Ice Breakers: $4.5 million salary cap increase may be too optimistic

On Thursday’s edition of Ice Breakers on Daily Faceoff Live, Frank Seravalli and Mike McKenna discuss a potential NHL cap increase, the Florida Panthers without Ekblad, and the challenges faced surrounding the 2024 World Cup of Hockey.

Mike McKenna: On this week’s episode of Ice Breakers presented by DoorDash, we do have some issues that are probably a little more pertinent to the actual play on the ice Frank. We heard that NHL commissioner Gary Bettman said at the NHL Board of Governors meeting is that the cap could go up $4.5 million and that is going to directly play into what the players do in paying it back. So, what needs to happen in order for the cap to go up that much? 

Frank Seravalli: Well here’s what I found out: a lot needs to go right when you look at this potential $4.5 million increase in terms of this summer, and because of that, a lot of people I have spoken to in the last 48 hours tend to believe that the NHL’s projection to go up that much and have the debt paid off this season is a bit rosy in terms of a projection. I’m told the players owe somewhere in the neighborhood of $400-$500 million, so let’s call it a ballpark of $450 million at the start of this season for what they need to pay back.

So, what does revenue need to hit in order to pay that back? I’m told the NHL exceeded expectations last year, they were sort of hoping for a $5 or $5.2 billion season and I was told they ended up closer to $5.4 billion in hockey-related revenue. In order to pay that debt back, they need to be in the range of $5.5 to $5.7 billion in revenue. All of that is a lot to say, you need to sell a lot of stuff in order to make that happen, including tickets, advertising, and jersey ad sales, in order to really pump that number up.

There’s going to be a lot of heavy lifting in order to get that paid off. The big reminder is that if the debt is not paid off, the cap only increases by $1 million and then it would have to slide to the following year for the cap to increase. So, a lot of the teams and managers I have spoken to have said “Yes, that would be amazing to have the cap go up that much, but at this point, we aren’t banking on it and we are only proceeding forward with the cap increasing by $1 million, and if it gets to that point then we are all in a great spot moving forward.” 

Mike McKenna: We’ve seen some pretty big injuries so far this season. You know we talked about Landeskog being out for the Avalanche and now take a look at the Florida Panthers. Defenseman Aaron Ekblad is going to be out for several months, it looks like for that club. Is there any way the Panthers are going to be able to bring in some reinforcements to fill that gap from their No. 1 defenseman who is going to be out for a while? 

Frank Seravalli: Well, I think there’s no question that the Florida Panthers are looking around, but only for temporary stop gaps that are affordable. Are there some younger players out there that could potentially slide into our lineup for the foreseeable future that we would be able to keep once Ekblad is back? There are not many of them out there. One of the names we had spoken about previously was P.O. Joseph of the Pittsburgh Penguins, a team that is certainly in a spot where they have a lot of defensemen and I know there were a number of teams that made offers on P.O. Joseph. But the Penguins weren’t willing or ready to move on.

So, the Panthers are in a spot where they are probably going to have to give some of their younger guys a chance to run with this. An opportunity to see if guys like Lucas Carlsson and Matt Kiersted can knock the door down and remain with this team before having to do something. The problem with Ekblad going on LTIR and this being potentially a six-week injury or so, if that’s the type of ballpark time they are dealing with, they have to then account for him coming back. It’s not like they can go out there and go shopping for a Jakob Chychrun or someone they could plug right into their lineup and they also don’t have a ton of future assets in order to make it work, so they’re not really trying to go out and spend draft picks, I don’t think, to fulfill a temporary stop-gap solution. So, all of that to say is, you’re probably going to see the Panthers stick with what they have for a little bit. 

Mike McKenna: That’s tough to think about, they’ve already lost MacKenzie Weegar in the off-season and now Ekblad. That puts a big light on Forsling and some of the other players that take up some of that air. So, the NHL to me, Frank is kind of in a sticky situation here going into the 2024 World Cup of Hockey regarding the players that are from Russia. So, what’s the latest on if those players can take part in the tournament?

Frank Seravalli: Mike, this was a topic of conversation at the Board of Governors meeting following the meeting with deputy commissioner Bill Daly and commissioner Gary Bettman. What do you do? They were looking for a solution and one of the ideas that were raised was, do you treat the Russian players, given the invasion of Ukraine and the fallout that has come from that, do you just allow them to play under the banner similar to what they did at the Olympics with the doping scandal and they called it “Olympic athletes from Russia”? You have Russian players that participate in the World Cup of Hockey but they don’t get to use the banner and Russian flag.

The interesting thing is that Bill Daly had mentioned, “Hey look, that may not be suitable to other European teams that are scheduled to be a part of this tournament.” The traditional hockey powers like Finland, and Sweden, go down the list, the Czech Republic. We already saw the pushback from Dominik Hasek and the Czech Federation just about Russian players participating in the premiere games in Prague to open this season. So, the NHL is in between a rock and a hard place. You can’t actually have a best-on-best tournament, which is what we have all been salivating for since the 2014 Olympics in Sochi, without having Russian players part of it. That’s one. Two is the tournament is not as strong without Russian players participating. And three, how do you handle this from a fair perspective of, you want this to be fair for Russian players, most of whom have absolutely nothing to do with this ongoing invasion of Ukraine and simply just wanting to play hockey. They’re in between a rock and a hard place and while all of that’s going on and trying to decide what to do with Russia, the league still has a ton of work to do with the IIHF in order to pull off this tournament.

Gary Bettman said whatever that deadline is to get that tournament up and running in 2024, we are pushing against it and getting close to that point. They need to make a lot happen and it feels like a lot has been happening behind the scenes in order to do that, but nothing has come to fruition just yet and this Russian situation I think plays a big part in that. 

You can watch the full episode here…