What are the chances the Cap goes DOWN?

[horseflyhab]

This would be horrible, but is it realistic? Would the players not use the escalator and see the cap go down? How the hell am I supposed to sign Kucherov if the cap goes down?

If it is looking like the cap is going to go down, I need to get out a head of it and shed some salary before the rest of the GMs in my league try to do the same.

What do you think?

[Axeman33]

I doubt it goes down but obviously it's a possibility. All depends on the players.

[Daydream Nation]

I can't imagine the players voting not to use the escalator. It would really decrease free agency payouts.

[Dobber]

I think the cap will remain about the same as this year, or as much as $1 million more. Not beyond that. But you should shed some salary if you can, regardless. It pays to be flexible

[chuckcouples]

I would say the chances of the cap going down are zero percent. In order for the players to agree to not use the escalator they would all have to agree that it is time to make people who don't have a contract for next season suffer. There is no chance of the NHLPA and all of its members agreeing to let that happen. Also, there is no way that league revenues are down from the previous season as last year was the first of the Canadian TV deal with Rogers. Finally, is Garth Snow actually stupid enough to sign a 4th liner to a contract worth more than $3M per season if he thinks they're is any chance of the salary cap decreasing?

[Samfolds]

Finally, is Garth Snow actually stupid enough to sign a 4th liner to a contract worth more than $3M per season if he thinks they're is any chance of the salary cap decreasing?

Admit it, you wanted us to let you know that he might actually be :P.

As for OP, I do agree that from my limited understanding of the CBA and the 5% elevator, why the heck would they not use it? My worst case scenario is the cap staying the same as it is today.

[Axeman33]

Admit it, you wanted us to let you know that he might actually be :P.

As for OP, I do agree that from my limited understanding of the CBA and the 5% elevator, why the heck would they not use it? My worst case scenario is the cap staying the same as it is today.

Because it comes out of the players paycheques, that's why they may not use it.

[Pit Bulls]

This would be horrible, but is it realistic? Would the players not use the escalator and see the cap go down? How the hell am I supposed to sign Kucherov if the cap goes down?

If it is looking like the cap is going to go down, I need to get out a head of it and shed some salary before the rest of the GMs in my league try to do the same.

What do you think?

Doubt the cap goes down but could remain stagnate or edge slightly upwards.

If I were you I'd move Hossa, Luongo & Riberio to shed salary for Kucherov. In a relatively small league (10 teams/19 active roster) there should be enough quality players on the WW to pick up if you can't trade them.

[Bass56]

Doubt the cap goes down but could remain stagnate or edge slightly upwards.

Ya, I'm with stagnate at worst.

[rataylor22]

There's too many high profile free agents with some power inside the NHLPA to not use the escalator for the players.

[Daydream Nation]

Because it comes out of the players paycheques, that's why they may not use it.

Where does the 16% escrow go?

[rataylor22]

Where does the 16% escrow go?

Back to the owners.

[LawMan]

Where does the 16% escrow go?

The salary cap is based on estimated Hockey Related Revenue ("HRR") for the upcoming year. so the 2016/17 Cap is based on an estimate for HRR for next season, based primarily on this seasons numbers. Since it's an estimate it's obviously not going to be perfect, the league formulates its estimate (which I believe is based mainly on the previous year) and then sends it to the NHLPA, the NHLPA can either accept the estimate or be optimistic and use the escalator to increase the estimate by 5% (the "escalator clause") the upside to using the escalator clause is that the cap hit is higher, the downside is that if HRR doesn't meet the estimate than players won't get paid the full value of their contract.

Since the cap is an estimate a percentage of every player's contract is taken off and placed in escrow for holding. At the end of the year the NHL and NHLPA reconcile the books and determine if HRR meet, matched or feel short of the estimate. If HRR exactly matched the estimate then the players would get all escrow money back, if the cap fell short the players get a percentage back, if the HRR exceeded the estimate I believe players would actually get additional money which would be paid by the teams. I believe in most seasons HRR has not met the cap estimate and thus players lose some of their escrow funds.

As an example let's take a guy who is set to be paid $7m in 2015-16. During the course of the season 16% (not sure if this is the number but for argument it will be) of every cheque is taken off and placed in escrow that's $1.12m over the course of the season. After the season the NHL does accounting and determines the actual HRR received during the season.

If the HRR received equals the estimate the player gets all $1.12m back
If the HRR received is less than the estimate the player will get a percentage back
If the HRR exceeded the estimate the player gets $1.12m + a bonus.

The exact percentages I'm not sure of but presumably if HRR is 95% of the estimate the player would get around 95% of his escrow funds.

So, if you're a current player on a long-term deal you don't want the cap to go up, or use the escalator clause because then the league has a more lofty revenue goal, and if that goal isn't met you'll forfeit some of your paycheque. That being said it's generally considered a benefit for the union as a whole that the cap go up, as players can then sign bigger dollar deals. Also, if your a player with an additional contract coming, even if its years away, you want the cap to be as high as possible.

The players have used the escalator clause every year but once, and that was early on when they might not have fully understood the impact. I suspect the players vote to use the escalator again.

[LawMan]

Here is a good article on TSN about escrow, it shows the percentages withheld, refunded and lost in the last 5 years:

http://www.tsn.ca/nhl-union-set-escr...-cent-1.374417

From the article:

Last fall, the NHL’s players received a refund of just a 3.76 per cent on the 14 per cent that was withheld bi-weekly during the 2013-14 season. In other words, players were paid 89.76 per cent of the salaries listed on their contract.

2012/13 and 2013/14 were bad years or players with them losing 14.66% and 10.24% of their salary respectively when HRR full short of the estimate used to set the cap. Losing 14% of your salary would hurt even if it's over a million dollars.

[Daydream Nation]

Thanks for the information LawMan. I am guessing it is an anonymous vote between the players. Most players with long term contracts would against it while free agents or soon-to-be free agents would vote for it. Would love to see what the percentage is for the vote.