Earlier today, the NHL and NHLPA announced what the salary cap and floor will be for the 2015-16 season. Here's the NHL's report that mentions it, and here's the NHLPA's release - both links are from their respective websites. The salary cap will be set at $71.4 million. The salary cap floor is $52.8 million with a midpoint of $62.1 million.
What both of those sites don't mention but other reports do mention, such as Tom Gulitti's post at Fire & Ice about it, is how the cap increased from $69 to $71.4 million. The NHLPA collectively decided to enact a full 5% cap escalator. Without it, the cap ceiling would have dropped for the first time to $68 million since the cap was implemented for the 2005-06 season. Why would it have dropped? This short report by Pierre LeBrun at ESPN notes that the weakening Canadian dollar was the key factor. As the seven Canadian teams in the NHL are major drivers of league revenue, a weaker currency up north hinders total revenues. Why did the union vote for the escalator? As I understand it, it's to avoid the effects of a lower cap. That could effectively shut some members out of a job and limit earnings for those becoming free agents. So the members of the union felt that was a worse option than requiring more for escrow, which most players do not appreciate as it means less take home pay (as I understand it).
In any case, this is a Devils blog so the important question to ask is this: how does this effect the Devils? Even if the cap didn't change at all, the Devils would be entering this offseason with plenty of space. In fact, as of right now, the Devils have just under $47.9 million committed to the salary cap per General Fanager. That's $23.5 million of cap space; and more importantly, below the cap floor. That won't last. The Devils only have fifteen players signed among their NHL roster. Plus, Adam Larsson and Eric Gelinas are restricted free agents. Re-signing both of them alone could get them right below the cap floor. As they'll still need more people to fill out the roster, it'll be easy to exceed $52.8 million along with those two deals alone.
It is because of this salary cap space, why I keep suggesting in my posts about impending unrestricted free agents by position, the Devils can make a splash. I don't think there are too many free agents that they should spend a lot on. I will agree that the UFA class outside of defensemen is weak. However, they can afford to do so and it could be justified with the idea that the player would likely still be a valued contributor when the team has been re-built. What also could be justified is to take on a bad contract in exchange for an asset like a draft pick or a prospect. With multiple teams in a bit of a crunch even with a salary cap of $71.4 million, the Devils could leverage that to their benefit. Likewise, the Devils could choose to bank most of this cap space. The team isn't going to be playoff-ready in 2015-16. Therefore, they should be modest with their spending for the future. As the team gets stronger in terms of prospects and establishes a new direction, they can spend that space when there's a better class of free agents. Or to make a big deal later on in the season. If I were in Ray Shero's shoes, I'd go with the latter option. That said, if a Mike Green or Michael Frolik is available, then it'd be hard to say "not interested." All the same, the Devils can afford to choose a number of paths. Again, they're re-building.
As the NHL Draft is just days away, today's news was at least a reminder that the offseason is truly upon us. This figure will surely drive some of the moves and discussions made from now through next week. I want to know what you think. Do you agree with the PA using the cap escalator? Do these salary cap limits change your opinion on what the Devils should do this summer? How would you want the team to use their cap space? Please leave your answers and other thoughts about the cap in the comments. Thank you for reading.