The NHL's Salary Cap Conundrum
It appears that, with the current economic meltdown, many NHL teams who have committed to long-term high dollar contracts could be in one hell of a position in the next year or two.
A team like the Flyers has committed some $54 million to the 2009-10 season and another $43 million allocated to only 13 players in 2010-11 when the cap is expected to take the biggest hit.
Of course, there are many teams in the NHL who have spent wisely and kept their books open to fluctuations in market conditions. These GMs, under the current system, may be in a position to do some bargain hunting to help those teams that will be in deep cap trouble.
However, what happens to those players who have been given a huge long term contract and become virtually untradeable? It's not impossible that Ovechkin's salary could end up being one-third of the entire Capitals' salary cap.
As we all know, the last CBA gave the owners/players each their own portion of the income to be divided at the agreed-upon terms. So, what happens when the players have priced themselves out of the salary cap and it becomes impossible for the teams to move enough salary around to cap requirements?
Since the league decided on a floating salary cap with escrow, players this year and next are going to end up putting money back in the owners pockets. I'm not too sure why they decided to go with the floating cap. Why not have a fixed cap of, say, $50 million?
With the use of escrow accounts, the league/players are still guaranteed their piece of the pie. However, each team always knows the salary cap is $50 million and can plan spending within that range. If the league does really well, each player's salary would be increase by a prorated amount, and if they do poorly the same would happen in the opposite direction.
Of course, I'm sure the players would be totally against this, as they constantly want their salaries to go up.
No matter what the outcome of the economic slowdown and its effect on the salary cap, it will certainly be an interesting year or two watching GMs squirm.
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