The NHL Salary Cap

Like most other professional sports the NHL has implemented a salary cap to control competitive spending. The cap has been in effect since the 2005 season when players were guaranteed 54% of the NHL’s annual revenue. Players get a larger share of the pot of annual revenue if the league makes more money. Essentially the success of the business pays off for the players similar to an employee-owned corporation.

Team salary expenses are tallied every day through the entire NHL season. If a team has a player on the books for a contract buyout, on injured reserve or the long-term injury list they must count that players expenses against the NHL salary cap. Players designated for assignment in the minor leagues or another amatuer hockey program like the Juniors are not counted against the salary cap. If a player is moved from one team to another, the new team assumes all responsibilities to the cap.

Many aspects of the salary cap are specific to a player’s situation, time in the year and age. For entry level players the maximum salary is $850,000. Veterans can earn as much as 20% of the team’s cap in the year that the contract was signed. Players over 35 can sign multi-year deals but their salary would be counted against the cap even in the event of retirement. Bonuses can be payed out in certain situations but cannot exceed 7.5% over the cap. Unlike many other professional leagues contracts cannot be renegotiated during the agreed upon period.