Nov
15

The NHL Salary Cap Explained

Posted in Hockey Tips |

The NHL salary cap for the current season is $56.7 million, while the minimum team payroll stands at $40.7 million. Here is how this salary cap works:

Salary Range – The NHL fixes a salary cap and salary floor for each season. This means that a club’s total player salaries for that particular season cannot surpass the maximum limit or drop below the minimum.

Players’ Share – The salary cap is a percentage of all hockey related revenues. The salary cap, introduced in 2005, promised players 54% of estimated NHL revenues, which at the time, amounted to almost $1.8 billion. When revenues go up so do the players’ shares. For the 2008-2009 season, players are getting a little over 56% of total revenues.

Cheating on the Salary Cap – Any team guilty of hiding revenue faces a $1 million fine as well as the amount misreported for the first offense. Any further offenses are $5 million an offense, plus the amount misreported. Payments to players are in cash.

Counting the Cap – Expense calculations consist of daily totals from the first to last day of the NHL season. If a team does not exceed the cap for the season, it stays in compliance and is able to carry its current roster without exceeding the cap at the end of the season.

Counted against the cap – All players currently on the active roster, injured reserve or on the long-term injured list are part of the salary cap.

Not counted against the cap – Players assigned to the minors or whom return to junior hockey after signing an NHL contract do not count against the cap.

Contract buyouts – In a contract buyout, the team takes a cap hit for the percentage of the buyout value spread over double the remaining contract years.

Maximum salaries – the annual salary of a player must not exceed 20% of the salary cap.

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