The NHL salary cap is formally titled the "Upper Limit of the Payroll Range"
in the new CBA. For the
2005–06 NHL season, the salary cap was set at
US$39
million per team, with a maximum of $7.8 million (20% of the team's
cap) for a player. Revenues for the six Canadian teams have all
increased significantly since the lockout, and due to the fact the
Canadian dollar rose to briefly reach parity with its U.S. counterpart
(the Canadian dollar has since fallen to around 88 US cents, still
significantly above its lows around 2000), league-wide revenues
measured in U.S. dollars have been inflated accordingly.
As a result of these factors, the cap has been raised each year to its current
figure of $56.8 million for the
2009–10 season,
with a cap of $11.36 million for a player.
[4]The CBA also contains a "Lower Limit of the Payroll Range", which is
the minimum that each team
must pay in player salaries. The lower limit was originally set at 55% of the cap, but is now defined to be $16 million below the cap; therefore
the 2009–10 minimum is $40.8 million. The difference between the salary
cap and a team's actual payroll is referred to as the team's "payroll
room" or "cap room". Each year of an NHL player contract, the salary
earned contributes to the team's "cap hit". The basic cap hit of a
contract for each year it is effective is the total money a player will
earn in regular salary over the life of the contract divided by the
number of years it is effective. This prevents a team from paying a
player different amounts each year in order to load his cap hit in
years in which the team has more cap room. Teams still use this
practice, however, for other reasons.
