NHL analyst Pierre McGuire was on 93-7 the Fan in Pittsburgh Monday afternoon to discuss the latest from the NHL. The segment included discussion of the affect of the current pause in play on next season’s salary cap. McGuire dropped a dire prediction during his appearance.
“It’s something people aren’t paying enough attention to. (A salary cap drop) could be a major problem,” McGuire said. “The cap could drop anywhere from 25 to 40%. That’s significant.”
The current NHL salary cap is $81.3 million. A 25% drop in the Capitals salary cap due to the coronavirus pause or season-cancellation would reduce the amount they can spend on players to about $61 million. That amount would put many teams over the cap due to current salaries.
The Capitals currently have a little over $71 million in salary committed to next season’s roster, meaning they would need to cut $10 million in player salary. They also have expiring contracts for Braden Holtby, Jonas Siegenthaler, Brenden Dillon, Radko Gudas, Brendan Leipsic, Ilya Kovalchuk and Travis Boyd.
A 40% drop would be disastrous for all involved as that would take the cap down to about $49 million.
“(The NHL and NHLPA) are going to have to come up with some creative ideas. The one really positive thing–and this is extremely positive long term for the league–The NHL and the NHLPA, I’ve never seen them have better and more open lines of communication,” McGuire said.
You may recall back in early April we posted a story from TSN’s Elliotte Friedman, which centered on his speculation that a new Collective Bargaining Agreement (CBA) might be something that’s considered as a means of dealing with financial issues related to the shutdown do to the COVID-19 pandemic.
During a recent segment of TSN’s Insider Trading, Analyst Pierre LeBrun explained that while the NHL and the NHL’s Players Association have put an end to the formal long-term CBA discussions with each other, both parties are internally considering a possible new CBA emerging as a result from the shutdown and the impact on the league.
A new CBA would allow both the League and the Players Association an opportunity to restructure, financially, and provide a mechanism for dealing with potential losses accrued from the suspension of play due to the COVID-19 virus.
The current CBA runs ten years, expiring on September 15, 2022. The current Agreement was ratified by NHLPA membership on January 12, 2013, concluding a four-month lockout by NHL owners.
Just one of many reasons the league is going to try whatever they can, to finish the schedule and playoffs, and close the financial books for the season.
By Jon Sorensen