How the CBA Affects the Oilers

With the NHL about to sit down and hammer out a new Collective Bargaining Agreement, the Oilers and twenty-nine other teams are waiting eagerly to not only see if there will be any kind of work stoppage, but once things get sorted and an agreement reached, how it will affect the NHL salary cap.

There aren't too many situations where Edmonton is at an advantage when it comes to NHL salaries. For example, Edmonton is known as a less that desireable destination among players. That may change if and when the Oilers become a consistent contender, however for now, Edmonton ranks low on players' "wish list" for trades and new contracts.

So too, Alberta in general is a highly taxed region. While others cities like Vancouver are higher (hopefully this helps with Justin Schultz), locations like Florida who have no tax and Nashville who have little, have a distinct advantage when a player takes the time to look at his take home pay and make a decision. It's a reason the KHL has been an option for many -- low tax always benefits those who make a lot of money. When you have to give away 30-45% of your income, a $5 million per year salary that turns into $3 million understandably scares some away.

So with all these disadvantages, why could the Oilers benefit from whatever comes of the CBA talks? Because their players -- the ones who will make a boat load of money, will all be negotiating contracts under the new guidelines of the salary cap.

As Jonathan Willis pointed out in a recent piece he did, he recognized that typically a star player in the NHL makes between 8%-11% of the teams overall cap. There are of course always deviances from that rule, but for the most part, when one looks around the league, you see this as very accurate.

If that trend stays true, when the salary cap goes down $10 million per season - or whatever number it ends up being dropped - the average number for players like Taylor Hall, Jordan Eberle, Ryan Nugent-Hopkins and if they draft Nail Yakupov, should drop in line with the new cap.

Meaning, salaries like that of Eric Staal, Anze Kopitar or Rick Nash, whom when they signed their deals were recognized as the teams true franchise player, should be a thing of the past. For a team like Edmonton who has a history or perhaps is required to overpay, this is great news. The new salary cap in some way, will take care of a large part of the negotiating for all of Edmonton's franchise guys.

Because Edmonton will have three or four big contracts to take care of, this is especially critical because their next step will be signing players of value who outperform their contract numbers. That can be tough to do if you're a team that has signed big name guys just a couple years shy of the cap dramatically dropping.

The Other Side of the Coin

There is however another side of this coin. A way that my theory is shot down and the Oilers could be in real trouble.

What could be a big advantage could be quickly wiped clean by the negotiated percentage drop that each player who currently has a contract will be asked to take under the new CBA. Often when the overall cap goes down, players will be asked to reduce their individual and existing current salaries.

If for example a 10% reduction in total team cap translates into a 10% drop for the players, all things remain even. If however a total team cap is 10% and the individual player cap moves down only 5%, the Oilers could have a problem.

This would mean that the Oilers who will have to pay fair or better wage for their stars, will have to use current contracts as a gauge or guideline, but those contracts will be priced higher than the 10%average team rate that exists now. It could mean that the Oilers big four could make 45% or more of the team total.

If the Oilers are paying $22-$23 million to four guys and the team cap is say $52-$55 million, Edmonton could have a tougher time landing those ever so important value contracts. And value contracts are critical to being a contender when your team is finally ready to make that push.

Obviously every team will be affected by the new CBA. The Oilers may come out ahead, or way behind. If all things remain the same and team cap and player cap goes down comparitively, that should be considered a good day for Edmonton fans.