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Wednesday, November 21, 2012

NHL Payroll Range implications

The NHLPA proposal includes the following:
" +8M/-8M payroll range becomes +/- 20% of midpoint beginning in 2013/14
The Upper Limit may not fall below 67.25 M in any year of the agreement.  This is half way between the 11/12 Upper Limit (64.3 M) and the 12/13 UL (70.2 M). "

What does this mean?

Based on the original numbers for 2012/13, the Upper Limit was 70.2M which meant that the Lower Limit was 54.2M and the midpoint was 62.2M.
At the 50% midpoint, the midpoint would fall to 54.56M (+ an additional 182M/30 teams to equal about 60.6M)

Under the PA's proposal the range would widen significantly.  For example, it the midpoint was 60M next year, the Upper Limit would be 72M and the Lower Limit would be 48M.  This would be a range of 24M, vs the 16M that exists today. 

The higher the midpoint goes, the wider the range would become (the opposite would hold true as the midpoint becomes smaller).  It would always be larger than the current $16M as long as the midpoint stayed above $40M (as 20% of 40M is $8M).

The PA's clause that the Upper Limit would not fall below 67.25M would become relevant if the midpoint dropped below $56.0416M (120% of $56.0416 is $67.25); the midpoint was 56.3M in 2011-12 but given the change from 57% to 50% would more likely be in play over the next few years.

The PA's proposal would allow the high spending teams to spend 50% more than the cap floor teams (120% / 80% = 1.5); under the expired CBA the range from low to high was only 30% (70.2M / 54.2M =1.295).

The ratio between cap and floor has changed significantly under the expired CBA.  In 2005-06, the cap was 39M and the floor was 21.5M, meaning the cap was 81% higher than the floor (39M / 21.5M = 1.81)  The PA's proposal would move the ratio back in the direction of the ratio when the last contract was signed.

Forever1940 is the nom de plume of Eric Hornick, statistician on Islander home telecasts since January 21, 1982. Visit my blog: NYISkinny.com and follow me on Twitter @ehornick

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