Thursday, May 08, 2008

Rangers Salary Cap Considerations for 2008-09

The NHL and Rangers Salary CapLike many fans we've just started trying to understand how the NHL's salary cap limit will effect the New York Rangers 2008-09 roster. This is an initial estimate of the Rangers salary cap numbers for next season. Trying to understand the NHL collective bargaining agreement and all its ins and outs for calculating the salary cap is a little tricky. But we'll take a shot. Because, you can't score unless you shoot (ta-dum-dum).

Starting with Dubi over at the Blueshirt Bulletin, who wrote:
Right now, that [current players under contract] all adds up to around $36 million, including upwards of $1.5 million in bonus payments from last season deferred to next season's cap calculation. With next season's cap likely to be in the $55 million range...
Using for the Rangers contract numbers yields the following table of player salaries. Glen "Stealthy" Sather is looking at these same numbers as he tries to plot a course for next season.

Players currently signed for next season:

PlayerD.O.B.SPC avg.*2007 - 082008 - 09

$35.975 M

*Estimated average for SPC [Standard Player Contract] in effect during 2008-09 season.

italics denote 2-way contracts. Note: some players may be signed to 2-year contracts where one year is 2-way and the other is not.
The averaged club salary is used to calculate the salary cap for the "Team Payroll Range System" as the NHL officially refers to it. The collective bargaining agreement does not use the term "salary cap." The "Club's Averaged Club Salary" is calculated by averaging each player contract (plus or minus other considerations) and then adding them together.

Some snips from the NHL's collective bargaining agreement:
Overview of Operation of Team Payroll Range. The Team Payroll Range created by this Agreement consists of a Lower Limit and an Upper Limit during each League Year for permissible spending by each Club based on its Averaged Club Salary...

"Averaged Club Salary." "Averaged Club Salary" shall mean the entire aggregate amount committed by each Club in a League Year, calculated daily, as Player Salaries and Bonuses in that League Year (and which is intended to include any and all other commitments to Players as set forth below), with Player Salaries and Bonuses calculated in accordance with the "Averaged Amount" as defined below...

"Averaged Amount." For any multi-year SPC, for purposes of calculating the Club's Averaged Club Salary in any League Year, the Averaged Amount of such SPC shall be used. That is, the Player Salary and Bonuses for all League Years shall be "averaged" over the length of the entire term of the SPC, using the stated amount, by dividing the aggregate stated amount of all Player Salary and Bonuses to be paid during the term of the SPC by the number of League Years in the SPC...

Illustration #1: A Club signs a Player to a three-year SPC providing for $500,000 in Player Salary and Bonuses in Year 1, $600,000 in Year 2, and $700,000 in Year 3. The charge to the Club's Averaged Club Salary in all three years of the SPC is $600,000.
So who counts against the cap? The NHLSCAP FAQ tries to answer that question:
It depends - are we talking about during the season or in the offseason? Let's cover both scenarios: DURING THE SEASON

During the season (not the team's season, the League's season), anyone on a team's NHL roster counts against the cap. This includes players on the Active Roster, Injured Reserve, Injured Non Roster and Non Roster. It also includes players who have a "bona-fide long-term injury" or LTI as well as players sent to the minors on conditioning assignments and players placed on waivers (until such time that they are assigned). Also included are any deferred salary and bonuses earned as a result of playing in a league year under the new CBA, and any ordinary buyouts. The new CBA lists one other area, but I'll omit it for now unless it happen to take place...

Who doesn't count against the cap?
During the season: Players assigned to the minors - even if on one-way contracts - do not count (as long as they are not on conditioning assignments or fit the condition of 50.5(d)(i)(B)(5) above) as well as players signed to a contract that are in Major Junior hockey or overseas. Players suspended by either the team or the NHL will not count for the duration of the suspension as long as the player is not receiving his salary; however, teams must keep enough payroll space available to be able to accept the player should his suspension end immediately. [subject to change?]
Larry Brooks of the NY Post reported that the Player Association estimated the salary cap for the 2008-09 season would be $56,300,000.

So combing some of the above numbers yields:

Est. Salary Cap
minus current avg. contracts
minus deferred bonus
approximate Cap room

The Blueshirt Bulletin estimated price for re-signing several Rangers unrestricted free agents (UFA's):

Jaromir Jagr
$6,000,000 - $8,000,000
Sean Avery
$3,500,000 - $4,000,000
$4,000,000 - $6,000,000
average total for all three:
$15.75 M

Possible cap room left to sign new free agents:
$20,856,647 - $15,750,000 = $5.107 M cap room
As you can see, re-signing Jagr, Avery, and Rozsival severely limits what the Rangers can do in obtaining new major league defensive or offensive strength. Also, just filling out the roster is an issue. Rozsival should clearly be the one who is not pursued. Re-signing Avery is a priority. He is the spine of the team.

Valiquette was a solid and reliable backup goalie to the Prince. Comparing "Valley" and newbie Miika Wiikman, the edge goes to the incumbent. Valley added a big plus in the locker room.

It's also apparent, both in performance and salary cap terms, that the Christian Backman trade did not provide good value to the team. He will be the highest paid defenseman. Some way should be found to transfer his liability and come up with a real defensive asset for this team.

More RP thoughts to come.
Unrestricted Free Agents and their 2007-08 salary info:

Jaromir Jagr -- $8,360,000 [$4,940,000 avg. counted towards cap ]
B. Shanahan -- $2,500,000 [$5,300,000 avg. counted towards cap ]
Marty Straka - $3,300,000
Paul Mara --- $3,000,000
Marek Malik - $2,500,000
M. Rozsival -- $2,300,000 [$2,100,000 avg.]
Sean Avery -- $1,900,000
S. Valiquette - $635,000 [$617,500 avg.]
J. Strudwick - $500,000

Restricted Free Agents:
Nigel Dawes -- $475,000 [$496,333 avg.]
Fredrik Sjostrom -- $800,000 [$775,000 avg.]
Some Players Down On the Farm:

PlayerD.O.B.SPC avg.*2007 - 082008 - 09
Korpikoski, L.4-28-86$1,017,533$984,200$984,200
Anisimov, A.5-24-88$850,000$850,000$850,000
Bourret, A.10-5-86$850,000$850,000$850,000
Sanguinetti, B.2-29-88$883,333$850,000$850,000
Byers, Dane

ICINGS: And you thought the price of oil was skyrocketing. Check out the inflation in the NHL's salary cap.

- $39 million for the 2005-06 season
- $44 million for the 2006-07 season [12.82% increase from 05-06]
- $50.3 million for the 2007-08 season [14.32% increase from previous year]
- $56.3 million for the 2008-09 season estimate [11.93% increase from previous year]

averaging a 13% annual increase

update: August 1st, 2008 - New York Rangers

Players SignedActual PayrollCap PayrollCap Space

Blueshirt Bulletin:
Upon Further Review, Rangers May Not Look All That Different Next Season -- NHL Salary Cap informaton [excellent source]
Collective Bargaining Agreement [.pdf file, over 400 pages]

Larry Brooks / NY Post Slap Shots:
Cap Map Shows Salaries Heading North -- Slap Shots has learned that the Players Association - with input on the number from the NHL - projects revenues to reach $2.575B this season, an 11.1-percent increase over the 2006-07 Hockey Related Revenue (HRR) of $2.318B. The cap should increase at a slightly higher rate because the players' share of the gross increases from 55.5 percent to 56.333 percent at the $2.5B revenue threshold. It assumes the players will once again exercise their option to approve a five-percent inflation bump.

Thus the PA estimates that the cap will be approximately $56.3M - give or take in concert with the final HRR number that will be determined by playoff revenues - next season, an increase of $6M from this year. It means clubs will be able to maintain summer rosters of up to nearly $62M in payroll before personnel decisions come due at the end of the training camp.

It also means the floor next season will be $40M, or slightly above that. It seems like expensive flooring, but not so much, actually. For of all 30 NHL teams, only Columbus (barely), Nashville and Phoenix will have invested less in payroll this season....

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  • Anonymous said...

    One of the best posts I've read on any blog in a while. Thanks for putting in the effort.

  • jb said...

    Thank you. Sometimes the Ranger Pundit likes to see his staff to take a break from stuff about the hottest Ice Girls.