Sharks Hockey Analysis

Captain Obvious Says: Salary Cap Doesn’t Fix NHL Financial Disparity

So the main man grier has spent the last couple of posts breaking down how the Sharks might sign, re-sign, trade, or ditch certain players in order to get better and (here’s the trick) meet financial goals. One of the big barriers we see as Sharks fans is the unwillingless/inability of the team to spend up to (or near) the salary cap, projected around $56M/team for next season. Personally, I’d be surprised if the Sharks even spend $50M, and as an amateur capologist myself, I’m always interested in that sort of thing.

On a higher level, Mark Cuban recently explored how salary caps affect the pro leagues, and there’s a specific point I’d like to highlight. National revenues (like TV deals) are counted as overall league revenues, but so are local revenues. If a specific market has some breakout growth, it benefits that market in that they get to collect the money, plus it raises the salary cap, putting pressure on other teams to spend more.

While the CBA was being negotiated, it was to the owner’s benefit to make their teams look as poor as possible. For teams that were owned by big companies that had their fingers in all sorts of hockey-related pies (like the Rangers, Kings, and Flyers) this is pretty easy to do. But now, I might argue that it’s in the owner’s benefit to make their teams look quite rich. For instance, if MSG (the company that owns the Rangers, Madison Square Garden and the TV channel that broadcasts the majority of Rangers games) just suddenly decided that the Rangers should really be making $60M more from the TV deal, that counts towards league revenues, and will have the end result of raising the cap for every team in the league by over a million dollars. The Rangers actually get the cash (sort of), and the other teams then have to spend it, or risk being less competitive.

I believe deals like the CBA do have a compression benefit on the league, in that the spending difference (and hopefully thus the quality) of the 30 teams isn’t as disparate as say, the Yankees (who spend $200M on the team) vs. the Pirates (who spend about a buck and a half). But after a few years, with the Rangers, Stars, Flyers, and Red Wings all making it deep in the playoffs, I don’t think this CBA enables all teams to be truly competitive, something the NHL sold as a benefit to the cap.

The question is, can the Sharks be part of that group? I think the Sharks are in that second tier, where good management and drafting can help push them over the top, sort of like the Penguins. As far as the Pens go, some combination of Malkin, Crosby, Stall, Letang, and Malone will no longer be with the team two or three years down the road. They will have to draft and trade well again, with the richest teams taking those players away- unrestricted free agency is at only 26 now, as opposed to 31 before the new CBA. In a few years, I fear we will see over half the teams closer to the salary floor than the salary cap, with the biggest market teams driving league money through growth in local revenue.