Advantages, disadvantages and other options for a luxury tax system in the NHL

The NHL’s salary cap makes it nearly impossible to sustain sustained success, which is good, but could it be better?

The NHL has several teams against the cap, the Toronto Maple Leafs, Vegas Golden Knights and Tampa Bay Lightning, to name a few. They have big guys who signed for big money, and guys in roles who signed for cheap (as a lot of teams are managed, that’s nothing new). But, when the playoffs roll around, the NHL’s salary cap is thrown out the window.

Yes, seeing the same team in the final for four to five consecutive years is not the best for the game. The beauty of the NHL compared to other major leagues is how difficult it is to build a winning team and staff. That said, could a luxury tax help the NHL sustain long-term fan interest? I’ll go over both options here, and one final point at the end of the article.

  1. Why the NHL should use a luxury tax
  2. Why the NHL shouldn’t use one
  3. A simpler option

Why the NHL should have a luxury tax system:

Let’s get to the team I have in mind, the Vegas Golden Knights.

The NHL has cracks in the cap, as I’ve talked about before (you can read about it here) and the league knows teams will bend the rules and play their cards to bend the rules. It’s unfair to the other contenders who need to keep their roster healthy in the playoffs. Other teams, like the Golden Knights, have a massive addition in mark the stone for the playoffs alongside Jack Eichel. The Golden Knights are about 10 million above the $82.5 million ($91.522 million) cap with Mark Stone and Alec Martinez in LTIR.

Then there are teams with massive contracts on their payroll, like the Toronto Maple Leafs and Edmonton Oilers. Connor McDavid makes $12.5 million a year and the Maple Leafs have four guys who make up more than half of their cap space, led by Matthew Austonof $11.64 million. A ten million dollar cushion could add massive hire to make a serious run at the Cup.

With the $10 million luxury tax, teams can build strong teams without cheating the cap while maintaining the same difficulty it takes to win the Stanley Cup. The top teams in the league that are able to struggle at the moment have to pay a tax rate that would be split evenly among the teams that haven’t exceeded the salary cap as compensation.

No one is pointing out the huge difference between where your team is and the current salary cap (Tampa Bay and Chicago) after you win the Cup AND you pay their team with a big check.

Now let’s move on to the next part.

Comments are closed.