Why a flat salary cap is possible

AP
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PITTSBURGH — This may finally be the year that something’s done about escrow.

And the result could be a flat salary cap.

“One of the issues that we hear from the players’ association that causes concern to the players is the escrow,” NHL commissioner Gary Bettman said Monday before Game 1 of the Stanley Cup Final.

“Obviously the higher the cap goes, the more exacerbated the escrow problem becomes. Certainly our position with the players’ association has been that we’ll manage the cap tighter and keep it lower to try to address the escrow situation, if that’s your preference.”

One way to keep the cap lower would be to nix the annual five percent growth factor that’s written into the CBA.

It sounds easy, but that wouldn’t be everyone’s preference. On both sides.

“We certainly have some clubs who have an interest in having the cap go up every year … and we have some clubs who don’t want the cap to go up every year,” deputy commissioner Bill Daly said Monday. “Same on the players’ side. A certain segment of the population would like a bigger cap, which creates more opportunity, particularly for free agents in terms of signing new contracts. And there’s a significant portion of players, apparently, who have concerns that the higher the cap goes, the escrow goes up as well.”

Related: To understand escrow issue, consider Duncan Keith

Escrow is hardly a new concern for the players, and there’s been plenty of talk the last few years that the growth factor could be renegotiated to zero. But the only time that actually happened was the 2006-07 season.

So, why should we expect anything different this year?

“Because we heard, I think for the first time, this year a really strong sentiment on the escrow,” said Daly. “Our position is if that’s a huge concern for the players, one way to start to address it is to keep the cap lower.”

The league and players’ association will discuss the matter this week, at which point an alternative growth factor could be proposed. If there’s no growth factor, the cap could stay right around its current level of $73 million.

But one thing the NHL won’t consider is a change to the actual system.

“Escrow is part of the deal,” said Daly. “It is what makes the system a 50-50 split between the clubs and the players. You take escrow out of the equation, you don’t have a 50-50 deal anymore. I don’t know how you’d address escrow, unless you change the system in a material way, which certainly is not something our clubs are interested in doing right now.”

Daly was asked if he sensed that some of the players didn’t truly grasp the system.

“I can’t speak for the players, but the mechanism is now 12 years old,” he said. “So if you weren’t a player in this league 12 years ago, and you don’t know what the origins of the escrow are and what they were intended to do, sure, there could be a misunderstanding. You view it as, ‘It’s just a tax on my salary paycheck, and if the Canadian dollar stays where it is, it’s a pretty significant tax on my salary. So let’s do something about the escrow.’ I get it, but escrow is a material element of the system.”

At any rate, a flat salary cap could be a significant issue for some of the NHL’s big-spending teams. Just this morning, for example, Capitals GM Brian MacLellan said that T.J. Oshie could be re-signed if the cap goes up to $77 million, but that would require the five percent growth factor to kick in.