For a National Hockey League team to hoist the Stanley Cup, it requires playing 82 regular-season games, winning four playoff series, and paying strict attention to math along the way.
The NHL, two of the four major North American sports leagues, implements hard salary caps, meaning each team’s payroll cannot exceed a predetermined amount in a given season.
2024-25 seasonthe salary upper limit is US$88 million and the lower limit is US$65 million. So whether a team is worth as much as the Toronto Maple Leafs ($4 billion) or as low as the Columbus Blue Jackets ($1 billion), every team in CNBC’s official NHL team valuations They are all on roughly equal footing in terms of the money they can make. Paying players.
The range is calculated using a formula outlined in the league’s collective bargaining agreement, which involves a percentage of preliminary hockey-related revenue from the previous year as well as other inputs.
There was a brief pause in year-over-year salary cap increases as league revenue took a hit during the Covid-19 pandemic in the 2020-21 and 2021-22 seasons.
The salary limit has been in effect since the end of a labor dispute that resulted in the cancellation of the entire 2004-05 NHL season.
Following that game, the National Hockey League Players Association and the National Hockey League reached a collective bargaining agreement (CBA) that included a salary cap for the coming season, among other provisions. The current CBA was implemented in the 2012-13 season after labor disputes shortened the schedule to 48 games.
The NHL and NHLPA declined to comment for this story.
Sports business experts say a strict salary cap has helped the league’s financial health since the entire season was suspended.
“The NHL’s financial situation has stabilized significantly since that (missed season),” said Rick Burton, a sports management professor at Syracuse University who co-authored the book “Business.” I think a lot of leagues are probably impressed with the way the NHL operates. “The NHL Way: Lessons from the Fastest Game on the Ice. ”
Burton pointed to improvements in team valuations, attendance and payroll health as ways the NHL has found success over the past few decades.
He added: “I think the end result, looking back over the past 20 years, is that both parties worked together to find a solution that seemed to work very well.”
A hard salary cap is distinctly different from Major League Baseball and the National Basketball Association, which do not impose a salary cap. salary hat and a soft respectively, salary caps. Both leagues have some form of fee that teams must pay when they exceed a certain threshold.
The National Football League and NHL both have strict salary caps that sports leagues have traditionally used to maintain parity and prevent the wealthiest teams from stealing away top talent.
“If you have a business that limits the amount of money wealthy owners can put into players, then smaller clubs are going to be able to compete with them,” said Irving Kirchner, a sports lawyer at Herrick Feinstein and co-chairman of the league. Wealthier Clubs Compete,” the firm’s sports law group.
This is not to say that payroll management is not important in other sports. Major League Baseball’s Los Angeles Dodgers have reportedly modified Ohtani’s contract, deferring $680 million of the $700 million deal, most of which won’t be paid until 2034. sporty. The NBA’s New York Knicks got a huge break when star Jalen Brunson agreed to take more than $100 million less. contract extensionAccording to ESPN.
But a hard cap means NHL teams have to be especially diligent.
There are a few exceptions to the NHL’s $88 million cap, one of which is the long-term injury clause, which allows teams to exceed the cap while a player is injured. But once an injured player is healthy and ready to rejoin the team, the team must be at or under the salary cap.
The memorandum of understanding extending the current CBA expires in September 2026, and the league and NHLPA will negotiate a new CBA. NHL Commissioner Gary Bettman said at this year’s NHL Board of Governors meeting that the NHL plans to begin negotiations with the NHLPA in early 2025 Meeting.
