The NHL’s hard salary cap has created a tightrope for general managers, limiting in-season trades and stifling roster flexibility. By American Thanksgiving, many teams already find themselves locked out of playoff contention, unable to make impactful changes. As we recently explored, many teams are wanting to complete trades at we speak, but cannot find ways to do so this early in the season.
To address these challenges, it’s time to rethink the rules and implement innovative solutions that would not only facilitate player movement but also inject excitement into the season. Here are several ideas to make that vision a reality.
Here are several ideas the NHL could consider to facilitate in-season player movement and trades, addressing the challenges posed by the hard salary cap:
1. Flexible Retention Terms
• Allow teams to retain salary on a year-by-year basis rather than for the entire remaining term of a player’s contract. Ex: if a player has two years left to his contract, the team can retain for the current year but not the rest of the contract.
• Alternatively, allow teams to designate retained salary to decrease annually, creating more manageable long-term cap hits. Ex: For that same player, the team could retain 50% this season and 20% the next season.
2. Trade Exception Mechanism
• Create a “trade exception” system where teams can trade a player and temporarily exceed the salary cap, provided they get under the cap within a set time frame (Ex: 30 days).
• Teams could also receive trade exceptions for unused cap space from the previous season, usable for in-season trades.
3. Cap Exemptions for Minor League Call-Ups
• Allow teams to trade a player and temporarily exclude a minor-league replacement’s cap hit from the salary cap calculation for a short period.
4. In-Season Buyout Option
• Allow teams one in-season buyout option that grants immediate cap relief, but defer the cap penalty to the next offseason.
• The penalty could be spread over multiple years or capped at a percentage of the player’s annual average value (AAV).
5. Cap Banking
• Allow teams to “bank” unused cap space from earlier in the season to use in trades or signings later in the year.
6. Variable Buyout Terms
• Introduce an “accelerated buyout” option for in-season buyouts, allowing teams to take a larger cap hit over fewer years. For example, a two-year buyout penalty instead of the standard formula.
7. “Draft Pick Exchange” for Cap Relief
• Allow teams to “purchase” cap space by trading draft picks to the league. This would function as an incentive-based cap relief system.
8. “Early Bird Trade Bonus”
• Teams making trades before the Christmas freeze could receive a cap bonus or credit. Ex: 1–2% of the player’s traded salary doesn’t count against the cap for the remainder of the season.
Modifications to current system
Lastly, in order to make the league more equitable, the NHL must close a couple of loop-holes for which a few teams have taken advantage of in recent years.
1. Post-Season Cap Adjustment
• Implement a post-season salary cap with a “per player average” for an expanded roster.
2. End-loaded deferred salary
• Put an end to the current loop-hole of differed salary, with is clearly in circumvention of the salary cap.
Some of these ideas could make the NHL more dynamic, helping teams improve in-season and creating a more competitive league. However, each would require negotiation with the NHL Players’ Association and careful consideration to maintain competitive balance.
Adapting the salary cap to address these challenges would make the NHL more equitable, dynamic, and competitive. By introducing mechanisms like flexible retention terms, cap banking, or pre-Christmas trade incentives, the league could empower teams to adjust on the fly. Closing existing loopholes, such as deferred salary structures, would ensure fairness across all franchises. These changes might require negotiation and compromise, but the potential to enhance the league’s appeal and competitiveness is well worth the effort.
