blank'/> THE PUCK REPORT: October 2019

Wednesday, October 9, 2019

NHL Minimum Wage & Maximum Wage By Year

In July of 2005, the NHL and NHLPA finalized the 2005 CBA ending a 310 day lockout that resulted in the loss of a season. The core feature of the accord was the introduction a salary cap, setting team spending limits based on league revenue and tying player salaries to such limits.

The maximum player salary was capped at 20% of the team salary cap. Meanwhile, the minimum player salary jumped 257% from $180,000 to $450,000 with fixed bumps in future years.  The chart below shows NHL minimum and maximum player salaries by year since 2005.

Year              Salary Cap     NHL Minimum     NHL Maximum      
2005-2006
$39.0m     
$450,000      
$7.8m     
2006-2007
$44.0m     
$450,000      
$8.8m     
2007-2008
$50.3m     
$475,000      
$10.06m     
2008-2009
$56.7m     
$475,000      
$11.34m     
2009-2010
$56.8m     
$500,000      
$11.36m     
2010-2011
$59.4m     
$500,000      
$11.88m     
2011-2012
$64.3m     
$525,000      
$12.86m     
2012-2013
$70.2m     
$525,000      
$14.04m     
2013-2014
$64.3m     
$550,000      
$12.86m     
2014-2015
$69.0m     
$550,000      
$13.8m     
2015-2016
$71.4m     
$575,000      
$14.3m     
2016-2017
$73.0m     
$575,000      
$14.6m     
2017-2018
$75.0m     
$650,000      
$15.0m     
2018-2019
$79.5m     
$650,000      
$15.9m     
2019-2020
$81.5m     
$700,000      
$16.3m     

The team salary cap has increased 104% since 2005 (an average of 7% per year), providing for maximum player salary to rise by the same margin. Minimum wage, on the other hand, has increased only 83% during that span (an average of 5.5% per year), 21% shy of their top earner counterparts. Thus, while maximum salary has been tied to the spectacular increase in team salary cap, minimum salary has not. 

The chart below shows what minimum salary would be as a percentage of team salary cap, as opposed to the negotiated rate schedule.

Year                NHL Minimum    % of Cap     1.15% of Cap      
2005-2006
$450,000     
1.15%      
$450,000     
2006-2007
$450,000     
1.02%      
$506,000     
2007-2008
$475,000     
.944%      
$578,000     
2008-2009
$475,000     
.837%      
$652,000     
2009-2010
$500,000     
.880%      
$653,000     
2010-2011
$500,000     
.841%      
$683,000     
2011-2012
$525,000     
.816%      
$739,000     
2012-2013
$525,000     
.747%      
$807,000     
2013-2014
$550,000     
.816%      
$739,000     
2014-2015
$550,000     
.797%      
$793,000     
2015-2016
$575,000     
.805%      
$821,100     
2016-2017
$575,000     
.787%      
$829,500     
2017-2018
$650,000     
.867%      
$862,500     
2018-2019
$650,000     
.818%      
$914,250     
2019-2020
$700,000     
.859%      
$937,250     

If minimum wage had been tied to 1.15% of the team salary cap instead of anchoring it to a fixed dollar rate schedule, NHL minimum earners would have received an extra $100,000 in 2007-2008, $200,000 more in 2011-2012, and almost $300,000 more in 2012-2013. In fact, in the fourteen years since the 2005 wage hike, tying it to such a percentage would have yielded an extra $2.6m for such skaters during that span, equaling an additional $187,000 each year on average.

The NHL's minimum wage is scheduled to increase in the coming years reaching $650,000 in 2017-2018, $700,000 in 2019-2020, and $750,000 in 2021-2022. The maximum player salary shall remain at 20% of team salary cap during this span.  

When the current CBA expires after the 2021-2022 season, perhaps the NHLPA should vie to tie minimum wage to a percentage of the team salary cap (with a floor of a 5% bump on prior year pay) so players at both ends of the hockey spectrum can share in increased NHL revenues. Equity for all skaters, regardless of role and talent.

* See also NHL Highest Paid Players By Year.
* See also NHL Highest Player Salary & Cap Hit By Position.
* See also Rethinking NHL Player Salary Structure.

Friday, October 4, 2019

NHL Highest Player Salary & Cap Hit By Position

Since the NHL salary cap was introduced in 2005, clubs have kept a close eye on two key player payroll markers - cap hit and salary. Cap hit corresponds to the dollar amount applied towards team salary cap whereas salary connotes a player's actual take home pay.

The chart below presents 2019-2020 NHL player cap hit and salary figures for the top ten players in each position per Cap Friendly.

      2019-2020 NHL Player Cap Hit By Position

Forward  $m      Defense     $m      Goalie       $m
McDavid  12.5         Karlsson 11.5  Price 10.5
Panarin  11.6         Doughty 11  Bobrovsky 10
Matthews  11.6         Subban Lundqvist       8.5
Tavares  11        Ekman-Larsson 8.2  Fleury         7
Marner  10.8        Burns Rask         7
Toews  10.5         Carlson 8 Gibson         6.4
Kane  10.5         Trouba Hellebuyck  6.1
Kopitar  10         Hedman 7.8  Holtby      6.1
Eichel  10         Weber 7.8 Crawford         6
Seguin  9.8         Byfuglien 7.6  Schneider        6
        

       

      2019-2020 NHL Player Salary By Position

Forward  $m      Defense     $m        Goalie  $m
Marner  16        Karlsson 14.5  Price 15
Tavares  15.9        Doughty 12  Bobrovsky 11.5
Matthews  15.9         Carlson 12 Fleury     8.5
McDavid  15         Trouba 12  Quick      7
Panarin  14         Burns 10  Lundqvist      7
Seguin  13.5       Subban 10 Jones       6.7
Benn  13         Suter Rask  6.5
Aho  12         Ekblad Gibson    6.4
Kucherov  12        Schmidt 8.8 Rinne      6
Rantanen 12        McDonagh 8.4 Varlamov 6
Stone 12     

Hellebuyck 6

       

Schneider      6


The 2005 CBA permitted a player's cap hit and salary figure to diverge dramatically in the same season and over the course of a multi-year contract. Thus, despite Marner ($16m) being paid the most this season, it's actually McDavid ($12.5m), who costs the most consuming more of his team's $81.5m cap limit than any other player.  The 2013 CBA limits this cap-circumvention loophole providing that no multi-year contract can fluctuate more than 35% year-to-year on salary amounts and 50% from the lowest salary year to the highest salary year.  

Another interesting facet of modern player contracts are signing bonus payments (as opposed to performance bonus payments). The genius of structuring player compensation as a bonus is that the earnings are not subject to escrow withholdings and are payable during lockouts.  

When a player retires their cap hit does not typically count against the team's cap limit.  Two notable exceptions to this rule include: (1) all remaining years of any contract signed by players 35 years of age or older continue to count against a team's cap after retirement; and (2) if a player retires and the salary on any remaining years is less than the cap hit of those remaining years, the difference is recouped and charged to the team's cap for those remaining years. A list of all current 35+ contracts may be found here.

As for injuries, teams must still pay a player's salary while injured but the cap hit does not count against the club (LTIR & SOIR).  

A listing of the highest paid players in the NHL since 1989-1990, along with the teams responsible for cutting their checks, can be found here.


* See also NHL Highest Paid Players By Year.
* See also Rethinking NHL Player Salary Structure.
* See also NHL Minimum Wage & Maximum Wage By Year.