BREAKING: The NHL’s pay cap might go up more than expected in 2025–26.

Once the NHL got back on its feet after the COVID-19 lockout, the price cap has gone up by 5% every year for the past few seasons. That rule, which was made because people thought the rebound from the pandemic would be slow, has made it so that players almost never have to pay back escrow… but the cap is now a lot lower than it was with the old method.

Elliotte Friedman of Sportsnet says that the salary cap could go up even more than expected in 2025–26. This is because there will likely be a new collective bargaining agreement (with, we think, a changed salary cap formula) the next season. Friedman talked about what was going on on Saturday’s Headlines:

The salary cap for next year is one of the stories we’ve been watching this week. As part of its autumn tour, the Players’ Association talks with all the players at this time of year. It’s become even more important since a CBA agreement is coming up next year.

As part of their conversation, they talk about the pay cap, which for next year is set at $92.5 million. We didn’t know what the world would be like after this deal was done because we were in the middle of COVID. The pay cap was set up with great care in case things didn’t get better. It’s a good thing for the NHL that their earnings have been high and have been going faster than the salary cap. So there are two main ways to go from here.

The first option is that they keep the cap at about 92 and a half next year. Then there’s a huge jump the following year, in 2026–27. This is what the players say they’ve been told: there’s a chance that the cap goes up next year, probably to around 95 to 97.

There’s still no word on which one will happen, but I’ve heard that it will be talked about, and there’s some hope that they can find a way to make it happen. But until it’s done, nothing else will get done. There is a chance of it happening, and the players have been told about it.

Before COVID, the old CBA set the salary cap based on estimates of hockey-related income (HRR). The HRR estimate was cut in half to find the 50% players’ share, which was then split between the teams. But because escrow was used to make sure that each season’s HRR split was exactly 50% owners and 50% players, and because the cap was based on estimates instead of actual revenues, it was very rare for a player with a $2 million salary to actually make $2 million. This made players unhappy.

For safety reasons and to make sure that HRR wouldn’t rebound too slowly after the pandemic, the “lag formula” was added to the 2020 CBA extension. This basically connects the pay cap to what HRR actually made in the past, not to what they think they will make in the future. Players no longer have to deal with the frustration of escrow, but the 50% income split is still based on HRR from a few years ago. The cap for the 2024–25 season is $88 million, which means that each player will get $2.816 billion and the team will have an HRR value of $5.632 billion. But the 2023–24 HRR was about $6.2 billion. The system isn’t giving players enough money, and it’s likely that this will be fixed in the 2018–19 CBA talks that begin in January.

Since league income is getting close to $7 billion and is projected to keep going up, it looks like the cap will also keep going up. If you use the lag method, the cap ceiling for 2025–26 would be about $92.5 million. This means that Friedman’s reported jump to around $95–97 million would be about $2.5–4.5 million more than most people thought. But if you believe Bettman that revenues are close to $7 billion, then a 50% player share cap number would be $109.4 million per team. And even with a changed lag formula that keeps the delay between revenue growth and cap growth the same, the cap number is going to go up by a lot in 2026–27.

As a general rule, league managers try to use cap growth to make up for mistakes made in the past, so this is good news for both players and managers.

We’ll have more on this story as it comes together.