Capology III

So it took me a little longer than I would have liked but here we got with the panel I listened to at the Caps Convention. Don Fishman was very informative and enlightened me, and many others, on the nuances of the NHL salary cap. One thing that I was unaware of was the growth of the salary cap. In 2005 the minimum number was $21.5 million and the max was only $39 million. Today as it stands the minimum is $48.3 million and the max is $64.3 million. There has been a significant increase in these six years and even more so considering that from the 08-09 season to the 09-10 season the minimum and maximum cap only increased by $.1 million. The Caps need to fit under the $64.3 million max with 23 players. Overall they are allowed to have 50 players under contract (they currently have 48) but this includes junior players and such.


The Caps, and all NHL teams, can draft a player at the age of 18. They generally reach their entry level contract around age 20, after juniors. Of course the likes of Ovechkin, Steven Stamkos, and Sidney Crosby skipped juniors and jumped straight into their entry level deal. All entry level deals are three years in length and are all 2way contracts. A player does not have any restricted rights until after their entry level deal is over (usually around the age of 23). Within these restricted rights, the players are not allowed arbitration. This is a one year deal and then the next year (age 24) the player is a restricted free agent with arbitration rights. Most players do not become unrestricted free agents until the age of 27-28 years old. Clearly the listed players above buck the trend and would be eligible at the age of 25-26. No extension can be made to the player until after their entry level deal. Ovechkin signed a 13 year contract and Backstrom signed a 10 year deal after their initial entry level deal was up. This then skips through any restricted free agency and arbitration rights.


An example of a current rookie/entry level deal is that of Marcus Johansson. Marcus was given a three year deal for 900K. The Capitals do not include any performance bonuses in their rookie deals. They do this in order to always know the cap number. They instead increase the players overall salary and use that as the compensation for those bonuses. If Marcus was to play juniors, the caps could still have him under contract but the contract can slide two years until he comes to Hershey or Washington that was when he arrives he keeps his entry level deal length. Marcus can not become an unrestricted free agent until after the 2018-2019 season.


A player like Mathieu Perreault is still in an entry level deal, but because of his tenure in the league he still has a two year contract but has to pass through waiver in order to play in Hershey. Don gave an example of player salary between Hershey and the NHL. If Perreault is with the Capitals he will make the 82 game avg of $810K. If he is dropped down to Hershey he will only make the avg of $67,500. As we were informed, Hershey is one of the few teams that pay their players a higher salary due to the profits they earn during their season. Most minor league teams could not afford to pay a Perreault that amount of money. The players are lucky to have the opportunity to play in Hershey and the fact that it is so close to Washington DC, we the fans can attend and help these young players succeed.

This was a good basis for the panel. I don't want to repeat myself with the deals and structures as they are pretty much the same with the other examples of Alzner and Laich. This panel was fun and interesting as far as learning the nuances of the NHL salary cap. As I finish this up, the Caps have re-signed winger Jason Chimera to a two-year extension worth $3.5million...