The NHL has been the least relevant major professional sport in America for more than a decade. For a brief moment in 2004-05, it got top billing on sports talk radio, SportsCenter and sports pages coast to coast. This unheralded coverage, however, was due to a forced lockout and not to anything spectacular on the ice.
Ironically, the NHL became more exciting to sports media during the lockout, when no actual hockey was being played. The key sticking point of the lockout was a disagreement over a proposed salary cap. Ownership groups throughout the league desired cost certainty in the future, and players did not want to have their salaries artificially constrained.
Ownership won, for the most part, and now the NHL is a salary cap league, meaning that spending on an NHL team's roster is limited. This year's salary cap is $56.7 million, and the minimum amount that a team is required to spend is $40.7 million.
Hockey fans who remember the bad old days before the lockout may think that these numbers look a little bit small. After all, the reasonably successful (and free-spending) 2003 Dallas Stars spent just over $60 million in an era when league revenues were considerably lower. Under the current cap, no team is allowed to spend near that amount. And yet undeniably, the level of play in the NHL has gotten better since the lockout and the talent pool is far deeper. Put on any classic hockey game from the early 1990s and it looks like the players are standing still.
Despite the potential threat of poaching from the Kontinental Hockey League and other international leagues, the threat of large-scale defection in today's hockey landscape is pretty remote. Despite payroll dropping, the league, its players and its teams are healthier than ever. There are a few reasons why.
Teams are locking up their young stars early, spending lots of money and years to do so. Forward Mike Richards of the Philadelphia Flyers signed a deal through the 2019-20 season at an annual value of $5.75 million per season. That number is not a typo.
Richards is a gifted two-way center who popped in 75 points for the Flyers last season, a very nice campaign for the 23-year-old. However, 2020 is a long way off, and there is always a chance that a player can get Eric Lindros-ed and suffer career-ending injuries.
There are buyouts to guard against the Eric Lindros Experience. Teams are exercising buyouts far more frequently. This clears the player's salary off the cap for the season. For instance, the Boston Bruins were having trouble in the offseason making it under the cap. Since nobody would take any of their horrid contracts off their hands (even on waivers), they chose to buy out old man winger Glen Murray, who was costing them over $4 million for a 30-point season and the disturbing worry of injury.
Buying out Murray meant the B's were on the hook for the cash, but they did not have to include his contract against the cap, giving them another $4 million in cap space to figure out some other options who were not washed-up, 35-year-old, injury-prone snipers.
With regard to the Richards contract, if he comes down with a string of concussions in 2018, the team can always spend the money to buy him out and free up the cap space. Buyouts are viable options for teams like Philly that have the extra cash above and beyond the cap limit. Teams like the Nashville Predators may not have the same options open to them and may not be able to compete in terms of long-term contracts due to their inability to self-insure.
The other option for eating an unfavorable contract is the added-value trade. Teams may trade players who have horribly oversized contracts to another team and add something of value, like a late-round draft choice, or include an exchange of prospects in the deal. Prospects and draft choices have gotten far more important in the new NHL.
In order for a team to be competitive, the bottom of the defense corps and the third and fourth lines need to be nearly all homegrown, young and cost-controlled. Add in a few young frontline players of local variety, millions of dollars for a couple free-agent forwards, a puck-moving defenseman and a good goaltender, and suddenly your team is right against the cap.
Developing good, young checking line forwards frees up cash for better uses, boosting the value of otherwise mediocre prospects and draft choices. Moving a bad contract at the cost of one of these young prospects or a draft pick also frees up cash for better use.
Buyouts, waiving and added-value trades are great ways to get rid of guys that are too expensive, too old or too injured to fit on your squad. These sorts of deals will increase as general managers become more adept at working within the constraints of the salary cap system. Of course, just as in the financial markets, general managers often find themselves with illiquid assets.
Take the case of Dale Tallon, general manager of the Chicago Blackhawks, and former No. 1 goalie Nikolai Khabibulin. The Bulin Wall has gone the way of his namesake, and $6.25 million for an old goalie who has pretty much lost his touch is a bit steep. Unlike the Bruins with Murray, Tallon's Hawks have shown themselves to be very inflexible and unwilling to conform to the realities of the situation. Despite a strong, young roster, the Hawks have needlessly put themselves in a disadvantageous position because of their inflexibility with the cap.
In the new NHL, sometimes cap-space management can be more important than assembling a roster.
