PALM BEACH, Fla. — The NHL salary cap is expected to be $83.5 million next season, a $1 million increase, because current revenue projections indicate the players will have a remaining escrow debt owed to the owners after this season, NHL Commissioner Gary Bettman said Tuesday.
However, Bettman said if the remaining debt of an estimated $70 million is paid off this season the salary cap would then rise slightly above $86 million next season.
The NHL is estimating revenues to be around $5.7 billion this season, up from approximately $5.4 billion last season. Bettman said the revenue projection would have to increase about $140 million to $150 million for the escrow debt to be paid in full this season.
“We’ll have to see,” the Commissioner said after the Board of Governors meeting at The Breakers. “We’re just going to watch it. Clearly it appears that if we don’t finish paying off the escrow this year, after next year it should be all gone and there shouldn’t be any issue about that.”
Bettman said the NHL is not considering renegotiating the agreement with the NHL Players’ Association in place that calls for the cap to go up to $1 million until the escrow is repaid in full.
“That’s not something that we’re discussing right now,” Bettman said. “It is what it is. If it’s to be changed that’s something that obviously would have to be discussed with the Players’ Association.”
The players incurred the debt after the 2019-20 season, when they were still receiving their full salaries, and got more than 50 percent of their share of hockey-related revenue (HRR) allotted to them under the terms of the NHL/NHLPA Collective. Bargaining Agreement despite revenues flatlining because of the COVID-19 pandemic.
They have been paying it down every season since, with a certain percentage of their salary going into the escrow account that goes to the owners, who did not receive their 50 percent share of HRR in the 2019-20 season because of the drop in revenues. .
Bettman said revenues last season were approximately $500 million more than the NHL had initially projected, which is why the players might be in a position to have the escrow debt paid in full by the end of this season.
That is not the current expectation, though.
“Everyone has had to adjust with it only going up a million and right now we’re preceding that way and we’ll be pleasantly surprised if it increases,” St. Louis Blues general manager Doug Armstrong said.
NHL Deputy Commissioner Bill Daly said two factors could cause an increase in the current revenue projection.
“Currency valuation is one, and then what we generate in playoff revenue,” Daly said. “Who is in the playoffs and what are they generating in revenue.”
Bettman said the tumbling value of the Canadian dollar, currently $0.74 to the US dollar, factors marginally in the NHL’s revenue projections.
“We’re expecting another good year of increases in HRR, but when we started this there was about a billion and a half to pay off,” Bettman said. “We collectively, meaning us and the players, have done quite well by having things come back as strong as they have where it’s crystal clear that certainly this is going to be paid off in the not-too-distant future.”
The NHL is expected to announce the official salary cap number in June.
Senators sale process to pick up steam in January
Bettman said more than 12 groups interested in purchasing the Ottawa Senators from the family of late owner Eugene Melnyk have signed non-disclosure agreements to view the team’s books. He also said New York-based Galatioto Sports Partners, the financial firm hired by the family to facilitate the sale, will begin a formal process of vetting and accepting bids in January.
There is no firm timeline for when the NHL would like the sale process to be completed, Daly said.
“In terms of soliciting who wants to be in the process is something that is ongoing, and I think a more formal process won’t begin until after the holidays are over and people are back and focused,” Commissioner Bettman said.
Canadian actor Ryan Reynolds, who has expressed interest in being part of an ownership group purchasing the Senators, recently met with Bettman and Daly in New York and left a strong impression on the top NHL executives.
Reynolds is the co-owner of the Welsh soccer club Wrexham AFC.
“If we can figure out a way to have him included, I think that would be great for the Senators and I think that would be great for the League,” Bettman said. “He’s very smart. He has a number of businesses besides the acting business. He understands sports and he understands promotion. I think he told us his followers on all of his platforms combined are well over 100 million. He’s somebody who is very popular and very engaged, and he’s doing a great job with Wrexham.”
Melnyk died at the age of 62 on March 28. The Senators announced the team was for sale on Nov. 4 with the caveat that any new ownership group would not be allowed to move the team out of Ottawa.
NHL working on a Fan Code of Conduct for next season
The NHL is in the process of devising a uniform fan code of conduct that will be in place next season, Bettman said.
The concept has the support of the Player Inclusion Committee, Daly said.
“We’re making sure we do this as a collaborative effort with all the clubs and getting all the appropriate feedback, suggestions and comments before we finalize it,” Bettman said. “We want everybody who comes to our game to feel welcome, to feel safe, to feel this is an environment they can be comfortable in and what the level of conduct that’s expected from people who go to games.”
Bettman said the code of conduct will be announced in all buildings during games and that it will require training staff in terms of how to deal with incidents involving fan behavior.
“It deals with what the response would be to somebody if there is an incident,” Bettman said. “That’s all going to be encompassed in a code of conduct.”
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