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Stagnant salary cap would present opportunity for NHL Seattle

In the lead up to the 2017 NHL season, the Vegas Golden Knights wheeled and dealed outside of the parameters of the Expansion Draft to construct a roster primed to contend right away. 

With the growth of the salary cap potentially stalled due to the COVID-19 pandemic, there’s an argument to be made that the NHL Seattle expansion team is in an even better position to prey on other franchises desperate to shed salary or protect star players, like Vegas did in 2017. 

During the general manager meetings in early March 2020, NHL deputy commissioner Bill Daly projected a salary cap between $84 million to $88.2 million. 

That was before things went haywire. 

About a week later, the 2019-2020 NHL season was put on pause. The pandemic still remains and there’s no end to the “pause” in sight. 

The upper limit of the NHL salary cap is determined based on the revenue accumulated by the NHL in previous seasons, according to CapFriendly.com. The NHL salary cap is a “hard cap” meaning there’s no leeway for teams to go over and pay a “luxury tax,” like the MLB and the NBA. 

If the regular season — or in a doomsday scenario, the entire Stanley Cup playoff, is cancelled, the lost revenue from ticket sales, TV revenue, etc. would significantly hinder the league’s seasonal revenue, and in turn, future season’s salary caps. 

According to The Athletic’s James Mirtle, the salary cap is unlikely to spike up as expected and in an absolute best-case scenario, it would rise by about $1 million, up to $82.5 million. 

Graphic by John Barr

Pierre LeBrun, also of The Athletic, asserted in mid-March that the salary cap dropping by millions would be “very unlikely” and the salary cap for 2020-2021 would hover around the $81.5 upper limit utilized in 2019-2020. 

Unless an NHL’s front offices also doubled as a public health experts, it’s unlikely NHL teams baked in a global pandemic into their team’s salary cap projections. 

This could potentially affect NHL Seattle in the lead up to the 2021 Expansion Draft in four different ways:

  1. There are myriad teams in salary cap hell and teams do not protect talented players with hefty salaries in an effort to free up cap space.
  2. Teams make “protective deals” with Seattle, ensuring Seattle selects a certain player in exchange for something else back. Vegas took advantage of several teams in the lead up to the 2017 Expansion draft with similar deals. For example: Anaheim would send promising defenseman Shea Theodore to Vegas in exchange for the Golden Knights selecting Clayton Stoner (and his $3.5 salary) in the Expansion Draft. Similarly, Columbus would trade William Karlsson to Vegas if they agreed to take David Clarkson (and his $5.25 cap hit). Neither Stoner or Clarkson would ever play in the NHL again and Karlsson and Theodore remain franchise cornerstones for the Golden Knights. 
  3. The other 31 teams take this upcoming offseason to shed salary and save cap space for the 2021-2022 offseason and the Seattle Expansion Draft. 
  4. The league steps in to provide some sort of relief for teams given the circumstances. There could be something similar to the amnesty clause that was prevalent in the National Basketball Association from about 2010 to 2016, in which one player could be released and their contract will be paid in full but won’t count against the salary cap. If imposed by the NHL, it would effectively be a “get out of jail free card” for any team.
Graphic by John Barr

The most auspicious scenarios for NHL Seattle are No. 1 and No. 2. It ensures NHL Seattle will either land an established and productive veteran — even if his contract is loaded with AAV (average annual value) and term — or acquire draft capital and quality prospects. 

It’s unclear whether NHL general managers will be wary of making protective deals after Vegas fleeced several teams in the process. 

But franchises were already eager to cut salary in 2017, even with the upper limit of the salary cap rising from year-to-year. 

Now that teams almost certainly won’t see the upper limit of the salary cap increase by 2021, teams may have no other choice but to swing deals with Seattle.

That is, of course, the real life scenario isn’t akin to No. 4 above, where the league provides relief for teams due to the unforeseen and unfortunate circumstances. 

When the season is finished or canceled, the ensuing offseason will shine light on just how advantageous this may be for Seattle. The NHL could provide relief to teams to mitigate how cap-strapped teams may be coming into 2021, but regardless, NHL Seattle will enter the 2021 offseason with the biggest weapon of any team: a blank slate of cap space. 

Josh Horton
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