Should NHL Cap Space Be a Tradeable Commodity?

With the economy in a downturn, the NHL insists it is doing what it can as an organization to make sure that the bleeding is short, and a small amount.

They haven't had to lay anyone off in any of their offices, but have acknowledged that they are in a "hiring freeze."

The salary cap, which has risen every year since it was instituted, is now to the point where the minimum is higher now than the cap maximum in the 2005-06 season.

However, it isn't expected to last.

At this week's Board of Governor meetings, Gary Bettman brought in a few economic experts to discuss the economic situation, and more specifically, what the NHL can do to ease the pain that will be surely felt by everyone.

The cap itself, has been rumoured since the season started to be on pace to remain "status quo" meaning, the $56 million dollar ceiling will not be any higher next season.

Two years from now, we could be looking at a cap ceiling lower than $56 million. Although it is hard to predict two seasons ahead (the economy is such a finicky thing) I am told by a few executives that the cap two years from now could be around $50-$52 million dollars.

With that comes questions, and lots of them.

What do teams with high priced, long-term talent do when the contracts don't exactly fit the numbers?

And what about the Canadian dollar, and what it will do to the six Canadian franchises.

Well, as far as the contracts, it could get messy, and there could be several teams that could be facing Tampa Bay type conditions, having to trade away pieces of top talent to make the cap.

The Canadian franchises? Well, most of them have bought "futures."

Futures are something Canadian franchises can buy that is pretty much insurance. 

Canadian owners can buy American money for their teams at a locked in rate. This means if the dollar goes up, or down, it won't affect the team.

There is of course a catch. Similar to the stock market, you have to know when the best time is to buy and lock in.

You also need to decide how long you want to lock in for.

It can get tricky, but it is in place to help the Canadian teams as best as possible.

Some Canadian teams are locked in all year long, while others only have half the year at the locked in rate.

So, that brings me to something though tricky, could be used in the future to help teams with cap troubles and also to make a run at the Stanley Cup.

We always hear that cap space is such a valuable commodity, but are we at the point where we can make it that much more valuable?

The following scenario, for your consideration:

The Los Angeles Kings have (rounded up) $12 million in cap space

The San Jose Sharks have a paltry $524,166

What is to stop the San Jose Sharks trading some draft picks to the Kings in exchange for, let's say, $3 million dollars in cap space.

The Sharks then turn around, and make a trade with team X for their rental player perhaps, and use him for their Stanley Cup run."

Now, I am not saying the Sharks need Kovalchuk, or that they are interested, this is simply for the purpose of the exercise.

All other sports leagues with the exception of the NHL make trades that routinely involve "Cash Considerations."

So, why can't teams make trades for other teams' cap space?

Well, there are a few nuances. 

First off, would it balance out?

An NHL team can go over the salary cap on any given day, so long as it balances out at season's end.

Also, there is the worry that it will create small market teams against big spending teams once again. However, as teams with large amount of cap space go, they usually aren't great on the ice. The addition of draft picks and players could help that cause.

The cap space would then reset as normal at season's end of course. There would also have to be a limit of cap space a team could trade for, say an extra three, possibly four million.

Of course it's much more complicated that the case I just presented to you.

This would have to be looked at by league exec's, lawyers, and other higher-ups.

Certainly what I have presented isn't perfect. In fact if you wanted to sit here and look real close, there is probably more wrinkles in this plan than in an elephant's behind.

However, in a time when the NHL and it's owners must be creative with their dollars, this could become a viable option.