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St. Louis Blues News: NHL Announces 2015-2016 Salary Cap

By Kate Cimini

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The NHL announced the newest salary floor, midpoint, and cap for the 2015-2016 season at noon on Tuesday. The screencap below shows that the cap has risen by 3.47% (the second-smallest increase the League has seen since the salary cap era) to a total of $71.4 million, with a floor of $52.8 million and an adjusted midpoint of $62.1 million.

This increase means that the players used their full 5% escalator, giving 5% of their salaries back to the League in order to increase the cap for their teams.

If you are unfamiliar with what the escalator actually, is, Thomas Drance explains it perfectly at NHL Numbers:

"The salary cap that governs the maximum and minimum amount teams can spend in any given season is set by estimating the amount of money that will be required to be paid to players under the CBA that season. The model is based off of only one real number: how much revenue the NHL makes that season. Everything else flows from that. And that number will only be known when the season is over.The CBA provides that exactly 50% of hockey related revenue must be paid to players. If the total amount of salary slated to be paid to players in any season ends up being more than 50% of revenue earned that year, then players are required to forfeit an appropriate portion of their salary so that the 50% mark is hit.This forfeiture is standard practice when the salary cap is set “too high” such that, when the numbers are crunched at the end of the season, the accountants conclude that teams had “overspent”. And this is what has happened almost every season since the salary cap started a decade ago.To avoid the possibility of sending full-salary cheques to players only to then require players to return some of that money after the season, the CBA includes an escrow concept, whereby a portion of all player salary is retained in an escrow fund. After the season, the accountants determine how much of the escrow fund should be paid to the players and how much should be returned to the owners. Players do not like this (just ask Dan Ellis)."

Essentially, the NHL and NHLPA agreed in the CBA that the players, no matter what their contract said, were only entitled to 50% of the money the NHL made in a given year. As such, a portion of their paycheck is held back each season, with the assumption that the players will earn (part of their original pay) as a “bonus” at the end of the season, but only if their team made enough money.

Players also have a vested interest in seeing teams around the league fill stadiums and get strong local television deals because the NHL has a revenue-sharing model that boosts struggling teams by funneling money from those with an excess of cash.

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The players were likely not excited about using their entire 5% escalator, meaning less cash in their pockets, but it helps their team sign more players, who, theoretically, can help them win a Cup and earn sponsorship deals, increase club revenue through merchandise sales and tickets, and so on and so on. It’s essentially betting that the League will be more profitable in the future by using this money now.

What Does This Mean For The Blues?

The St. Louis Blues are one of the higher-spending teams, running close to the cap ceiling. They have already committed more than $56 million for the 2015-2016 season . . . on only 15 players. Nine players have hit free agency (among them Vladimir Tarasenko) and they will either need re-signing or replacing.

While Blues players will take home less this season than they had contracted with Armstrong for, they will have $15 million left to ice a full team. Tarasenko will eat up at least $6 million of that, and Fabbri and Barbashev will probably spend more than 9 games up in the NHL this season, activating their contracts which, luckily for the Blues, are under a million each.

Therefore, with approximately $7 million (and maybe more if the Blues jettison a player of two with a higher cap hit) they’ll look to sign between five and seven additional players.

While this cap increase is good for St. Louis, they’ll still be running on a very tight budget with little wiggle room for a rainy day. Armstrong tends to start out the season with a decent amount of cap space — at least $2 million — in case of player injury. With their current budget they may not have that available, which points to the likelihood that the Blues will trade away a large cap-hit player like Bouwmeester, Backes, Oshie, or Berglund.

Next: Tarasenko: What's Taking So Long?

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