NHL Salary Cap

The NHL salary cap is the total amount of money that National Hockey League (NHL) teams are allowed to pay their players. It is a “hard” cap, meaning there are no exemptions (and thus no luxury tax penalties are required).

The actual amount of the cap varies on a year-to-year basis, and is calculated as a percentage of the League’s revenue from the previous season; for instance, in 2007-08, the NHL’s salary cap was approximately US$50.3 million per team; for the 2008-09 season it was $56.7 million; for the 2009-10 season it was $56.8 million; for the 2010-11 season it was $59.4 million; and for the 2011-12 season it was $64.3 million. Following the 2012-13 lockout, the 2012-13 salary cap has been set at $60 million, but teams can still spend up to $70.2 million, pro-rated for the shortened season length.

Like many professional sports leagues, the NHL has a salary cap to keep teams in larger markets (with more revenue) from signing all of the top players and extending their advantage over smaller-market franchises. One of the biggest instance was when the Detroit Red Wings stockpiled expensive high-end performers for the 2002 hockey season that resulted in them winning the Stanley Cup. The New York Rangers used a similar approach, offering massive contracts to marquee, veteran players, but results were invariably dire.

A salary cap existed in the early days of the NHL. During the Great Depression, for example, the league was under financial pressure to lower its salary cap to $62,500 per team, and $7,000 per player, forcing some teams to trade away well paid star players in order to fit the cap.