The good news is, the salary cap could increase by $1MM for the 2022-23 season. The bad news is, significant movement of the upper limit is not expected until 2026-27. Frank Seravalli of Daily Faceoff reports that the league is projecting a $4.8B hockey-related revenue for the 2021-22 season, which will actually mean the escrow debt that the players owe will actually increase. Seravalli expects there to be a $1MM increase in each of the next four offseasons as the revenues bounce back and players are able to pay off the $1.1B in debt.
When revenues dropped significantly last year, it caused a huge discrepancy in the normal 50-50 split between player salaries and owner revenues. Suddenly, players were being paid much more than their allotted half, meaning the difference would have been held in escrow. In the CBA negotiations that took place last year, the players and owners agreed to a salary deferral and fixed escrow rates, in exchange for a (relatively) flat cap until those debts—the ones caused by player salaries far outreaching 50% of hockey-related revenue—were paid back. Seravalli reports that the balance owed is expected to reach $1.1B after final accounting of the 2020-21 season.
If there are just $1MM increases in each of the next four offseasons, teams will have to be extremely careful how they spend money. Seven teams are already over the cap ceiling for next year, and though long-term injured reserve can help some of them, there’s just not a lot of wiggle room to work with. It also may explain why three teams are currently under the lower limit, with money still to spend to get to the cap floor of $60.2MM. Thirteen teams currently have cap commitments of less than $70MM for the 2021-22 season, giving them room to operate moving forward (while keeping costs down in the meantime).
A $1MM increase may seem like a good thing after three years at the same $81.5MM, but the squeeze is going to be apparent quickly as we move through the next few seasons without any meaningful change.