On December 4th, Seattle became the newest city to join the NHL family, growing the league to 32 teams. While the NHL, Pacific Northwest, and fans of the game are rightfully excited about the newest franchise, one group that should be rejoicing is the players. The addition of the Emerald City should have players excited about the possibility of seeing their salaries increase in the future.
The addition of a new franchise does more than just add another team to the league. As the Vegas Golden Knights proved, expansion of the game helps create playing opportunities throughout the world and raises the average player salary in the league.
The Seattle team is slated to take the ice starting in the 2021-22 season. Gary Bettman, the Commissioner of the NHL, stated that he believes the total investment by the ownership group will be around $1.4 billion before the first puck is dropped. This is a massive commitment. For more on the impact of the expansion on the city and league check out Carol Schram’s article NHL Approves Seattle Expansion Team To Begin Play In 2021-22 Season.
If Seattle follows the trends set by the Vegas Golden Knights, players will have a lot to be excited about. In particular, players are set to see an increase in average player salaries. Further, there will be even more players that can play the game at a professional level.[/vc_column_text][/vc_column][/vc_row][vc_row equal_height=”yes” content_placement=”middle”][vc_column][vc_column_text]Increase in Player Salaries
Before the most recent era of expansion, the NHL and the National Hockey League Players Association (“NHLPA”) agreed to a revenue-sharing structure that determines the salary cap.
The 2012 NHL Collective Bargaining Agreement (“CBA”) initiated several new revenue sharing features. Essentially, the CBA ensures that at the end of the season the players as a whole are receiving 50% of the total revenue generated by the league. The owners receive the other 50%.
Since entering into the 2012 agreement the salary cap and the average player salary has increased each year. With the introduction of the Vegas Golden Knights, however, the cap and player salaries took a significant jump.
In the 2016-17 season, the year before the addition of the Vegas Golden Knights, the NHL had a salary cap of $73 million. During this same season, the average NHL contract was worth $2,420,270.
The 2017-18 season had a salary cap of $75 million, an increase of $2 million over the previous year. Player salaries reflected this modest growth in the salary cap, growing by $8,694 or 0.35 percent, to $2,428,965. This growth was very modest given the 2.7 percent growth in the salary cap.
The incredible success of the Vegas Golden Knights culminating in a Stanley Cup Finals berth helped grow the revenue of the league and thus had a tremendous impact on the salary cap. The current salary cap is $79.5 million, an 8.9 percent increase from the 2016-17 season.
[/vc_column_text][vc_single_image image=”6243″ img_size=”full” alignment=”center”][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]The average player salaries entering into the 2018-19 season saw an even more dramatic increase to $2,728,201. The average player now makes 12.7 percent more than players did in the 2016-17 season.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_single_image image=”6244″ img_size=”full” alignment=”center”][vc_column_text]More Roster Spots
The addition of a new team in Seattle has already guaranteed an additional 80 NHL contracts for players that are not currently with a team.
The NHL CBA allows each team to retain the rights to 80 players. These players are either on the 23-man active roster or part of the team’s reserve list.
The addition of both Vegas and Seattle have increased the opportunities for players to play in the NHL from 2,400 spots to 2,560. The expansion of the NHL also has a domino effect across the world. Seattle will provide 80 new players the chance to play professionally. Most of these players will play in one of the many top leagues in Europe and Russia.
Seattle is poised to be one of the most exciting markets in the NHL and should have a significant impact on the league’s revenue numbers. The excitement of Seattleites for the new team is matched only by the enthusiasm of the players that should greatly benefit from the growth of the game.
Along with the new team, the NHL and NHLPA has made it clear that growing the game is a significant focus. This season has seen NHL games in Switzerland, Sweden, Germany, and China. Additionally, the World Cup of Hockey returns in 2020, which is owned and operated by the NHL and the NHLPA. The revenues from the World Cup are included when calculating the salary cap, which should give player salaries an extra boost.
The one thing that can derail the growth of player salaries is a labor dispute. Both the NHL and the Players Association have the option to opt out of the CBA in September 2019, and the deal is set to expire in 2020. As long as players don’t give up any ground on the revenue sharing aspect of the agreement, players should see the average salaries continue to rise.[/vc_column_text][/vc_column][/vc_row]