With the CBA recently ratified by the NHL and the NHLPA, we’ve taken the opportunity this week at AAtJ to look at the implications of some of the outcomes of that agreement, particularly as it relates to the salary cap ceiling and its impact of the Devils and teams around the league. The Devils, as I’m sure most of you are near-painfully aware, are a team currently blessed with plenty of cap space. John went through the gory details of the cap ceiling over the next several years on Monday, but the upshot is that the cap is not going much of anywhere over the next few years, even with the rosiest of revenue projections in our current environment.
As part of that CBA agreement, the players and owners also agreed to a bump in the league’s minimum salary, going from the current $700,000 up to $750,000 for the next four years (and then creeping up from there). Now, $50K may not seem like a lot — and for most teams and most situations, it really isn’t — but for cap-strapped teams that have to fill out the bottom of their rosters with cheap signings to limbo under the cap, it can add up. Put together four or five contracts that were previously league minimum and will have to be bumped by $50K and all of a sudden, $200K+ of cap space just disappeared. For teams that were already bumping up against the ceiling, life gets a little bit harder as the cap not only stays flat, but effectively goes down slightly now that those cheap deals are more expensive.
John ran through some of the teams hardest-pressed to get under a flat cap in the near future on Monday, including Arizona, Toronto, Vancouver, and Las Vegas. All of those teams will struggle mightily to fill out their roster and stay under the cap in 2020-21, and with the minimum salary going up, they will be squeezed ever so slightly more. Other teams, like St. Louis are also crushed against the cap and some others like Washington and Pittsburgh have a little bit more wiggle room but could be forced into making tough decisions as well.
This increase in minimum salary wont affect everyone equally, even among those cap-crunched teams. The way that these teams have constructed their rosters could have some impact on how the minimum salary impacts them. The team with the biggest problem on their hands appears to be the Maple Leafs, and a quick analysis of the bottom of their salary structure will show you why. The Leafs have an extremely top-heavy salary structure right now, with three of their top forwards (Auston Matthews, John Tavares, and Mitch Marner) having an eight-figure cap hit. This has obvious down-roster implications and things are likely going to be difficult for this Leafs squad, cap-wise, in the near and mid-term.
To get themselves to fit under the cap last season, the Leafs went to the well of cheap depth players to fill out their roster at the bottom. To illustrate this point, here are the seven(!) one-way deals the Leafs inked last year that are now below the new league minimum (via CapFriendly).
- Michael Huchinson ($700K)
- Martin Marincin ($700K)
- Kevin Gravel ($700K)
- Jason Spezza ($700K)
- Kenny Agostino ($737.5K)
- Garrett Wilson ($725K)
- Pontus Aberg ($700K)
The Leafs had another handful of two-way deals that brings them up to 10 total standard contracts that would need to have a higher cap hit in the upcoming season. For just the one-way deals listed there alone, the Leafs would potentially add close to $300K in cap hit alone. Now, this is not a straightforward impact — the Leafs ended up burying some of those players for portions or all of the season in 2019-20 — but even if only the equivalent of four or five of all of their league-minimum guys are on the roster for the season, that adds up to $200-250K of cap space that the team just lost (or roughly one “Ilya Kovalchuk cap recapture penalty”). For a team that has south of $5M in cap space and seven contract spots to fill to have a complete 23-man roster, that can be a hindrance.
The Leafs are so crunched by the cap right now with 16 contracts and $76.9M in cap hit committed to 2020-21, that they literally could fill each of those seven remaining spots with a player at the current $700K minimum salary and end up over the upper limit ($81.8M, $300K over). Bump that salary figure from $700K to $750K for those minimum deals and suddenly the Leafs are $650K over the cap just by filling their roster with minimum deals. Even burying one of those minimum-salary players and just going with 22 players just barely squeaks them under the cap in that scenario (and the Leafs won’t have the same Horton/Clarkson LTIR deals to do cap voodoo with in the upcoming season).
This rise in the minimum is not an earth-shattering impact by any means, but it does serve to tighten the vise on a lot of teams who were hoping for/expecting generous bumps to the cap in the coming years (Tampa Bay and Arizona are another couple of teams that literally cannot get to 23 players in 2020-21 right now without exceeding the cap, even filling out the roster at the minimum). At least in the near term, it provides a bit of extra leverage for a team like the Devils who have an enormous amount of cap space right now heading into 2021 and beyond. And while it will cause headaches for capped-out teams, the minimum salary increase will have negligible impact for a team like the Devils that has $26M in cap space laying around heading into next season. The Devils are well-positioned to do some of that weaponizing of cap space we’re always hearing about and, with the current circumstances of a flat cap boxing in teams with expensive rosters, even a seemingly minor impact like a rising minimum salary could add to the Devils’ ability to take advantage of their situation.