 2026 Olympics, they're getting to some of the issues on a more informal basis. This is such a unique experience. 

We're 21 months out from the end of this agreement and everything just seems so positive. Even Gary Bettman, the way he addressed reporters after the Board of Governors meeting. He was careful not to say too much, he didn't want to pre-suppose anything very deferential to the NHLPA, I think that's a great sign as they do formally look to get those talks underway.

Reda: Whenever the Board of Governors comes together, there's always expansion talk, either in the room or in the halls. We saw a group here from Atlanta basically doing some early lobbying. Nothing official on that point but, Dregs, could the NHL be looking to expand well beyond North America?

Dreger: No question about that. There are untapped markets, right? You think of China, you think of Europe and when I say untapped it's not necessarily from a competitive aspect but you could see, down the road, an affiliate league with a team in Prague or Sweden or China. It seems a bit strange because the National Hockey League probably doesn't want to create another competitive playing field for a player who maybe looks at the NHL differential differently than he does in his home country.

We're talking about the finances here. I think there's a fair comparison to what's going on with the NBA. The NBA has done a masterful job of maximizing merchandising dollars in other parts of the world. The NHL has failed in comparison. 

There was an extensive presentation generated and based on what the NHL can brainstorm to improve that sort of idea, the financing behind it, and the future of bigger dollars.

Reda: Another hot-button issue seems to be the schedule, in particular handing out the Stanley Cup in late June. It seems like everybody across the board would like the see the Cup handed out earlier, but what does that mean for the start of the season with a shifting schedule?

Panthers celebrate Stanley CupLeBrun: It's a hot topic because it's ridiculous how deep the season goes. A lot of people don't like it. There should not be a cup awarded on June 24, like we had last year. We reported on this before. The league and the NHLPA have had very, very preliminary discussions about what the world might look like with a different format to the schedule with a shortened preseason, move to 84 regular-season games per year, change some of the format and, yes, award the Stanley Cup earlier in June, which would let the league breathe a bit more in the offseason. And perhaps, although I don't think it's a No.1 priority for the league, start earlier in October. Although I think ESPN and TNT would have a word in that.

The bottom line is that even though Gary Bettman downplayed the significance of the possibility of a new schedule. It's still very much in play and it's something the league intends to talk about with the NHLPA.

Dreger: Right, but NHL general managers are likely asking, 'Okay are you adding days to the schedule?' because that's a big issue right now. It'll be a bigger issue because of the international events in play next season. The schedule makers will have to deal with 14 fewer days to work around that schedule as early as next season.

We know GMs and coaches complain all the time that they don't have practice time and there's too much stress on the players so the schedule is a bigger deal in all aspects. 

Johnston: One other item of note is that the governors were shown some of the numbers from that Face-Off series, the behind the scenes show they did last year, and they hit it out of the park. So, while no deal is formally done at this point, the expectation is that there will be a second season this year.