{"id":829710,"date":"2026-07-27T18:30:15","date_gmt":"2026-07-27T18:30:15","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/829710\/"},"modified":"2026-07-27T18:30:15","modified_gmt":"2026-07-27T18:30:15","slug":"opinion-nhl-contract-critiques-continue-to-ignore-historic-cap-inflation","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/829710\/","title":{"rendered":"Opinion: NHL Contract Critiques Continue to Ignore Historic Cap Inflation"},"content":{"rendered":"

I stumbled into the X hockey realm last week and saw that Brett Kulak\u2019s 5 x $4.5M is a new \u201cworst contract in the league\u201d according to a couple of different NHL news outlets.<\/p>\n

Once I got through the convoluted bias of Oiler fans, it seems most, at a minimum, think the five-year term isn\u2019t good business.<\/p>\n

If that\u2019s your take, you still don\u2019t have a firm grasp of how the salary cap inflation is currently skyrocketing. My economics background has led to compulsion, as I feel it is my duty to give people a very clear understanding of how the cap is changing, how that will incentivize longer-term deals (from the organization\u2019s standpoint), and how that should be weighed when analyzing a newly inked contract.<\/p>\n

Numbers Paint the Picture of a New Normal<\/p>\n

One thing needs to be made abundantly clear. This era of cap increases isn\u2019t acknowledged as it should because the league has never experienced growth like this in such a small time frame.<\/p>\n

To prove it, I\u2019ll start with how the cap has changed since the hard cap was introduced back in 2005-06 and then show what it\u2019s done\/will do from 2025-2028.<\/p>\n

The NHL agreed on a $39 million flat cap back in 2005-06, but fast forward 20 years, and it has risen to $95.5 million. That\u2019s a 145% increase with a compounding annual growth rate (CAGR) of about 4.6% from 2005-06 to 2025-26.<\/p>\n

Now, the jump from $95.5 million to the projected $113.5 million in 2027-28 is the largest absolute increase in the history of the NHL salary cap. That\u2019s a CAGR of ~9.02%, which is essentially double what it\u2019s done since the cap was introduced. For more perspective, the NFL and NBA have experienced an 8% & 8.3% (respectively) CAGR in the same time frame.<\/p>\n

The absolute NBA and NFL salary caps are astronomical compared to the NHL, but yes, in two years, the NHL cap has grown at a higher rate than two of the most prominent sports markets in the world.<\/p>\n

\"\"<\/a><\/p>\n

Okay, we have the full picture; now, how is this information being applied?<\/p>\n

Overpay or Overstay? How About Neither<\/p>\n

In an era of extreme inflation, the two parties involved, players and organizations, will have to alter their approach a bit.<\/p>\n

On the one hand, players will likely lean more toward shorter terms to get back into the FA market at a higher salary cap. We see this in Jason Robertson\u2019s one-year deal in Dallas.<\/p>\n

Now the flip side is that organizations are willing to slightly overpay in the here and now to lock in the savings benefits of long-term deals and AAV staying the same as the cap rises year after year. That\u2019s the Bowen Byram deal.<\/p>\n

Another approach can be extending a player\u2019s term without notching down the AAV, knowing that the % of cap hit will decrease the most (assuming even a conservative CAGR) in the later stages of the deal. This is the Brett Kulak contract.<\/p>\n

It\u2019s still risk vs. reward for organizations, but the highest risk a front office can take is a short-term deal.<\/p>\n

Did Leo Carlsson get overpaid? Probably this year, but probably not next or the three final years of his contract.<\/p>\n

As constructed and assuming a 6% CAGR, Leo Carlsson will take up roughly as much of the cap in the last two years of his contract as Leon Draisaitl does right now (~13%), only he won\u2019t be a 30-year-old; he will be 25 & 26 years old and in his prime. Two teams were willing to make Carlsson the centerpiece going forward, so to compare him to Leon is fair in my opinion. It\u2019s not an overpay.<\/p>\n

Now let\u2019s apply this projection to the other contracts I listed.<\/p>\n

Bo Byram\u2019s contract will already be at under 11% of the cap next season, and by the time he\u2019s in the last two years of the deal, he\u2019d be taking up less than 9% of the cap. For comparable players, Evan Bouchard, Thomas Harley, Drew Doughty, and Rasmus Dahlin all currently make ~10% of the cap. Bo Byram is in his prime right now and has half as many Stanley Cup rings as all four of those defenders combined. It\u2019s not an overpay.<\/p>\n

Finally, Brett Kulak\u2019s deal.<\/p>\n

Safe to say in years four and five, the Avalanche will look at Brett as a stay-at-home 6 or 7D. Once we get there, he will be taking less than 3.5% of the cap. That\u2019s roughly the amount of cap percentage that Brayden McNabb is currently taking home. Sounds like a reasonable figure for a veteran shutdown defender, and it\u2019s already happening. It\u2019s not an overstay or an overpay.<\/p>\n

So there you have it: right now, more than ever, it\u2019s incredibly important to weigh the long-term cap percentage cost against the upfront cost, both in terms of the AAV and the term of the contract.<\/p>\n

Moreover, if you see a team land a player for a max term these days, that player really wants to play for that team, because it\u2019s not just \u201cbetting on yourself\u201d when taking short-term deals anymore. It\u2019s also betting on the continuance of the largest compounding growth of the NHL salary cap in the history of its implementation.<\/p>\n

Let us know what you think in the comments!<\/p>\n","protected":false},"excerpt":{"rendered":"I stumbled into the X hockey realm last week and saw that Brett Kulak\u2019s 5 x $4.5M is…\n","protected":false},"author":2,"featured_media":829711,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[433],"tags":[289827,49,48,94328,448,82],"class_list":["post-829710","post","type-post","status-publish","format-standard","has-post-thumbnail","category-nhl","tag-avalanche-analysis","tag-ca","tag-canada","tag-colorado-avalanche-feature-stories","tag-nhl","tag-sports"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/829710","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=829710"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/829710\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/829711"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=829710"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=829710"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=829710"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}