The argument the PA is making (I think) is that the money saved (or borrowed from the future) from back-diving plus the money found (via growth creating more space above the max individual player cap over time) hasn’t been spent on more cap circumventing contracts; it’s gone toward the supporting cast. Remove both mechanisms (back-diving and term) and the strong demand for marketable superstars will lead to more money going to the top and less for the rest.

I think it’s convincing.

Well, for one thing, no one is going to pay Kovalchuk 10 million a year for five years if that’s going to be the cap hit. So in that sense, I would expect there to be a downward pressure on the biggest salaries, not just the small ones.

I’ve been thinking about the five year term thing and the players’ insistence that it will wind up harming the “middle class” as cap dollars get sucked up by the top talent. Now, from the players’ POV, the 5 year max term is bad for other reasons, too (no long term job security, for one; moving your family hither and yon also sucks), but I can’t quite figure out the middle class claims. The salary cap should have had that effect (and maybe has in percentage terms; in actual dollar terms the middle tier saw salary growth over the last CBA).

Any idea how the five year term might accelerate that process, as the PA suggests? My guess is that cap savings from the back-diving, cap circumventing contracts was spent on 2nd and 3rd liners. With no circumvention, actual dollars paid and cap dollars will converge (but won’t quite meet, even under the League’s proposals). Top talent will always be paid, but there will be less for the rest.

Fom the League’s POV, this helps the small market clubs stay competitive (a worthwhile goal), but the result is a labor market in which salaries between superstars and the rest diverge. That’s not so good for low paid players, nor for union solidarity, and maybe not so good for the league long term if the KHL can grow to become a legitimate option.

I guess a part of this is, if the NHL is structuring the CBA to protect the Coyotes and the Panthers, what can the PA do to protect Boyd Gordon and Kris Versteeg? The PA would probably never consider tightening the individual player upper limit (20% of the cap in the last CBA). But that’s one approach.

Oh! Looking up that percentage may have yielded the answer.

The 20% max salary figure is based on the Cap in the year the deal is signed.

Say the cap is $40mm (as in the CBA’s example (50.6 Maximum Player Salary and Bonuses; Fixed Dollar Amount of Player Salary) and a player signs a max 10 year deal, no back diving. That’s $80mm dollars and a cap of $8mm. If the League continues to grow at last year’s pace (10%!), now that max contract is not quite max (the new max would be 44*20% = $8.8mm), and there’s another $4mm to spread around, too, to bring in solid supporting talent. Over the ten year term, that max contract will come back down to middling, too, assuming continued growth.

Limit the term, and stars will “reset” their claims on max salaries with each renegotiation, leaving less for everybody else. And that’s why the PA insists the League’s five year contract term proposal will gut the middle class.