Using the NHL’s estimated future salary cap to predict the Penguins’ future

Sep 29, 2022 - 12:00 PM

The news was good for NHL’s business last year in terms of making money. Deputy commissioner Bill Daly told The Athletic:

“I would say we exceeded our expectations this year on revenue,” Daly said. “And even our forecast, which is done fairly late in the season, we exceeded pretty dramatically. So a lot of the escrow balance actually got paid back this year, certainly more of it than we had originally projected.”

And Sportsnet reported more as far as what that could mean for the future.

The NHL salary cap rose for the first time in three seasons this year, setting at $82.5 million for 2022-23. As the league continues to recover from the revenue challenges presented by COVID and returns to normalcy, that upper limit should begin to rise considerably more in the coming years.

According to multiple sources NHL teams have been given some guidance on where the cap could be going over the next few seasons. Please understand these are projections and possibilities and an educated guess on where we could be going, not a guarantee of where things will be.

YEAR: POSSIBLE SALARY CAP

2022-23: $82.5 million

2023-24: $83.5 million

2024-25: $87.5 million - $88 million

2025-26: Approximately $92 million

It’s long been known that something close to the 2019-20 upper limit of $81.5 million would be in place for a while. If you don’t follow the numbers side of things very closely, no problem, let’s catch up.

The NHL pays players half of the total revenue that they make and that revenue was almost turned off in early 2020 with the pandemic hit. Since many players had guaranteed contracts in place that still were paid from 2020-22, even though the league/owners were pulling in less money than expected, that has created the current crunch. That crunch created a situation where the salary cap has not going up for the players, in the most basic way to put it.

With new revenue streams like the new television deals with ESPN and Turner plus items like those pesky jersey ads, the league is finding new ways to make money. That is good news for players and for growth of the NHL in the future getting back on track.

Having that in mind, it will still be a while before dramatic changes kick in to change the new normal. Next year’s salary cap is only expected to take a small $1 million step up from this season’s (2022-23). After that, the floodgates should loosen up when the NHL and players have been evened up from the pandemic days, and then bigger advances in the salary cap will occur.

At this point, it is worth cautioning that the estimates above are still very rough and completely up in the air to forecast as far as what could happen by 2025-26. That said, the NHL expects the status quo from 2019-24 to finally be broken in the fall of 2024, so we can expect the same.

With all that said, it’s always fun to project into the future as far as what the salary cap could mean for the Penguins.

Though the Pens have the reputation of having a lot of contracts and older players locked up for a long time, here are their salary commitments (and buyout of Jack Johnson) that are on the books for the future, via CapFriendly.

2023-24: $63.4 million for 15 players
2024-25: $47.7 million for nine players
2025-26: $23.2 million for four players (those being Kris Letang, Evgeni Malkin, Bryan Rust and Rickard Rakell)

For 2023-24, the Pens should expect have about $20 million to work with in rounding out their team. Of course, that $20 million must go largely to re-signing or replacing key players like starting goalie Tristan Jarry, a top-pair defender Brian Dumoulin, a top-six forward Jason Zucker and a host of lower lineup players like Danton Heinen, Teddy Blueger, Ty Smith and Drew O’Connor who will be free agents next summer.

The news gets better as time goes on, with sizeable increases expected to happen for the 2024-25 season. This will also be the summer that Jake Guentzel’s next contract would kick in. Not that he could help it, but it’s really fortunate timing on Guentzel’s part that his contract happens to be coming up just as the league-wide finances also open up. (Charmed life for that Jake, I tell ya).

What could the Penguins look like next year? It’s impossible to forecast what in-season trades might happen and players that could stick around (hello Jeff Carter and Rickard Rakell), but this is a starting road map:

Baseline 2023-24 Penguins

Jake Guentzel ($6.0m) - Sidney Crosby ($8.7m) - Bryan Rust ($5.125m)
1111111 - Evgeni Malkin ($6.1m) - Rickard Rakell ($5.0m)
2222222 - Jeff Carter ($3.125m) - Kasperi Kapanen ($3.2m)
Brock McGinn ($2.75m) - 3333333 - 4444444

5555555 / Kris Letang ($6.1m)
Marcus Pettersson ($4.025m) / Jeff Petry ($6.25m)
6666666 / Jan Rutta ($2.75m)

7777777
Casey DeSmith ($1.8m)

As you can tell, I’ve used placeholders that take the role/spot for positions that the Penguins do not currently have under contract for 2023-24. I’m also not forecasting any buyouts or trades, which presumably could happen but are also impossible to predict with any accuracy.

This roster, plus the Jack Johnson buyout ($916k next year) puts the Pens at $61.9 million in salary. The CapFriendly number cited above is a little higher — they factor in both Chad Ruhwedel and Mark Friedman. It’s possible either or both could still be with the Penguins 12 months from now, but then again, they also might not. As a very tenative shell, I’ll start with the assumption those two are of the books, either waived and in Wilkes-Barre or waived/traded and on other teams.

From the above, this Penguin team would be looking at $21.6 million in cap space against a $83.5 projected upper limit. We’ll call it $20.0m even, setting aside $800k a piece for a 13th forward and seventh defender (perhaps one of Ruhwedel/Friedman, should there be a survivor, and then someone like Drew O’Connor or Ryan Poehling, whomever the Pens want to keep one of those restricted free agents for 2023-24).

Starting in reverse..

Spot No. 7 (starting goalie)

This should be Tristan Jarry. Even though the goalie market has been fairly set, “price of the brick going up” as they said on The Wire. After seeing Spencer Knight get $4.5 million based on potential, Jarry should be in a great position of his own financially moving forward. With that in mind, we’ll err on the side of being conservative for his extension being a $6.0 million hit for a long-term deal. Easily enough math, that takes us from $20.0 to $14.0 million in cap space remaining in this exercise.

Lineup position No. 6 (third pair LD)

Let’s be optimistic and hope it’s Pierre-Olivier Joseph. Joseph is signed for 2023-24 at a $825k cap hit. Penciling him in to be a full-time NHLer by that point feels right, and you can’t beat the price, leaving $13.175m of space left.

Placeholder No. 5 (first pair LD)

In a reach today, we’ll put Ty Smith here. Smith probably can’t play 20-22 minutes per game like Dumoulin, but eventually perhaps Smith will get there. Maybe in a perfect world, Smith gets bumped down to the third pair in 2023-24 and the Pens invest a lot in a top pair guy, but this is an area where Pittsburgh actually has young talent, so why not use it?

This summer Alex Romanov ($2.5x3) and Adam Boqvist ($2.6x3) signed bridge deals after their entry level contracts. That feels close to right for Smith in a best case scenario for 2022-23 results. Let’s set his salary at $2.55m for a bridge deal, which leaves the team with $10.625 million of cap space.

Lineup spot No. 4 (fourth line winger)

It would be great if this could be a minor league graduate currently in the organization like Valtteri Puustinen or Filip Hallander. And perhaps it could be in some version of reality, but that’s not going to be this projection. Given tendencies of Penguin management, I will say this spot gets filled by a middle-aged energy, grinding PK winger free agent signing. I’m going go with Nicolas Aube-Kubel or that type of player for $1.1 million. Hextall drafted Aube-Kubel, so that would be carry some logic. Name could change as to who it really is, but just taking that money for this spot, we’re now at $9.525 million cap space left.

Placeholder No. 3 spot (fourth line center)

This position is going to be an internal promotion. The Pens love the strides that Sam Poulin has made. He’s young and transitioned from wing to center and is improving all the time. Poulin should be totally ready by 2023-24 at this rate. Poulin is still on his entry level contract at $863k, which is another big plus and would leave this projected team with $8.66 million of cap room left after this move.

Lineup spot No 2. (third line winger)

The Pens are well-positioned to be able and sign a Jesper Fast, J.T Compher type of supporting third line player with some pop here. I’ll choose Trevor Moore, (LA Kings product that Hextall and company also are very aware of) for a hypothetical $2.75 million contract for a few years. That puts us at $5.91 million left under the cap.

Lineup spot No. 1 (top-six winger)

The Pens won’t get a premiere top-end player with what money they have left in this projection, but perhaps they can be the team who is on the receiving end of a “Max Pacioretty for nothing” type of trade from another team in a salary jam. I’ve liked the job Michael Bunting has done in a support role in Toronto. He scored 63 points last year, only five on the power play and while playing 15 and a half minutes per game. I’m guessing Toronto surely won’t be able to fit him in their salary cap structure, so why not pay him $5.5 million to come be super-productive with talent in Pittsburgh? If Bunting has a huge season and out-prices himself then the name is less important compared to having $5.5 million to add a good prime-aged player via trade or free agency (Tyler Bertuzzi or Alex Killorn/James van Riemsdyk/Pacioretty himself on a short deal that could stand in as alternative choices).

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Putting the pieces of the puzzle together, that makes my super-early, sure-to-go-wrong 2023-24 possible projected Penguin lineup look like this, before acknowledging that any trades of players under contract would shuffle the deck up further.

Potential Pens 2023-24 roster

Jake Guentzel ($6.0m) - Sidney Crosby ($8.7m) - Bryan Rust ($5.125m)
Michael Bunting ($5.5m) - Evgeni Malkin ($6.1m) - Rickard Rakell ($5.0m)
Trevor Moore ($2.75m) - Jeff Carter ($3.125m) - Kasperi Kapanen ($3.2m)
Brock McGinn ($2.75m) - Sam Poulin ($863k)- Nic Aube-Kubel ($1.1m)
Extra: Drew O’Connor $800k

Ty Smith ($2.55m) / Kris Letang ($6.1m)
Marcus Pettersson ($4.025m) / Jeff Petry ($6.25m)
P.O. Joseph ($825k) / Jan Rutta ($2.75m)
Extra: Chad Ruhwedel $800k

Tristan Jarry ($6.0m)
Casey DeSmith ($1.8m)

Total salary: $82.1 million, plus the $916k buyout penalty = $83.0 million on the books..
Projected cap: $83.5m (leaving ~$500k of space, enough for short-term injury call-ups and then quick demotions)

What do you think? It is a little weak on defense, and in the next 12-18 months the Pens will need Smith, Pettersson AND Joseph to all step their games up in a major way. That may or may not happen.

It’s tough to wave goodbye to Dumoulin and Blueger, but lower cost replacements from within the organization would open up more salary cap space to add some great supporting forwards — even if it won’t be exactly the names projected here.

We’ll only see the twists and turns of what happens 12 months from now when we actually get to September 2023, what would you like the Pens to look like as they approach the future?