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Wysh List: Abolish the NHL's hard salary cap!

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Published in Hockey
Wednesday, 26 June 2019 18:26

P.K. Subban and Patrick Marleau were both traded during the 2019 NHL draft last weekend. Or, perhaps you know them by their more popular names: Nine Million Dollars Against the Cap Through 2022 and Six Point Five Million Dollars Against the Cap Through 2020.

They are human beings, virtually converted into currency. They are treated like commodities. This is what a salary cap does.

"That's the hardest thing for fans and the players to understand. It's even hard in discussions for my own people to understand," Nashville Predators general manager David Poile said after the Subban trade. "I think cap space is very valuable. Some teams are up against it. And you're going to see more trades like this."

This is life in a capped league. This is what happened back in 2005, when NHLPA boss Bob Goodenow rallied his players and prepared them for an 18-month brawl with the NHL to prevent a hard salary cap from being established ... only to see cracks in that foundation just three weeks into the lockout, dashing hope that the players would eventually end up with a soft cap or a luxury tax.

There's no question that under the salary cap, the NHL has grown both in revenue and in scope. But if there were a soft cap and/or a luxury tax instead?

"The NHL would be healthier today under that system," one player agent told me this week.

As we prepare for another free-agent frenzy, we look at the pros and cons of the salary cap.


Pro: The salary cap provides "cost certainty"

When uttered by commissioner Gary Bettman, that phrase still gives me the shrinks. It was his rallying cry from 2005's lost season, a lament from the owners that the salaries they established had grown too high and, that the salary cap was the only way to save the NHL from [checks notes] their own utter greed and reckless spending.

The salary cap was seen as a stabilizing force. If currency fluctuated -- looking at you, Canadian dollar -- the entire league would shoulder the blow. If revenues rose or fell, the cap would be tied to that. Everyone knew how big the pot was and what was inside of it; it was just a matter of figuring out what percentage of that pot you wanted to spoon-feed your players.

And then here's the best part: The owners, through escrow, get that money cycled back to them. It's quite a shell game.

To that end, you'd have to say the cap has worked as planned. The NHL is a sturdier investment now than it was 15 years ago: There are 17 owners on the board of governors who weren't there in 2005. From 2007 to 2017, the average value of an NHL franchise rose from $220 million to $598 million.

As for the players, the average minimum salary in 2005 was $450,000; last season, it was over $700,000. The top salary in 2005 was capped at $7.8 million; in 2017-18, it was capped at $15.9 million.

Of course, it could have been much more.

Con: The salary cap limits earning potential

As agent Allan Walsh tweeted when the salary cap was announced last weekend: "The main purpose of the cap is to sign players to a below-fair-market-value salary, artificially lower than they would otherwise sign for without a cap."

This is demonstrably true on two fronts. First, that contracts are signed for a specific dollar amount rather than, say, a percentage of revenues. There's some extrapolation for salary growth when a player signs long term, but mostly there's just manipulation of salary in over to get the average annual value to a workable place under the cap. But mostly, and most obviously, salaries are kept below market value because the market isto established by the cap rather than by the contracts. If Connor McDavid signs for $20 million per season, there's your market. Instead, he makes $15 million in Year 1 and $10 million in Year 8, because the cap is the market.

Pro: The salary cap perpetuates parity

Parity? I believe Mr. Bettman's preferred verbiage is "competitive balance," which he recently said was at an "all-time high" in the NHL.

"For the seventh straight year, at least five teams made the playoffs that missed out in the previous season," Bettman said recently. "As you certainly know, the Blues were in last place in the entire league on Jan. 3 of this year. Now they're in the Stanley Cup Final, and that's nothing short of incredible. Every single team, and as important, their fans, come into a season believing they can make the playoffs. As we've seen, once you make the playoffs, anything can happen."

That "competitive balance" exists for two reasons: The NHL's ridiculous standings and playoff formats, in which mediocre teams smash a piñata filled with charity points to stay relevant; and the salary cap, which ensures no team is too good for too long, and that ensures talented players from those good teams will be shuffled off to other franchises due to salary-cap concerns. If you like a league with two to three great teams, two to three horrible teams, and a giant pile of average, and are holding a Stanley Cup playoff ticket in one hand and a lottery ticket in the other, then you might be a cap-head.

Con: So could a soft cap/luxury tax

To put it bluntly: The salary cap punishes the proficient to reward the idiotic. Teams that draft well, develop well, manage well ... heck, flat out play well are eventually going to have to churn their roster for having the nerve to compensate and retain their best players. The moment a team wins the Stanley Cup, Bettman should hand them one of those little credit-card folders with a bill inside of it, so they know exactly how many players they were going to have to ante up within the next couple of seasons to help those teams that can't develop or attract talent.

It doesn't have to be this way. A soft cap with a luxury tax would allow teams to remain successful by spending over the upper level and then paying a tax on that money -- and it can literally be at any rate the NHL deems appropriate -- that's distributed to the league's most financially disadvantaged teams, who then can turn around and spend that on talent to improve their clubs and, in theory, remain competitive.

(And for what it's worth, the money spent above the cap wouldn't count toward the 50/50 revenue split.)

But in all honesty, I'm so much less concerned with the dregs of the league than I am about the dynastic teams that earn their empire only to see it capped at the knees.

Pro: Weaponizing cap space is good for the game

How many good players and great draft picks have been moved due to the salary-cap pinch? Look no further than the NHL draft weekend, when all three trades -- Marleau to the Carolina Hurricanes, J.T. Miller to Vancouver Canucks and especially Subban to the New Jersey Devils -- were made due to cap considerations.

In the case of the Subban trade, the only reason the Devils won that derby was because they were able to take on the full freight of the contract. Save your top-line centers and puck-moving defensemen; it could be argued the greatest asset in the NHL today is weaponizing your available cap space. And kudos to the teams that manage their payroll so well as to have it.

Con: Actually, hockey trades are more fun

The salary-cap system has eliminated the simplicity of hockey trades. Sure, financial considerations were always a part of transactions, but not to the point where a trade couldn't legally be completed the way it is now under cap compliance rules. There are too many dominoes that need to fall in order to make deals. There are too many trades that fall apart due to cap restrictions.

And here's another reality: When salaries are held in check, or need to be, that's when you have to ante up trade protection. Which is a main catalyst for the sluggishness of the trade market. If you hate having to sit through eight hours of trade deadline coverage filled with more T-shirt cannon stunts and llamas than actual deals, then blame the cap?

The bottom line is that a team like the Vegas Golden Knights, who will clearly spend at all costs to win, are instead twiddling their thumbs trying to make a few salaries disappear. It's like walking into a casino and being told you have to sell three items on eBay before you're able to gamble.

Pro: The salary floor encourages spending

Fun fact: The salary floor ($60.2 million) is higher than the upper limit of the cap in 2010-11 ($59.4 million). It means that a team that maxed out its contracts nine years ago is a team just barely fulfilling its minimum obligations today. Which also means the NHL has seen some kind of revenue growth in the past decade.

The salary floor exists to ensure teams spend a certain amount on their players, in essence to ice a competitive team. It protects against a total gutting to save money or tank for picks or hollowing out the roster for a potential team sale.

Con: The salary floor is an illusion

One problem with all of that: The bottom-feeders are usually hitting the cap floor by acquiring dead cap space, like injured or retired players, which at worst means they're not actually attempting to be financially competitive under the spirit of the CBA and at best means they're using that open cap space to acquire draft picks that they can then turn into other cheaper labor.

Pro: The salary cap pits GM against GM

The salary cap levels the playing field a bit, so it's not just teams with the largest financial means that win out in trades or free agency. Essentially, this makes the NHL more exciting: It's the most creative, innovative and forward-thinking teams that win. Not just, like, "because they're the Yankees," with which baseball fans are well familiar.

Con: The cap pits players against players

"The NHL salary cap pits players against players. Currently, it's players under contract vs. restricted and unrestricted free agents, with respect to the upper limit and escrow," a player agent recently told me.

Had the players triggered the cap escalator, as is their right in the CBA, the salary cap would have been upward of $86 million next season. "You have these guys who paid escrow and supported other players before they signed their seven- or eight-year deals, and they're wondering where that support was for them this year," the agent said. "There's a fundamental unfairness there."

Pro: The salary cap is the most straightforward way to manage salaries

Cost certainty! It's really simple: There's a ceiling. There's a floor. Stay under the ceiling. Get above the floor. Hand out contracts that comply with the CBA. If you need to, share the salary-cap burden with another team after a trade. If you have to, pay off the cap hit if you buy out a player. Rinse, repeat. This doesn't require a NASA supercomputer to figure out. Just visit Cap Friendly.

Con: The salary cap kills creative accounting

Why is the salary cap so simple? Why aren't there more creative options for teams that seek to retain their talent?

For example: a "franchise tag" for a star player. Apply it to one player on your roster, and that player's cap hit comes off the books. What's the situation with the Toronto Maple Leafs this summer if they could "franchise" the $11.634 million average annual salary of Auston Matthews? Do they end up with Subban and Mitch Marner?

The verdict

Abolish the hard salary cap. Adopt a soft cap with a luxury tax.

There's no reason to punish successful teams in the name of faux parity. There's no reason why a luxury tax system couldn't ultimately benefit those teams closer to the floor. There's no reason why a smart approach to exceeding a soft cap -- like restrictions on what kinds of players you can have an overage to sign, like for example players your team originally drafted -- can't result in some semblance of fiscal sanity within a freer market.

Spare me the anxieties about what a system like this could mean for future work stoppages to "correct" the market. We had them before the cap. We've had them after the cap. What we don't have is an equitable system for good teams and great players.


The week in Gritty

Apparently not content with being the orange googly-eyed face of the NHL, Gritty has now moved on to making everyone openly weep with gestures like this one:

With due respect to Auston Matthews, Gritty should have gotten the NHL 20 cover. We all know this.

Three things about Roberto Luongo, upon his retirement

1. Two NHL players were the first to figure out social media. One was Paul Bissonnette, who transformed his career from fourth-line pugilist to viral comedic genius. The other was Luongo, whose @Strombone1 account went from playful anonymity to full-on reputation enrichment for the just-retired Florida Panthers goalie. It's stunning to think there was a time when Luongo wasn't one of the most beloved players in the NHL, at least for fans not centrally located in either Vancouver or Miami. After eight years of charming the pants off everyone on social media, that's what he is.

2. Here's the real trick to the Cult of Luongo: self-deprecation. I don't think he had much of it a decade ago, at least outwardly, and definitely not during the 2011 playoffs. But after losing Game 7 to the Boston Bruins, perhaps something changed. The first tweet on his account was the following October. From that moment on, Luongo loosened up and made himself the punchline more often that not. Good luck finding a handful of guys willing to do that in the league. It's why Lu was special.

3. I used to think that the "my contract sucks -- that's what's the problem" lament at the trade deadline was the realest real we'd ever get from Luongo. But then we got his Parkland speech. We don't talk enough about that Parkland speech.


Listen To ESPN On Ice

Emily Kaplan, Chris Peters and yours truly did a podcast at the draft with winners and losers. We also had an enlightening conversation with Hugh Weber, the president of the New Jersey Devils, in the hours after the Subban trade. Listen here.


Paul Marner, hockey insider

Rather quickly, Paul Marner, the father of Toronto Maple Leafs restricted free agent star Mitch Marner, has earned the reputation of being a Meddling Hockey Dad. Like when he told The Athletic last year, "It drives our family nuts when we hear you guys all talk about who should be the captain of the Toronto Maple Leafs and Mitch never hardly gets any consideration. It's because he's like this happy-go-lucky little kid."

Darren Dreger of TSN, rightly or wrongly, has earned the reputation of being a mouthpiece for sources. This was the case when Dave Nonis, his second cousin, was the general manager of the Maple Leafs. And this is apparently again the case in his reporting on Marner's contract kerfuffle with the Leafs, as everyone in Toronto thinks he's parroting Marner's father.

Seriously, look at these responses to his most recent news about interest in a Marner offer sheet being "brisk." About 500 of them are some variation of "OK, Paul" or "thanks, Paul." As our own Dimitri Filipovic noted:

Yeah, 'not great, Bob,' indeed.


Puck headlines

OK, I mean, if you're going to force me to go to Palm Springs to cover Seattle's farm team I GUESS I'll go to Palm Springs.

Ailish Forfar on how Hayley Wickenheiser inspired her hockey career: "Wickenheiser didn't teach me the mechanics, but she provided me with the inspiration. A meaningful connection to a positive female role model, Hayley instilled a drive inside of me."

Defending the Guy Carbonneau Hall of Fame selection. The Class of 2019 is whatever. At this point, after Vaclav Nedomansky was elected, the Hockey Hall of Fame is out of excuses for why Alex Mogilny remains on the outside looking in.

Long Q&A about Big Ten hockey.

Looking at the field for Joe Pavelski. I'll say it again: If there were a way to bring his leadership and postseason DNA and inject it into the Tampa Bay Lightning, that would be a coup.

The 10 free agents who won't break the bank. For you Patrik Nemeth fans. ($$$)

Hockey tl;dr (too long; didn't read)

Very cool feature photo gallery on women in sports, in particular in hockey.

In case you missed this from your friends at ESPN

Ranking the top 50 (plus) free agents. (ESPN+)

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