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NHL CBA Uncertainty Could Lead To Big Free Agent Spending On July 1

If NHL CBA negotiations don't begin until this summer, lots of NHL teams could be spending lots of money on July 1 just to get to a possible $56 million cap floor.

As the NHL heads toward the expiration of its 2005 collective bargaining agreement, which ended its last and most severe work stoppage, several assumptions have taken over the media and fan narrative for what to expect in the 2012-13 season.

Those assumptions may in no way be right, but they're out there. Namely:

  1. Because the other North American leagues did it in their recent work stoppages, the NHL will insist upon, and secure, a better split of revenues (hockey related revenues, or HRR) than the 57 percent that currently goes to the players.
  2. There will be some sort of "amnesty" clause that allows each team to shed or buyout one onerous contract without taking a cap hit.
  3. The NHL will secure a lower salary cap.
  4. All of this will be done by next season.

The problem with all of these assumptions is they're just speculation. No one knows what the NHL will ultimately choose as its battleground, and no one knows what priorities the NHL Players Association will bring to the table as NHLPA head Donald Fehr completes his visits with players and fills out his negotiating team. Both sides could even agree to play 2012-13 under existing rules -- which have been extended once before -- as negotiations progress toward the next deal.

Meanwhile, many overlook the small but significant footnote: The current CBA does not expire until Sept. 15, 2012 -- well after the bulk of every team's offseason spending and contract commitments are completed.

Which brings us to this question: What on earth are NHL general managers supposed to do this summer? During the recent GM meetings in Florida, commissioner Gary Bettman instructed GMs to conduct "business as usual" this summer. That means spending on July 1, same as it ever was. And since revenues continue to rise and the NHLPA continues to elect to trigger the escalator each summer, the salary cap could grow ever higher.

In a recent Hockey Night in Canada segment, Eric Francis reported that CBA negotiations won't begin until June 1 -- because Fehr wants his players to be "fully educated" and not take their focus off hockey during the season. Reports have Bettman ready to begin negotiations any moment now, but if Fehr is intent on waiting until June 1, then July 1 and the opening of free agency will indeed be business as usual.

On that same HNIC segment, Elliotte Friedman said word is the salary cap this summer would then move up to about $69 million or even as much as $72 million. Under existing rules, that means the salary floor would escalate to somewhere between $53 million and $56 million.

If that happens, a lot of "cap ceiling" teams are going to be able to add lots of talent -- and a lot of budget-conscious, low-revenue teams are going to need to add more salary just to reach the cap floor.

For example, according to CapGeek's calculations of current 2012-13 salary commitments:

  • The Pittsburgh Penguins (the highest current cap payroll for 2012-13) would have an extra $10-13 million to spend beyond the $59.5 million they have committed to 18 players so far.
  • Likewise, the Philadelphia Flyers already have 21 players locked in for a $59.5 million cap hit.
  • The high-spending New York Rangers would have an extra $19-21 million to spend to fill out a roster that currently has 16 players under contract for next season at a current $50.1 million commitment.
  • The Nashville Predators, so careful with their budget yet so earnest in trying to convince Ryan Suter and Shea Weber that they're serious, would have $21 million to play with just to get to the cap floor -- though with only 12 players under contract, there is plenty of work, and spending, to do.
  • The Colorado Avalanche, with just $22.4 million committed to nine players for next season, would have nearly $50 million in cap space to work with.
  • But "cap floor" teams like the Avalanche and New York Islanders would need to spend $13 million more just to reach the lowest estimated cap floor.
  • The current NHL-leading St. Louis Blues, with 16 players under contract, would need to spend $16 million just to get up to the theoretical $53 million floor.

Once the spending begins, it's tough to imagine the NHLPA accepting any sort of rollback or reduction -- at least not for 2012-13. Can't see players signing contracts in July that are suddenly worth less in September.

People generally expect a different NHL financial landscape next season -- and they may be right. But if negotiations don't begin until summer and the calendar hits July 1 with "business as usual," they may be surprised just how right they were.

For full coverage of the NHL's ongoing labor situation, check in with our StoryStream dedicated to the topic.