HabsWorld.net --
The new economic realities of a new Collective Bargaining Agreement are all but imminent, and with that is a phrase that many owners and fans alike have been yearning to hear, a salary cap. Ideally, this will further add to the ever-increasing parity in the NHL, as all teams will be forced to spend a similar amount of money on player salaries. In other words, the era of the New York Rangers and others signing players to ludicrous deals will soon be over.
Although nothing is yet official, let’s look at some of the notable reported aspects of a cap. 54% of all defined league revenue will be allotted to player salaries. All players under contract after the now defunct 2004-05 campaign will have their salaries reduced by 24%. All players who play beginning in the next season (hopefully 05-06) will have 15% of their pay deducted and placed in an escrow account*. The reported payroll ceiling (maximum) will reportedly be between 36 and 40 million USD, and the floor (minimum) at about $24 million USD. It is reported that all signing bonuses and possibly incentive clauses will also be part of the cap.
* If the total player salaries for all 30 league teams exceed 54% of league revenue, the owners will receive a reimbursement of up to the 15% in the escrow account. If any money remains in the league escrow account after this, all remaining funds will be re-distributed to all league players on an equal basis. Some numbers for you now: At a cap of $36 M, total league revenue must equal or exceed $2 billion USD, and if the cap is at $40 M, league revenue must exceed approximately $2.2225 billion USD. All of this ties in with the 54% hard cap, if the percentage is different, these numbers will change.
Many Canadiens fans have been excited about this cap, believing that this will be beneficial to the team. Today, we’ll look at existing player contracts, as well as last year’s salaries, and breakdown the numbers stated above to get a better idea of how it will affect the team. First, we start with the players who are under contract for the 2005-06 season.
| Player | Original salary | New salary | Savings |
| Patrice Brisebois* | $4,500,000 | $3,420,000 | $1,080,000 |
| Craig Rivet | $3,000,000 | $2,280,000 | $720,000 |
| Radek Bonk | $3,150,000 | $2,394,000 | $756,000 |
| Sheldon Souray | $2,800,000 | $2,128,000 | $672,000 |
| Richard Zednik | $2,400,000 | $1,824,000 | $576,000 |
| Niklas Sundstrom | $1,300,000 | $988,000 | $312,000 |
| Steve Begin | $800,000 | $608,000 | $192,000 |
| Ron Hainsey | $750,000 | $570,000 | $180,000 |
| Cristobal Huet | $600,000 | $456,000 | $144,000 |
| Totals | $19,300,000 | $14,668,000 | $4,632,000 |
* Montreal has a $1 M buyout option on Brisebois that reportedly will not count against the cap.
This leaves the Habs with $23,332,000 to spend for 14 players (app. $1.67 M per player), assuming the cap is placed in the middle of the range at $38 M. If they opt to buyout Brisebois, Montreal would have $26,372,000 to spend on 15 players (app. 1.78 M per player). Now, even though it is impossible to predict what the Habs’ free agents will sign for, let’s do some analysis and drop their 04-05 salaries by 24% and see where we stand.
| Player | Most recent salary | Salary with rollback | Potential Savings |
| Mike Komisarek | $1,130,000 | $858,800 | $271,200 |
| Saku Koivu | $4,500,000 | $3,420,000 | $1,080,000 |
| Jason Ward | $800,000 | $608,000 | $192,000 |
| Pierre Dagenais | $500,000 | $380,000 | $120,000 |
| Alexei Kovalev | $6,500,000 (03-04) | $4,940,000 | $1,560,000 |
| Jan Bulis | $1,350,000 | $1,026,000 | $324,000 |
| Francis Bouillon | $500,000 | $380,000 | $120,000 |
| Jose Theodore | $6,000,000 | $4,560,000 | $1,440,000 |
| Mike Ribeiro | $1,550,000 | $1,178,000 | $372,000 |
| Michael Ryder | $605,000 (03-04) | $459,800 | $145,200 |
| Andrei Markov | $1,800,000 | $1,368,000 | $432,000 |
| Totals | $25,235,000 | $19,178,600 | $6,056,400 |
Because Kovalev (UFA) and Ryder (RFA) were unsigned before the lockout began, their 03-04 salaries were used. Other unrestricted free agents such as Yanic Perreault and Karl Dykhuis were not included as they are not expected to return to the team.
Now, the hypothetical payroll (after rollback on current contracts and a 24% reduction on old deals) sits at $33,846,600 for 20 players, meaning that there are still 3 more roster spots to be filled, some of which will be filled by current AHL players. Here are some of the notable AHL’ers who potentially could be in Montreal next season:
| Player | Most recent salary | Salary with rollback | Potential Savings |
| Chris Higgins | 1,180,000 | $896,800 | $283,200 |
| Marcel Hossa | $1,075,000 (03-04)* | $817,000 | $258,200 |
| Alex Perezhogin | 1,130,000 | $858,800 | $271,200 |
| Tomas Plekanec | $700,000 (03-04) | $532,000 | $168,000 |
| Totals | $4,085,000 | $3,104,600 | $980,400 |
* Hossa signed a 1-year contract this past offseason, but the financial details were not disclosed.
With these 4 players under contract, and all the ones above, the hypothetical total for the payroll is now $36,951,200. Keep in mind, most of these salaries are artificial, and Brisebois’s salary is also included. This leaves a bit of wiggle room left, but do not expect the Canadiens to spend as close to the ceiling (projected at $38 M). Here are a few points why:
– Existing bonuses and incentive clauses will be factored into team payroll
– The cap is expected to fluctuate up or down per season, and based on the prospective league revenues from earlier on, it’s probably going to go down next season, so it would be best to plan ahead.
– There is still a potential for a luxury tax, although it appears that may no longer exist.
Based on the above numbers, the Montreal Canadiens appear to be in somewhat decent shape when the new salary cap system is implemented in the near future. They likely won’t be big spenders in the market, but they should have enough ‘bling-bling’ to lock up their own, and ice a competitive team for next season.
