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The NHL Salary Cap from 2005 to 2012

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PITTSBURGH - OCTOBER 07: New logos are etched into the ice prior to the game between the Pittsburgh Penguins and the Philadelphia Flyers at the Consol Energy Center on October 7, 2010 in Pittsburgh, Pennsylvania.
Bruce Bennett/Getty Images

This article is specific to the 2005-2012 NHL seasons. Check this article for an update on how the cap works as of 2013.

NHL Salary Cap from 2005 to 2012:
  • Previous NHL Salary caps:
    2011-12: $64.3 million
    2010-11: $59.4 million
    2009-10: $56.8 million
    2008-09: $56.7 million
    2007-08: $50.3 million
    2006-07: $44 million
    2005-06: $39 million

The Salary Range:

  • Each season, the NHL establishes a salary cap and a salary floor, with the floor set about $16 million below the cap.
  • A club's total player salaries for the season cannot exceed the maximum or drop below the minimum.

The Players' Share:

  • The salary cap is set by assigning a percentage of all "hockey-related" revenues to player salaries.
  • In 2005, the first year of the salary cap, the players were guaranteed 54 percent of projected NHL revenues of just under $1.8 billion.
  • As revenues increase, so does the players' share. Estimates for the 2010-11 season had players getting about 57 percent of total revenues.

Defining a Player's "Cap Hit":

  • The "cap hit" is how much an individual player counts against his team's salary cap in one season.
  • On a multi-year deal, the cap hit is based on average annual value of the contract, not the actual salary paid each season.
  • For example, a player signs a three-year contract with the following annual salaries:
    - Year One: $7 million
    - Year Two: $5 million
    - Year Three: $3 million
    His salary cap hit is $5 million per year for three years ($15 million divided by three).

Counting the Cap:

  • Team salary expenditures are calculated on a daily basis from the first day to the final day of the NHL regular season.
  • A team is in compliance if it has not already exceeded the cap for the season, and if it could carry its current roster without exceeding the cap at the end of the season.
  • Counted against the cap: All players on the active roster, injured reserve or the long-term injured list. Players who have left the team on a contract buyout, according to a formula that charges a percentage of the buyout against the cap.
  • Not counted against the cap?: Players assigned to the minors or returned to junior hockey after signing an NHL contract.

Maximum Salaries:

  • A player's annual salary cannot exceed 20 percent of the salary cap, based on the cap as it stands in the year the contract is signed.
  • Terms and salaries remain in place for the life of the contract. The salary does not decrease if the cap drops, nor can a contract trigger a salary increase if the cap goes up.

Entry-Level Salaries:

  • Players between the ages of 18 and 21 must sign "entry-level" contracts for their first three NHL seasons. Those aged 22-23 are entry-level players for two years, those aged 24 for a single year.
  • Starting in 2005, the maximum entry-level salary was $850,000 per year. The limit rises throughout the CBA, to $925,000 in 2011.
  • Signing bonuses are capped at 10 percent of the player's salary.

The "35-and-Older" Clause:

  • When a player aged 35 or older signs a multi-year contract, his average salary is counted against the team's salary cap during every year of the contract, even if the player retires before the contract is up.
  • If the player is sent to the minor leagues, his cap hit is reduced by $100,000.

The Kovalchuk Amendment":

  • As of September, 2010, new rules apply to any contract that runs longer than four years and extends beyond the player's 41st birthday.
  • The cap hit will be the average salary every season in the contract up to the year after the player turns 41.
  • In subsequent seasons, the actual salary for that season will be the player's cap hit.
  • If any three years of the deal average more than $5.75 million, then none of years from ages 36 to 40 will have a cap hit of less than $1 million.
Long-Term Injuries:
  • A player expected to miss at least 10 games and 24 days due to injury can be listed as a long-term injury (LTI).
  • An LTI can be covered by replacement players, as long as the replacement salaries do not exceed the salary of the injured player.
  • If the replacement salaries would push a team over the salary cap, the team is allowed cap relief, but only for the portion of the salary that exceeds the cap.
  • When the injured player returns, the team must immediately comply with the normal terms of the salary cap.

Next page: Trades, bonuses, and buyouts under the cap.

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