The NHL salary cap might be getting a $4 million increase in the 2023-2024 season as the league pays its escrow debt by the end of this season. NHL commissioner Gary Bettman confirmed the news Tuesday after a board of governors meeting in New York.
The debt came from pandemic revenue losses, with players having been paying off the escrow balance since the pandemic started in early 2020. The NHL’s decision to pause the 2019-2020 season also contributed to the debts as players were still paid throughout the period.
“We believe that there is a good probability that the escrow will be paid off this season. It may not be, but it’s going to be close we think, which means the flat cap will be replaced by a bigger increase,” Bettman said.
“Revenue is pretty vibrant. We probably did $5.4 billion in [hockey-related revenues] this past season, which is actually about a half a billion more than we projected a year ago when we were starting things up. Things are good.”
More on NHL’s debts
The salary cap sat comfortably at $81.5 million throughout the three previous seasons. It was then increased by one million this year. By next summer, it will be increased by $4 million, assuming the NHL pays off the debts this year.
Bettman was certain the league could make it this year but was not shying away from admitting that repayment could be pushed back the following year. If it were to be the case, then by next year, the cap would only be increased by $1 million until a significant increase could take place in the 2024-2025 season.
The pandemic had a severe and lasting effect on the NHL. In the 2020-2021 season, the salary cap was at a flat rate as in the previous season, all NHL-related events were paused and little to no revenues were made. Hence, players’ revenue was taken from the NHL’s escrow balance.
According to NHL.com, over 50 percent of the share was allotted to the players, which was made possible by the NHL/NHLPA Collective Bargaining Agreement. Bettman reassured that the league was able to turn things around this year, saying that “business is good” and debts could finally be paid off in full this season.
“The business is good, and so things are looking possible for it being paid off this year. If we miss it, it’ll be close, so it’ll be next year,” the commissioner added.
Aside from having revenues from games back up and running, the league has also received help from other business opportunities, including media rights deals, which could also have a significant impact on the salary cap sometime in the future.
While businesses in the NHL started to look promising this season, the question remains whether the league would be able to fulfill its financial responsibilities ahead of the 2024 World Cup of Hockey. Bettman acknowledged that the NHL’s piling debts could delay the prestigious event.
“We’re getting close to whatever that deadline is. We’ve got to be a position in the foreseeable future to wrap up all the issues. Otherwise, it would delay the World Cup,” he said.