Trade Deadline 101: Cap Space and How to use it.

The National Hockey League (NHL) has a salary cap that limits the amount of money a team can spend on player salaries in a given season. In this post, we’ll explore how NHL teams can use cap space to their advantage. All this info was gathered by digging into our lovely amazing friends at CapFriendly!

But first, What is the NHL Salary Cap?

The current salary cap for the NHL is $82.5 million for the 2022-23 season, which is a slight increase from the last season. The salary cap is a tool that helps to promote parity among the teams in the league by limiting the amount of money that teams can spend on player salaries.

How is the Salary Cap Calculated?

The salary cap is calculated based on the league’s hockey-related revenue (HRR) from the previous season. The HRR is divided equally among the 32 teams in the league, and the resulting amount is used to determine the salary cap for the upcoming season.

What are the Consequences of Violating the Salary Cap?

Each team is required to stay under the salary cap, which is a hard cap, meaning teams cannot exceed it at any point during the season. If a team is found to be in violation of the salary cap, they can face penalties, including fines, loss of draft picks, or even the voiding of player contracts.

Exceptions to the Salary Cap

There are some exceptions to the salary cap, however. For example, teams are allowed to exceed the cap in certain situations, such as when signing their own restricted free agents, or when using a long-term injured reserve (LTIR) exemption for injured players. In addition, there are some player contracts that are exempt from the salary cap, such as entry-level contracts for rookies and certain performance bonuses.

One of the ways teams can use their cap space is by taking on unwanted contracts from other teams in exchange for draft picks or prospects. This strategy can provide significant benefits to the acquiring team, as they can receive valuable assets while taking on a contract that another team may no longer want. For example, in 2018, the Arizona Coyotes acquired Marian Hossa’s contract from the Chicago Blackhawks in exchange for Vinnie Hinostroza, Jordan Oesterle, and a third-round draft pick.

Another way teams can use their cap space is by signing free agents to short-term contracts with the intention of flipping them at the trade deadline for more assets. This strategy is commonly used by playoff-contending teams looking to bolster their roster for a deep playoff run. For example, in 2019, the Columbus Blue Jackets signed Matt Duchene to a one-year contract with the intention of flipping him at the trade deadline. They were able to trade him to the Nashville Predators for multiple draft picks and prospects.

To maximize the benefits of cap space, teams should engage in strategic planning and careful consideration. It’s important to assess a player’s value before committing to a long-term contract or taking on an unwanted contract. Additionally, teams should be mindful of their long-term goals and future cap space commitments when signing players.

In conclusion, cap space is an essential resource for NHL teams looking to build a successful, sustainable franchise. By taking on unwanted contracts, signing short-term contracts for flipping players, and signing long-term contracts for stability, teams can use their cap space to their advantage. To maximize the benefits of cap space, teams should engage in strategic planning and careful consideration. How do you want to see the Canucks “weaponize” their cap space as both Thomas Drance of the Athletic and Sportsnet 650 and Matt Sekeres of the Sekeres and Price Show keep saying? Sound off on Twitter or Facebook!