Here’s how the NHL’s hard salary cap will affect the Kraken in its first season

Inside the NHL

Folks have asked about differences I anticipate between covering the Kraken and the NHL versus the 16 seasons I spent following Major League Baseball’s Mariners and Toronto Blue Jays.

Well, I can tell you before even covering a single Kraken game that the NHL’s hard salary cap will likely be the biggest. As we saw at last week’s trade deadline when cash-strapped NHL teams used third party “broker” squads to offset salary, cap considerations seemingly loom over every league transaction.

The cap-pressed Tampa Bay Lightning acquired defenseman David Savard from Columbus, but only after the Blue Jackets traded him to Detroit and ate half his salary. Detroit then absorbed half of Savard’s remaining salary before flipping him and a minor-leaguer to Tampa Bay for a fourth-round draft pick, meaning the Lightning got charged only 25% of Savard’s $4.25 million cap hit.

Likewise, the Toronto Maple Leafs used the San Jose Sharks as their salary-eating go-between to acquire Columbus captain Nick Foligno at only a 25% cap hit. And Vegas got center Mattias Janmark from Chicago for just a 25% cap hit because San Jose again played middleman.

Columbus ate half of Foligno’s salary, Chicago half of Janmark’s and San Jose in both cases took on 50% of the remaining salary for a fifth-round pick from Toronto and a fourth-rounder from Vegas. If you’re having trouble following, you aren’t alone. But the NHL indicated the moves don’t circumvent rules because San Jose and Detroit acquired actual draft assets for essentially handing out cap space.

Kraken fans had best get used to such creativity, because the NHL employs the hardest salary cap in professional sports. Seahawks fans see similarities, though NFL teams work with a softer cap in which limits get bypassed by teams front-loading salary into signing bonuses that get spread evenly over the length of a contract for accounting purposes.

MLB employs a much softer luxury-tax threshold with financial penalties that high-revenue teams consider a mere cost of doing business and keep blowing past. It isn’t uncommon for top MLB spenders to have double or triple the payroll of the most frugal teams.

Not so with the NHL, which, starting in 2005-06, imposed a hard cap. The current upper threshold of $81.5 million can’t be surpassed for anything but long-term injury reasons.

There’s also a $60.2 million minimum teams must spend — meaning even rebuilding teams stay within about $21 million of squads going for it all. 

So the Kraken won’t be blown away financially by the big-revenue New York Rangers, Chicago Blackhawks, Toronto Maple Leafs or Montreal Canadiens.

Instead, how your team fares is a byproduct of how wisely it spends and manages cap space. In theory, you want your team as close to the upper limit as possible without risking the prospect of exceeding it in future seasons and being forced to dump quality players.

A recent wrinkle benefiting the Kraken is the NHL going with a “flat” cap due to pandemic-related financial shortfalls. The cap maximum of $81.5 million and minimum $60.2 million were the same last season, will be next as well and possibly after that.

So a general manager that in September 2019 projected an upper cap limit of $84 million this season and $87 million next will probably be dumping players to gain compliance.

Meanwhile, Kraken GM Ron Francis has spent zero on his 2021-22 roster, so he’s as cap compliant as humanly possible. With cap space at an all-time NHL premium, Francis has so much of it he’ll be laboring this summer just to meet the minimum $60.2 million.

So he’ll be taking on somebody else’s pricey — and hopefully, talented — guys. But Francis also must be mindful not to tie his hands financially for future seasons, because he’ll start from zero only this one time.

Anyway, enjoy this now, Kraken fans, because your team will never again have this much cap freedom. Once the 2021-22 season begins, every move for a fourth-line winger becomes a question of “Will that extra $100,000 he makes compared to the next player put us over the cap?”

Keep in mind, though, like anything else in professional sports, context matters. Thanks to third-party websites such as Cap Friendly — which provides real-time payroll tabulations — hockey fans are becoming cap experts to varying degrees.

But not every team pushing cap limits faces a doomsday scenario, and I’ve seen a tendency in some critiques to overstate supposed concerns. 

After all, the Lightning still made a deadline deal for Savard. I doubt Lightning GM Julien BriseBois wakes up with knots in his stomach because he’s pushing cap limits. Not when he won the Stanley Cup last season and might repeat this year.

Remember, winning matters. There are no trophies for cap compliance.

Fans typically forgive future cap issues after a Stanley Cup parade. Or at least they should. Conversely, the Maple Leafs haven’t won a Cup since 1967, so yeah, there’s heat on GM Kyle Dubas to overcome his cap woes and balance out an offensively overweighted roster. 

And Buffalo Sabres fans aren’t really applauding their team’s cap space given the team’s embarrassing results going on a decade. So the degree of cap concerns varies.

After all, the nature of the cap actively discourages repeat Cup winners, so BriseBois and the Lightning are really just playing for bonus points trying to repeat.

The NHL fought for its cap — locking out the 2004-05 season — to pare costs and create more competitive balance.

From 1967-68 through 1989-90, Montreal, the Edmonton Oilers and New York Islanders won 18 of a possible 23 titles. Things loosened slightly the ensuing 15 years, though the onset of free agency created escalating salaries, financial inequities between teams, three titles apiece for Detroit and New Jersey and two each for Colorado and Pittsburgh.

In 15 years under the hard cap, three teams — Los Angeles, Chicago and Pittsburgh — have won three titles each. So it wasn’t a perfect parity solution.

But we’ve seen four different Cup winners the past four seasons. And five teams — Los Angeles, Anaheim, Carolina, Washington and St. Louis — won their first Cup ever, while Chicago won its first since 1961 and Boston since 1972.

The major sports leagues long ago determined that most fans prefer different teams be given turns at winning championships rather than the same dynasties repeating. Keeps fans engaged, hopeful and spending money.

So the NHL’s cap provides what fans want: a chance at a title without waiting a generation for it. And whether you’re a Kraken fan, or ownership needing to recoup a $650 million expansion fee by being competitive, you’ll welcome any system that reduces a championship wait. Even if it induces frequent cap-compliance headaches.