Salary Cap Percentage, Defencemen, and Implications of the New CBA

Charles LeClaire-USA TODAY Sport

A little while ago I looked at salary cap hits as a percentage of the cap and discovered that the Jets are sitting pretty where they are, but why is cap hit percentage is key.

When I first introduced the idea of salary cap percentage as the way to talk about a players contract it was purely to see if I could learn anything by looking beyond the dollars and cents, but there is a key reason why this concept should become a dominant way of thinking: the salary cap and its meteoric rise. Below I have a chart with the salary cap since it was introduced in 2005.

Season Upper Limit
2005/06 $39 million
2006/07 $44 million
2007/08 $50.3 million
2008/09 $56.7 million
2009/10 $56.8 million
2010/11 $59.4 million
2011/12 $64.3 million
2012/13* $70.2 million
2013/14 $64.3 million
2014/15 $69 million

*lockout year

As you can see, since the salary cap was introduced for the 2005-2006 season the salary cap has rose $31 200 000 in seven years, an average of $4.46 million a season. The upper limit of the salary cap is now $30 million higher than it was nine years ago. Why is this important? Because players salaries have risen alongside the cap and the only way to fairly evaluate salaries against each other is to first measure them against the cap under which they were signed.

Defencemen:

I have elected to look at some of the big name defenders and their salary cap hits, the cap percentage when their deal started, and their cap percentage under the current upper limit.

RFA

To properly do this exercise, I split the players up into those who signed as RFAs and those who signed as UFAs because RFAs have less leverage than UFAs and will typically sign for less money.

Player Cap Hit Percentage when Signed Current Percentage
Zach Bogosian $5 142 857 8% (signed in 2013/14) 7.4%
Shea Weber* $7 857 143 11.2% (signed in 2012/13) 11.4%
Drew Doughty $7 000 000 10.8% (signed in 2011/12) 10.1%
Justin Faulk $4 833 333 7% (signed in 2014/15) 7%
Oliver Ekman-Larsson $5 500 000 8.6% (signed in 2013/14) 8%
Alex Pietrangelo $6 500 000 9.3% (signed in 2012/13) 9.4%

As you can see, the two players with the highest cap hit percentage were signed before the cap dipped in 2-13/14. Shea Weber was signed to a 14 year offer sheet and his cap hit under the new CBA rules is two charts down. Zach Bogosian's contract is not the worst thing in the world, it is certainly not great.

UFA

Player Cap Hit Percentage when Signed Current Percentage
Tobias Enstrom $5 750 000 8.9% (signed in 2013/14) 8.9%
Kris Letang $7 250 000 10.5% (signed in 2014/15) 10.5%
Duncan Keith* $5 538 462 9.3% (signed in 2010/11) 8%
Zdeno Chara $6 916 667 10.8% (signed in 2011/12) 10%
Ryan Suter* $7 538 462 10.7% (signed in 2012/13) 10.9%
Andrew MacDonald $5 000 000 7.2% (signed in 2014/15) 7.2%

*Signed under the old CBA and contract is over the new limit of 8 years.

Toby Enstrom's contract is good value for the team considering his importance. Kris Letang's may end up being a hurdle for the Pittsburgh Penguins if the salary cap rises at a rate that is slower then expected.

Finally, because three players are signed for more than the allowed 8 years under the current CBA, I have chopped off their years over the limit to adjust their cap hit because the end years which lower the cap hit are no longer allowed.

Player Adjusted Cap Hit Actual Length of Contract Cap Hit Percentage Adjusted (2014/15)
Shea Weber $11 500 000 14 years 16.7%
Duncan Keith $7 343 750 13 years 10.6%
Ryan Suter $8 000 000 13 years 11.6%

As you can see, when you knock off those extra years, both the cap hit and the percentage of salary cap rises significantly. In the case of Duncan Keith his initial cap hit is lower than Toby Enstrom's, but once the term limit is imposed on his contract his cap hit is significantly more then Enstrom's. The other interesting observation is there is not much cap savings in signing RFAs versus UFAs. It is generally thought that buying out UFA years is more expensive, so this may be reflected in the cap hits.

Conclusion:

When comparing contracts of players, look at their cap hit percentage when they signed their contract. Although I adjusted three of the contracts to reflect the current CBA rules, that is simply to put things into perspective that players are now signing contracts for higher AAVs as teams can no longer tack on years to bring the AAV down.

The other thing to take away from this exercise is that good players will always get paid, whether they are a RFA or an UFA. The three cap hits that I adjusted was to show how the new CBA will affect contracts in the future. If you see AAVs higher, the CBA is to blame and not that players are getting paid more throughout their prime years. The prime years stay the same, but the maximum term stated in the new CBA doesn't allow for extra years for a lower cap hit.

As the salary cap fluctuates, looking at cap hits as a cap percentage allows us to see the real steals of the NHL and how those contracts came to be.

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