PEBBLE BEACH, Calif. – A year ago things weren’t so great for the NHL.
The lockout was becoming more contentious and threatening to cancel another season, and there was concern about the future of the league. Most importantly, commissioner Gary Bettman said, “We weren’t playing.”
When the playing resumed, fans returned and the money came pouring back. Revenues increased so much that next year’s salary cap is expected to be roughly US$71 million, close to a 12-per cent increase from this season.
That’s an estimate, but it’s the figure Bettman delivered to the board of governors Monday.
“I said to the board there shouldn’t be any issue or consternation. If that’s the cap level, it’s because the revenues have gone up,” Bettman said. “We try to give people a sense of where we think it’ll come out, but it’s subject to a whole host of issues—ultimately how much revenue is generated, where the Canadian dollar is, because we convert to U.S. dollars. If you want a rough, rough, rough ballpark, OK, but it could change.”
Just being in the range of $71 million represents a major bounce-back for the league after the lockout. Teams were allowed to spend up to $70.2 million during the lockout-shortened season, but then the cap was set at $64.3 million this year in accordance with the 50/50 split of hockey-related revenue as set out in the new collective bargaining agreement.
General managers weren’t caught off-guard by the spike, even in the wake of the lockout.
“When you look at the league and where it’s going as a whole, it doesn’t surprise me because I think the league is doing and excellent job of building revenues,” Vancouver Canucks GM Mike Gillis said. “If it resembles ($71 million), if it’s close to that, it’s an indication the league is very healthy and clearly building in the right direction.”
That right direction was hard to predict a year ago. Fans were disgruntled and there was no way to know how the game would respond.
A 48-game sprint and memorable playoffs made the lockout feel like a distant memory. Last month the NHL reached a C$5.2-billion, 12-year Canadian television-rights agreement with Rogers Communications Inc., which the board approved Monday.
Things are going well, but Bettman did not want to take credit for leading the league back.
“Everything that’s happened is a testament to the enduring strength of our game and the passion of our fans,” he said. “Things build on each other. When you put the right foundations in place, when you have the right system, you bring in good owners, good things happen.”
Several general managers bought into Bettman’s notion that a higher salary cap is good for everyone because it means more money.
“I think you have to look at it from a holistic point of view,” St. Louis Blues GM Doug Armstrong said. “If the cap increases that means revenue is increasing and the pie is getting bigger. I think we all have to be excited about that.”
That even goes for smaller-market teams. The cap floor this season is $44 million, and it’s expected to be about $52 or $53 million next year.
According to CapGeek, the only team with a cap number of less than $52 million is the Florida Panthers. Winnipeg Jets chairman Mark Chipman said his team will be fine with the higher cap and floor.
“It doesn’t affect us,” Chipman said. “There’s a rising tide for sure and we’re quite comfortable with where we rank in terms of revenue production.”
For bigger-market teams like the Toronto Maple Leafs and New York Rangers, it’s just more money to spend.
“It’s always nice to have more money,” Gillis said, noting the Canucks will always spend up to the cap. “It doesn’t matter what you are. It’s nice to have more money. It gives us more flexibility to continue to try and improve and compete for a Stanley Cup. That’s our objective.”
It’s also the objective, league-wide, to make money. The Stadium Series, Winter Classic and Heritage Classic will help this year, and the exclusive-rights agreement with Rogers is expected to boost the salary cap significantly beginning in 2015-16.
The addition of that money helps offset the higher cap.
“It’s everything for us,” Calgary Flames president Ken King said. “We are a small-market team, that is obvious. this deal give us the opportunity to compete with larger-market teams. We’ve been a cap team since the system was implemented, but this new deal will give us the revenues to get there.”
The board’s approval of the Rogers deal during the first gathering of the two-day meetings at the Inn at Spanish Bay came as no surprise.
Having the salary cap projected at around $71 million, which Bettman confirmed includes a 5 per-cent escalator the Players’ Association is expected to use, was expected, too. The majority of questions surrounding the higher cap number had to do with perhaps a larger divide between the haves and the have-nots.
“Every business, every team has to sit back and look at their business model now and see where it fits in, where does the revenue sharing fit in?” Dallas Stars GM Jim Nill said. “How does that come into the model? That’s a new entity too now. That changed in the new CBA. We’ll all sit back and analyse it and go from there.”
New Jersey Devils GM Lou Lamoriello said the cap going up is good “as long as we can afford it.”
“I don’t think anyone is against paying for success,” Lamoriello said. “But you have to be able to afford it first.”
Other topics discussed on Day 1 of the board of governors meeting included a business update from chief operating officer John Collins and a visit from Adidas CEO Herbert Hainer. Adidas owns Reebok, which produces the NHL’s uniforms.
Player safety is expected to be on the docket for Tuesday.
Monday was all about money, and right now that’s a positive thing for the NHL.
“his is fabulous just the way the game has been growing,” Nashville Predators GM David Poile said. “As far as I can see it there’s just a lot of good things happening.”
Follow Stephen Whyno on Twitter at @SWhyno.