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Last Week in Hockey: August 8

Oilers signings, payroll deficits & other notes from around the league

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Ottawa Senators v Edmonton Oilers Photo by Andy Devlin/NHLI via Getty Images

Edmonton Oilers news of the week recap:

  • Darnell Nurse signs mammoth extension with Oilers

It’s probably too much, but the Oilers were in a tough spot with this one. The deals to Jones, Hamilton, Werenski, etc., set a crazy market for top pairing defensemen. Doesn’t help that Adam Pelech’s AAV was 4 million less half a day later though.

  • Stuart Skinner re-ups with Edmonton on two year, two way deal

Pretty low risk signing. Was a top goalie in the AHL last year and could be on the roster in 2022-23.

  • Brendan Perlini signs for one year to battle for fourth line spot

Sorry, who? Can’t imagine he beats out Dave Tippett’s GUY, Devin Shore.

Is this optimistic?

Not sure how our worst defence in a decade factors into that model, but maybe it figures we’ll win A LOT of games 5-4.

Notes from around the NHL:

  • Pelech, NYI agree on 8 year x $5.75M AAV deal
  • Dunn inks two-year, $8M deal with Kraken
  • Seattle Kraken sign C Johansson to one-year deal

Stan Bowman in hot water

In the ongoing saga for the Chicago Blackhawks organization and the sexual assault allegations leveed against them, Rick Westhead reported that another layer of concern is added for the leader of hockey operations. A lawyer for a former Chicago Blackhawks player has asked the U.S. Center for SafeSport to investigate Blackhawks and U.S. Olympic men’s hockey team general manager Stan Bowman for allegedly covering up the sexual abuse of two former Blackhawks players.

Many are looking for the Blackhawks GM to take a leave of absence during this period of turmoil and to take the appropriate time to assist the investigation. I have no intention of declaring anyone’s guilt, but the testimonies and facts provided thus far do not paint a pretty picture for Stan Bowman, Marc Bergevin, et al.

Player payroll deficit hits $1 billion, salary cap increases unlikely

A full NHL season with fans in the stands is increasing the NHL board’s hopes of a financial boost next year. A big issue, reported on by Sean Shapiro for the Athletic, is the lack of season ticket sales.

According to Sean, despite a new national TV deal in the U.S. and increased sponsorship opportunities thanks to the widespread legalization of sports gambling, the NHL remains heavily dependent on the box office, which is why ticket sales — particularly of season packages — are a focus heading into 2021-22.

Executives of several teams interviewed by The Athletic said they have seen a dip in sales of full-season packages. While the overall appetite for tickets hasn’t dropped dramatically, they said, the types of packages in demand have changed. Multiple teams have had a higher percentage of partial season-ticket plans sold — 10- or 20-game packages for example — as opposed to full-season tickets.

By not having anywhere close to the regular number of fans in the stands while playing a partial schedule, the league missed out on more than $3.5 billion in revenue in 2020-21. It’s a reality that has led to many teams cutting staff. It’s also having an effect on the ice as roster construction has been affected by a flat salary cap. And if revenues don’t make a dramatic improvement, the cap might not rise substantially for four or five seasons.

The players owe the league approximately $1 billion. Until that is paid back, the cap can only rise by $1 million per year. Even that modest increase can only happen if hockey-related revenue for the prior season surpasses $4.8 billion per the agreement the league and players signed in the summer of 2020.

For a quick CBA refresher: Players and owners have agreed to a 50-50 split of hockey-related revenue (HRR). Since player contracts are signed before HRR is determined, a portion of player contracts is held in escrow. At season’s end, portions of this money are returned to owners and players depending on the final HRR tally to satisfy the 50-50 ratio.

The financial effects of the pandemic, however, created a considerably deeper deficit than the players have faced in the past. As a result, escrow, which has typically been set at around 11 percent, was collected at 20 percent during the 2020-21 season (thus, a $1 million contract was actually worth $800,000).

For the coming season, the escrow rate will be between 14 and 18 percent depending on the final HRR total for 2020-21, which is still to be finalized.