Ruled by the almighty salary cap, NHL teams often struggle to fit their budget within the financial confines established by the league’s Board of Governors. While much of the talk that surrounds the cap relates to the ceiling—the maximum a team can spend on their roster—the ever-increasing cap floor is starting to create problems for many franchises, including the Carolina Hurricanes.
The concept of a cap floor is vital to the success of quite a few teams. It forces smaller markets to invest enough money in players to win hockey games, even if it leads to financial losses. While the floor has its benefits, forcing teams to spend too much can create problems. This is especially true when that number continues to rise every year.
The salary cap floor for the 2011-12 season has been set at $48.3, and with the start of free agency underway, the Hurricanes may find themselves struggling to add enough money to their payroll. GM Jim Rutherford recently signed pending free agents Jussi Jokinen, Chad LaRose, and Joni Pitkanen to multi-year deals, but Carolina isn’t out of the woods yet.
“As you know, the floor’s gone to $48.3 (million),” Rutherford said last Saturday. “That raises our payroll just with that alone. I would suspect we’ll be a little bit higher than that. It’s certainly getting that payroll to a point where it makes it harder to make our business work the way it should.”
According to CapGeek.com, the ‘Canes are around $8.5 million below the floor after signing Jokinen Thursday afternoon. If Rutherford can’t get his team’s budget to $48.3 million in a reasonable way, he’ll have no choice but to start overpaying for players, either through free agency or via trade.
The NHL has experienced a lot of positive changes since the lockout in 2004, including a big rise revenue growth. Following the work stoppage, the cap ceiling was a meager $39 million, more than $9 million less than today’s floor. Due to consistent increases in league-wide profits, the cap has risen every year since the lockout, making it harder for small market teams like the Hurricanes to match up with the likes of Detroit, Montreal, and other financial-powerhouses.
The Hurricanes won the Stanley Cup in 2006–a time when the cap was far lower and the playing field much fairer. Six seasons later, Carolina will be spending as much as $15 million less than some of their competitors, making it difficult for them to compete.
The higher-echelon teams will spend as much as the NHL allows; by increasing the cap, the league is also increasing the gap between its small and big markets. This puts the Hurricanes at a growing disadvantage, placing them in a far different situation than they found themselves when they hoisted the Stanley Cup a short time ago.