NHL Luxury Tax Can Fix Salary Cap Issues

NHL luxury tax
NEWARK, NEW JERSEY - JANUARY 10: Mitchell Marner #16 of the Toronto Maple Leafs skates against the New Jersey Devils at the Prudential Center on January 10, 2019 in Newark, New Jersey. The Maple Leafs defeated the Devils 4-2. (Photo by Bruce Bennett/Getty Images)

The NHL really needs to address the salary cap issues allowing restricted free agents to more easily sign contracts. Right now there are 12 highly-priced RFAs coming off their entry-level contracts and causing major financial headaches for general managers. Why not do what other major sports have done and have a luxury tax where for every $1 million over the cap limit a team will be taxed at 50 percent? Or, the NHL can decide what parameters to use to issue the tax. The money could go towards the smaller market teams so as not to give an unfair advantage to the teams with money to spend.

NHL Luxury Tax Can Fix Salary Cap Issues

We’ll go through the 12 restricted free agents to display the salary cap problems they are causing which could be eliminated (for the most part) by instituting a luxury tax to teams if they exceed the salary cap limit.

12 Restricted Free Agents Causing Salary Cap Problems

Brandon Carlo – Defence – Boston Bruins

230 games – 8-G, 24-A

The Boston Bruins have just $7.3 million to sign both Brandon Carlo and Charlie McAvoy and it will take some financial maneuvering to get them both signed. The projected salary for Carlo could be $3-4 million on a shorter-term contract.

Charlie McAvoy – Defence – Boston Bruins

117 games – 14-G, 46-A

Charlie McAvoy is the future of the Boston blueline and they really need to determine how to get him signed. This is a prime example of why a team needs to exceed the cap limit to sign young, promising players. He may require much more than Carlo coming in at about the $7.13 million a year range for six years. So, they are short by about $3.3 million. Sure can see why I wouldn’t want to be a GM.

Matthew Tkachuk – Left-Wing – Calgary Flames

224 games – 71-G, 103-A

Matthew Tkachuk will more than likely be looking at a contract in the $8.5-$10 million range and the Calgary Flames have just $7.76 million free to spend. This, of course, means they will need to trade someone to make room under the cap to pay the talented Tkachuk.

Mikko Rantanen – Right-Wing – Colorado Avalanche

239 games – 80-G, 129-A

While the Colorado Avalanche are not hurting for salary cap space with a reported $15.6 million, they must conserve some of that for next season. In the 2020-21 season, they have no less than six RFA’s and five UFA’s they will need to address. Mikko Rantanen will more than likely receive between $8-$10 million when he does sign.

Zach Werenski – Defence – Columbus Blue Jackets

237 games – 38-G, 90-A

The Columbus Blue Jackets are another fortunate team to have an abundance of cap space and shouldn’t have any issues getting a deal done for Zach Werenski. The Columbus club has a whopping $15.8 million of cap space. They lost some key players in Artemi Panarin, Sergei Bobrovsky, Ryan Dzingel, and Matt Duchene. While they managed to grab Gustav Nyquist, they really can’t afford to lose Werenski. He will expect to get about $15 million over a three-year deal. Look for the Blue Jackets to falter a bit from last season unless they can sign a forward to make up for all the loss of scoring from three good forwards. Losing Bobrovsky won’t help either.

Ivan Provorov – Defence – Philadelphia Flyers

246 games – 30-G, 67-A

Ivan Provorov may expect to earn about $6 million for his services. The Philadelphia Flyers have $13.7 million available so they are in better shape than some teams.

Marcus Pettersson – Defence – Pittsburgh Penguins

106 games – 3-G, 26-A

It’s a good thing Marcus Pettersson will only require a two-year deal for $1.63 million since the Pittsburgh Penguins are currently over the cap by $157,500. It may take a bit of work to get there, but keeping Pettersson is definitely worth the effort.

Brayden Point – Centre – Tampa Bay Lightning

229 games – 91-G, 107-A

Brayden Point looks to cash in on a very successful 2018-19 season where he tallied 92 points with 41 goals. The Tampa Bay Lightning has $9.4 million in cap space and Point may get about $8.5 million for five years. He is one of a dozen hot commodities as the young players graduate from their entry-level contracts looking for the rewards of their efforts. Tampa Bay will do their best to accommodate Point, and why not who wouldn’t want a player who can get you 92 points?

Mitch Marner – Right-Wing – Toronto Maple Leafs

When we are discussing the thesis of this piece it can be personified by Mitch Marner‘s contract dispute. It is literally holding up many of these players from signing. No one team wants to do anything until the Marner contract gets done to use it as a template for signing their players.

Unfortunately, Marner doesn’t appear ready to sign just yet. The problem? THE SALARY CAP! The Toronto Maple Leafs are still underwater by $2.9 million and there doesn’t seem to be any relief in sight. It seems that Mr. Marner insists that he needs a deal similar to his teammate Auston Matthews ($11.634M five years) and won’t come down on his demands. That really is too bad since it delays most of the other RFA contracts from being consummated.

It appears that Marner is going to holdout and may play for the Zurich Lions to stay in shape. He, as everyone knows, must sign with someone by December 1st or sit out the entire season. It seems to be a game of chicken and right now it’s getting pretty ridiculous. What is also ridiculous is the fact that if Marner gets his requested $11 million, the Leafs will have over $33 million tied up in three players! That can cause future cap discrepancies beyond belief and weaken a team’s overall depth and success down the road.

Brock Boeser – Right-Wing – Vancouver Canucks

140 games – 59-G, 57-A

Brock Boeser may be looking at a seven-year $7.4 million a year upgrade to his bank account if the Vancouver Canucks see fit to pay him that much. The thing is… (here it comes again) the team only has $5.06 million of cap space to spend. Oh, where is that luxury tax when you need it?

Patrik Laine – Right-Wing – Winnipeg Jets

237 games – 110-G, 74-A

Patrik Laine is a prolific scorer and even though his numbers took a dip last season he will still demand a salary in the $10 million, eight-year range. Even though the Winnipeg Jets have $17.8 million in cap space, they also need to pull a rabbit out of a hat since they need to determine how to pay Kyle Connor in addition to Laine. He has even made it clear that Winnipeg may not be in his future. Soon (hopefully) we should know Laine’s future.

Kyle Connor – Left-Wing – Winnipeg Jets

178 games – 67-G, 61-A

If the Jets can get away with paying both Laine and Connor about $15 million they would be doing well. They need to sign more players to get to the roster limit. Kyle Connor may get about $7 million, but then that only leaves $8 million for Laine. You know that’s not going to fly (pun intended).

Final Comments

Only two professional sports use the luxury tax. Major League Baseball and the National Basketball Association. The National Football League and the National Hockey League utilize a hard cap.

Each league has the guidelines they use to charge a luxury tax. It just seems that no matter how often the NHL evaluates their salary cap the limit falls short for teams to sign the valuable players they wish to include on their rosters.

So, what happens is what is and will happen with all these talented young prospects exiting their entry-level contracts and needing to be signed. Each side stalls. There’s one problem… they don’t have enough money! Teams are forced to trade players they really want to keep. The luxury tax can solve that. All that needs to be done is to include it in the next collective bargaining agreement.

You know the Players Association will like it. Their players will receive bigger salaries. The catch may very well be that the owners will not go for it. Now, rich teams like the Toronto Maple Leafs would love it. Just imagine if it were in place right now. Marner could be signed, and Jake Gardiner too.

For now, it’s just a fantasy.

Yet, it seems the path to higher salaries is disrupting the NHL. The 12 players listed above would have been signed and ready to attend camp in a few weeks. Instead, there are endless disputes and players holding out. Once the season starts things really change. If a player is not signed by December 1st, they must sit out the entire season. Even if they do sign before the deadline, they’ve lost valuable time with their teammates and it just isn’t good for the sport.

So, NHL FIX IT!

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4 COMMENTS

  1. Your review of the Canucks and Boesser was “sensational” to say the least. If you had any clue at all, you would have noticed that the Canucks are over the roster limit now and signing Boesser means that two teammates would be sent to Utica. Hence, $7 million+ to sign Boesser. Reporting such would take away from the importance of your piece. I can only assume that the rest of your work was equally ill prepared and anything you write in the future will not be worth my time to read it.

    • Don: You are correct that the Canucks are over their roster limit. I was writing what their current salary cap situation was. It’s like saying the Coyotes are $178,500 under the cap but have $5.25 million IF they can put Marian Hossa on long term injury reserve when the season starts. It’s all relative and things change almost daily. It’s your choice whether you will read anything of mine in the future. You are obviously one of those people who think you know everything and there won’t be any chance of changing your mind. I report what is CURRENTLY happening. When I wrote it, the Canucks were short by $2 million to meet Boeser (one “s”) salary demands, and they still are. That was the fact at the moment. Too bad you couldn’t comprehend that!

  2. Add a luxury tax and the NHL will be like all the other sports, where only a handful of big market teams will win it all each year. I am from Chicago and the Blackhawks lost a lot of good players because of the cap, but a healthy league is when the season starts and most of the fans legitimately believe their team has a chance to raise the Cup.

  3. This is a horrid idea. Both the MLB and NBA have what amounts to super teams in major centers and the alsorans. The NHL and the NFL have actual parody and as a result are far more interesting to watch. NHL GM’s simply need to do their job and do their math. This article reeks of disgruntled leafs fan who is trying to backdoor a way out of their awful management. Maybe they shouldn’t hire right out of kindergarten next time they’re looking for a gm.

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