NHL Commissioner Gary Bettman Outlines Path To Potential Salary-Cap Spike For 2023-24 Season

Nothing is guaranteed yet. But it’s possible that NHL general managers could see their first significant post-pandemic salary-cap increase this summer.

Speaking to the media at the conclusion of this week’s general managers’ meetings in Manalapan, Fla. on Wednesday, commissioner Gary Bettman explained two potential paths to an increase of more than $1 million from the current ceiling of $82.5 million ahead of the 2023-24 season.

The first involves the league generating an additional $100 million in hockey-related revenue beyond this season’s current projections, Bettman said. While still quite large, that number has shrunk from the projection of $140-150 million three months ago, at the Board of Governors’ meetings in December.

“We’re having a good season on and off the ice, so we’ll have to continue to keep an eye on it,” said Bettman, who said total revenues for this season are projected to be in the range of $6 billion, an all-time high.

“When we started this (in 2020), there was a lot of skepticism of how the billion-and-a-half dollars would be repaid,” he added. “But the fact is we’re in the home stretch on that and if it’s not this year, it’ll be next year, which is sooner by a year or two at least than we had initially projected when we entered into the extension of the CBA.”

If the debt is fully repaid once the final accounting is done for the 2022-23 season, then the salary cap will rise by an estimated $4.5 million, to $87 million.

If not, it’s set to rise by $1 million for the second-straight year, to $83.5 million — unless Option 2 is enacted.

That would involve a negotiation between the league and the NHL Players’ Association to agree to smooth the scheduled increase over a period of time, allowing for a higher cap ceiling sooner. It’s a possibility that had drawn wide speculation over the past few months but really couldn’t be floated by Bettman until the Players’ Association installed its new executive director, Marty Walsh.

Walsh was announced as the successor to Donald Fehr in mid-February and officially takes the reins this month.

“We’re hearing around the bend from players and others that there may be interest in having that,” said Bettman on Wednesday.

But because of the hard-cap system where hockey-related revenues are split 50/50 between owners and players, any artificial increase in the cap ceiling would also trigger an increase in the escrow withholdings from players’ paycheques.

Escrow has been a thorn in players’ sides since the hard cap was introduced in 2005, and the extension to the collective bargaining agreement that was negotiated in 2020 included a clause that would cap the withholding at 6% for the final three years of the agreement. That is scheduled to start this summer, at the beginning of the 2023-24 season.

“If we’re going to raise the cap and the escrow hasn’t been paid off, then we’re going to have to look at raising the escrow rates, which under the CBA extension in 2020 is locked into the last three years of the CBA term at 6%,” Bettman said. “So, if you’re going to raise the cap prematurely, then you’re going to have to look at the escrow percentage as well. The two are inextricably tied together.”

There has been concern that this season’s hockey-related revenues could be negatively impacted by Tuesday’s Chapter 11 bankruptcy protection filing by Diamond Sports, which operates regional sports networks for 12 NHL teams under the Bally Sports banner.

The company indicated in a release on Tuesday that its hockey broadcasts will continue through the end of this season’s window, which includes the regular-season and the first round of the playoffs, so viewers will still be able to watch their teams’ games. And per The Associated Press, Diamond is current on its rights payments to NHL teams.

It’s expected that Diamond may withhold some payments from MLB teams as their new season gets underway in hopes of negotiating more favorable terms. So far, there has been no indication this will happen on the hockey side, where most of this year’s payments have already been made and the broadcast season is close to concluding.