SAN JOSE – NHL Commissioner Gary Bettman indicated Tuesday that the league’s salary cap might only increase by another $1 million next season, a modest forecast that had been expected by at least one Sharks player.
Bettman said at the NHL’s Board of Governors meeting in Florida that as of now, the league is only projecting the cap to increase to $83.5 million next season. The cap was raised to $82.5 million before the start of this season.
NHL players still owe owners tens of millions of dollars after league revenues cratered two years ago during the COVID-19 pandemic. That debt, though, will likely be paid off before the 2024-25 season, allowing the salary cap to rise more significantly.
“Clearly it appears that if we don’t finish paying off the escrow this year,” Bettman said, “after next year it should be all gone and there shouldn’t be any issue about that.”
Teams and players split hockey-related revenue 50-50, per the terms of the league’s collective bargaining agreement with the NHL Players’ Association. However, since players still received their full salaries after the 2019-2020 season when revenues collapsed, they began to incur debt to team owners that had to be paid back through escrow.
Bettman projects the escrow balance to be roughly $70 million by the end of the season, down from $1.1 billion from the start of the pandemic in March 2020. Playoff games that season, and most regular season games the following year, were played without fans in attendance, severely impacting each team’s bottom line.
Bettman had hinted at the Board of Governors meeting in October that the players’ escrow might be completely paid off by the end of this season, and that the cap could increase by more than $1 million. That remains a possibility, Bettman said, but those bigger cap jumps remain more likely to happen before the start of the 2024-25 season.
The salary cap could rise by as much as $4 million in 2024 and $5 million in 2025.
“Would you like the cap to go up a lot? Yes. But I appreciate the situation that we’re in coming out of COVID,” Sharks center Nico Sturm said. “It could have gotten a lot worse. Players are about to pay back that debt we owe to the owners next year, and that’s a positive thing.”
The NHL’s salary cap increased from $71.4 million in 2015-2016 to $81.5 million for the 2019-2020 season. But the cap remained flat for the following two years and only rose by only $1 million for this season.
Sturm said the NHLPA recently said that after the 2023-24 season, the cap would begin to rise significantly.
“I think in the next five years, you’re going to see that cap jump quite a bit,” Sturm said. “Maybe not next year, but it’ll get up there pretty quickly.
“You always want more, sure, but I’m happy how everybody got out of that situation. It could have been a lot worse.”
Players paid 17.2 percent of their contracts in escrow last season, are paying 10 percent this season and will pay six percent next season.
“Of course, everyone wants the (salary cap) to go up,” Sharks forward Oskar Lindblom said. “Everyone wants to make more money, but at the same time, we get paid really well. To do so I think that it’s a bonus if it goes up.”
How the more modest cap increase might affect the Sharks for next season is not immediately clear.
Per CapFriendly, the Sharks, as of now, have over $61 million tied up in contracts for 15 players next season. They also have close to $6 million in dead cap money thanks to the contract buyouts of Martin Jones and Rudolfs Balcers, and the portion of Brent Burns’ salary they retained as part of the trade that sent the defenseman to Carolina.
Forward Timo Meier, a pending restricted free agent, is owed a $10 million qualifying offer next summer if he and the Sharks cannot agree on a longer-term contract. But considering the cap is expected to rise significantly in 2024-2025 and for years beyond, perhaps that opens the door for the Sharks to make Meier their highest-paid forward.
Right now, the Sharks’ highest-paid forward is Tomas Hertl, whose contract carries an average annual value of $8.137 million.
The $83.5 million cap could further complicate any potential effort by the Sharks to trade Erik Karlsson to another team in the offseason, at least in the short term, as several contending NHL clubs are already tight to the cap. Karlsson has four more years on his contract with an AAV of $11.5 million.
“You’d like the cap to go up and escrow to go down, right? But that only happens if the people in charge grow the game to the best of their abilities,” Sharks goalie James Reimer said.