NHL Cap Ceiling Increase and Upcoming Player Contracts

Last week, the NHL and NHLPA announced significant developments regarding the salary cap. Following a period of stagnation in player salaries due to the pandemic, the cap ceiling is set to rise considerably over the next three years. The current ceiling of $88 million is projected to reach $95.5 million for the 2025-26 season, $104 million for 2026-27, and as much as $113.5 million by 2027-28. To provide some context, the NHL's salary cap was $81.5 million during the pre-pandemic 2019-20 season, with a modest increase to $88 million in the 2024-25 season. The anticipated financial boost represents a substantial change for the league, especially with three-year projections now available, which will allow teams and players to negotiate with a clear understanding of potential future increases.

One player likely to benefit from these changes is Artemi Panarin, currently one of the highest-paid wingers in the NHL. Panarin signed a seven-year contract worth $81,499,999 in 2019, which will expire at the end of the 2025-26 season as he approaches 35 years old. With a career-high 120-point season in 2023-24 under his belt and a cap hit of over $11.5 million, it is reasonable to expect his next contract to reflect a significant increase, keeping pace with the rising salary cap. The New York Rangers, who recently signed Igor Shesterkin to a contract with an average annual value (AAV) exceeding $12 million, have the financial flexibility to negotiate a deal for Panarin following their trade of Jacob Trouba's large cap hit. With the salary cap projected to rise to $95.5 million in 2025-26 and $104 million in 2026-27, one can estimate Panarin's new cap hit could fall between $13 million and $16 million. The term of the contract could present a fascinating factor given Panarin's experience and declining age, influencing the overall AAV.

Another notable player on the horizon is Cale Makar of the Colorado Avalanche, who is anticipated to command a substantial extension by the end of the 2026-27 season. Makar, a top defenseman in the league, will be 28 when his current six-year, $54 million contract with a $9 million AAV concludes. With negotiations expected to follow the trend of rising salaries, he is poised to secure one of the largest contracts for a defenseman, with current benchmarks set by Erik Karlsson at $11.5 million. Given the growth in the salary cap, one can expect Makar's cap hit to align closer to approximately $14.69 million, reflecting 13 percent of projected future caps.

As the 2023 No. 1 draft pick, Connor Bedard will begin his second contract in the 2026-27 season, coinciding perfectly with considerations for a lucrative deal. Although Bedard experienced a slight slump earlier in the season, his performance has improved in the latter half. The Chicago Blackhawks' cap space is strategically positioned around Bedard, who is set to become the team’s top center. Historical data shows that star centers often demand high salaries, with players like Connor McDavid and Auston Matthews previously securing over 15 percent of their respective teams' cap hits. For Bedard, achieving a strong season next year will be crucial to solidifying his place in that salary range, which may approach or exceed $14 million, depending on his performance.

While speculation surrounds possible record cap hits, there is speculation whether McDavid could become the first NHL player to attain a $20 million cap hit. McDavid's recent contract that expires at the conclusion of the 2025-26 season boasts an AAV of $12.5 million, with his representation sitting at approximately 14 percent of the Oilers' salary cap. With future cap projections suggesting it will rise to $113.5 million, discussions surrounding McDavid’s potential next deal could range significantly. The Edmonton Oilers have demonstrated their intent to invest in McDavid, who has continually surpassed performance expectations, leading the team through the playoffs and earning accolades such as the Conn Smythe Trophy. The question looms whether McDavid would opt for the reported $20 million, given his commitment to winning and team cohesion.

The Toronto Maple Leafs stand to benefit substantially from the upcoming cap increases, particularly with upcoming negotiations for Mitch Marner, whose contract with an AAV of $10.9 million is set to expire this offseason. With Marner on pace for a career-high 108 points and showcasing considerable skill in both offensive and defensive play, the negotiation landscape for his next contract is becoming increasingly complex. The outcome of negotiations might influence the emergence of a new market for wingers, based on decisions made by other high-profile players such as Mikko Rantanen and Artemi Panarin. The potential for heightened contract demands for Marner mobilizes an intriguing discussion around the financial dynamics of player contracts in the league moving forward.