From Tom Benjamin’s NHL Blog: Bettman’s Nightmare

This a Tom Benjamin post from February, so factor in personnel changes etc. since then.

Revenues would have to fall by about 15% to get to a $46 MM salary cap, so this may be a very pessimistic view. Nevertheless, if it happens, the NHL is screwed. The Leafs are in good shape but many teams are not, and the league as a whole would face a salary crunch of staggering proportions.

The league would go into 2010 season with a maximum payroll of $1.38 billion. Unfortunately, teams have already committed $825 MM  to 225 players. That would only leave about $550 MM for the other 465 players if every team spent to the cap. (They won’t. They will probably spend enough to pile a healthy escrow hit on top of the slashed cap, but they won’t spend the entire $550 MM.)

It isn’t enough.

The players signed tend to cost more than the average player – they will earn $3.7 MM in 2010 – but there are still lots of expensive players to be signed over the next two years. The Canucks have Luongo, the Sedins, Ohlund, Demitra, Mitchell, Burrows and Kesler on contracts that will expire, and all of them will get far more than the $1.19 MM per player that will be available.

If the league has salary troubles and some teams are in good shape – Vancouver, Atlanta, Montreal, Toronto,  and Minnesota are the five least encumbered teams in 2010 – then other teams must be in deep trouble.

Philadelphia has committed $42.1 million dollars to ten players in 2010. They will have to add 13 players with less than $4 MM. Unless they can give away some salary, they will have to sign a bunch of minor leaguers to minimum wage contracts and dump two or three big contracts to the AHL. Other teams with apparently impossible problems include Pittsburgh, New York, Calgary and Edmonton. A dozen teams lack the space to fill out their roster unless they pay under $1 MM a player.

(As a long time Kevin Lowe basher, I’m nearly delighted the Oilers show up on the disaster list. Assuming they let Cole walk this year, the Oilers would have less than $10 MM to sign 13 players including Gagner, Cogliano and somebody to play goal.)

This CBA can’t handle even moderate drops in revenue. A salary cap at $52 MM in 2010-11 will cause problems when a third of the players are already contracted to receive more than half the money available if everybody spent to the cap.

There are solutions to the salary problem but they all involve Gary Bettman asking Paul Kelly to reopen an unworkable CBA. Call it Gary Bettman’s nightmare.

via Tom Benjamin’s NHL Blog » Blog Archive » Bettman’s Nightmare.