In the modern NHL, money is moving faster than ever before. Team valuations are soaring, league revenues have surpassed $6 billion, and media deals, digital platforms, and global fan engagement are adding entirely new streams of income. This rising tide is lifting everything in its path — including player salaries.
Superstars like Connor McDavid, Mitch Marner (most recently, what a bargain for Vegas, isn't it?), and Brad Marchand have already secured multi-million dollar deals under previous, more constrained cap ceilings. And now, with the NHL announcing a major leap in the salary cap over the next three seasons, those numbers are poised to skyrocket. We're not just talking incremental raises — we’re entering a new era where eight-figure annual earnings could become standard for the league’s elite.
Mitchell Marner, Vegas Golden Knights (source: TST)
The 2025–26 season marks the beginning of this new financial phase, as the cap makes a historic jump from $88 million to $95.5 million — with even sharper increases already locked in through 2028. This unprecedented growth isn’t just a headline. It has the potential to fundamentally reshape how NHL rosters are built, how contracts are negotiated, and how talent is distributed across the league. Which leads to the million (or rather: multi-million) dollar question — are $20 million-a-year players not just possible, but inevitable?
What Is a Cap Hit – And Why It’s So Crucial
A "cap hit" refers to the average annual value (AAV) of a player’s contract — and it’s the number that officially counts against a team’s salary cap each season. It’s not just a technicality: the cap hit is the single most important metric in determining how much room a team has to build its roster.
The NHL uses this system to maintain competitive balance across the league. Every team must keep its total salary commitments within a strict range — between the cap floor (the minimum spending limit) and the cap ceiling (the maximum allowed). This framework was introduced after the 2004–05 lockout, and has been central to the NHL’s economic structure ever since.
Brad Marchand, Florida Panthers (source: NHL.com)
The cap’s evolution has been significant. It started at $39 million in the 2005–06 season, and has steadily climbed to $88 million for 2024–25. That’s more than a 125% increase in under two decades — a clear reflection of the league’s financial health and long-term growth.
But the cap is more than just a number. It forces general managers to make tough decisions, strategize long-term, and weigh star power against depth. In many ways, cap hits shape the identity of every NHL team, dictating who stays, who goes, and who gets paid next.
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The Recent Cap Explosion (2025–2028)
In January 2025, the NHL and NHLPA confirmed what many had anticipated: a significant three-year increase to the salary cap, marking the most aggressive financial expansion since its inception.
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2025–26: The cap will jump from $88 million to $95.5 million
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2026–27: It’s projected to rise further to $104 million
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2027–28: The ceiling climbs again to a projected $113.5 million
In total, that’s a $25.5 million increase over three seasons — an extraordinary 29% surge, and a clear signal that the NHL is entering a new financial era.
David Pastrňík, Boston Bruins (source: SZ)
Commissioner Gary Bettman pointed to league revenues, now exceeding $6 billion, as the key driver of this growth. With pandemic-related debts fully repaid and revenue streams from media, global markets, and digital platforms expanding, the league finally has the flexibility to lift the ceiling — literally and figuratively.
For teams and players, this cap hike opens the door to creativity, aggression, and bold moves in roster construction. For stars entering contract negotiations, it could mean a once-unthinkable payday.
NHL vs. NBA and Other Major Leagues
Compared to other major North American leagues, the NHL has traditionally taken a more conservative approach to salary structures. While the NHL enforces a hard cap with strict limits on spending, other leagues offer more flexibility — and in turn, bigger contracts.
NBA vs. NHL (source: GI)
In the NBA, for instance, top players now routinely earn over $50 million per season. That’s made possible by a soft cap system that allows teams to exceed the limit through various exceptions (like the Bird Rights rule), luxury taxes, and mid-level exceptions. It’s a framework designed to reward teams for retaining talent, not to restrict them.
By contrast, the NHL’s cap system is firm: no exceptions, no luxury tax, and a hard upper ceiling for every team. One major constraint is the 20% individual player limit, meaning that no single player's cap hit can exceed 20% of the salary cap in the year the contract is signed.
Connor McDavid, Edmonton Oilers (source: HHN)
However, as the NHL’s cap is projected to reach $113.5 million by 2027–28, that 20% threshold will climb with it — potentially allowing for cap hits as high as $22.7 million. That would represent a seismic shift in the league’s salary landscape, especially considering that today’s highest-paid players are still well below that number.
In comparison, the NFL operates without a fixed maximum salary per player but does enforce a hard team cap, while Major League Baseball (MLB) has no cap at all, relying instead on a luxury tax system that many teams simply choose to pay.
If the NHL continues on its current path of revenue growth and cap escalation, the league may soon find itself in a position where eight-figure deals — once considered wild outliers — become not just acceptable, but expected.
Kirill Kaprizov, Minnesota Wild (source: MHM)
Could $15–20 Million Contracts Become the Norm?
Not only are $20 million contracts now conceivable — they’re mathematically realistic. As the salary cap rises, so too does the ceiling for individual player earnings. With the NHL’s 20% rule capping how much any one player can take from a team’s payroll, that threshold is directly tied to the league’s financial growth.
In 2025–26, the 20% max rises to $19.1 million. By 2027–28, it could hit nearly $22.7 million. That means the game’s elite — the true franchise-changers — may soon have negotiating power to command deals once thought unthinkable.
Let’s break it down with a few names:
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Connor McDavid, arguably the best player in the world, currently occupies around 15–17% of Edmonton’s cap space. If he signs a new deal when the cap hits $110 million, that same percentage could translate to an $18–19 million AAV — without him even increasing his relative cost to the team.
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Kirill Kaprizov’s current $9 million deal looks modest in a $95–100 million cap world. If he maintains a similar percentage share, his next contract could land in the $12–14 million range.
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Players like Artemi Panarin or Jack Eichel, both cornerstones of their franchises, could reasonably aim for $13–16 million AAV, depending on their timing and leverage.
Jack Eichel, Vegas Golden Knights (source: Yahoo Sports)
Even Leon Draisaitl’s new $14 million extension — massive by today’s standards — will amount to just around 15% of the 2025–26 salary cap, making it a relatively efficient number in cap-era terms.
These figures no longer feel outrageous. They reflect the market reality of a league where revenues are surging, and where the salary structure is finally catching up to the star power on the ice.
Loopholes: Cheating or Creativity?
Over the years, several NHL teams have found creative — yet technically legal — ways to circumvent the salary cap using the Long-Term Injured Reserve (LTIR) mechanism. This loophole allows teams to exceed the cap by the equivalent amount of a player's salary once they're placed on LTIR. A high-profile example is the 2020–21 Tampa Bay Lightning, who placed Nikita Kucherov and his $9.5M cap hit on LTIR for the entire regular season due to hip surgery, only to activate him right before the playoffs — where the salary cap no longer applies — while operating $18 million over the limit.
Nikita Kucherov, Tampa Bay Lightning (Athlon Sports)
Similarly, the Vegas Golden Knights faced criticism in 2023 when captain Mark Stone was placed on LTIR late in the season, giving the team room to bolster their roster via trades. Stone then returned just in time for the playoffs. These cases, along with earlier examples like Marián Hossa’s “career-ending” skin condition in Chicago, highlight how clubs can legally exploit cap rules to build stronger postseason rosters. While the league monitors LTIR usage and requires independent medical reviews, this gray area continues to spark debate about competitive fairness and the spirit of the cap system.
Fiscal Geography: Taxes, Markets & Team Balance
A $20 million cap hit might look the same on paper — but it doesn’t feel the same in every market. Thanks to dramatic differences in regional tax laws, a superstar’s actual take-home pay can vary by millions depending on where they play.
Artemi Panarin, New York Rangers (source: 1st Ohio Battery)
In Florida, Texas, and Nevada, players benefit from zero state income tax. Contrast that with California or most Canadian provinces, where combined federal and provincial rates can reach or exceed 50% for top earners. That means a player earning $20 million AAV in Toronto or Los Angeles could take home $3–5 million less per year than one playing for the Panthers or Stars.
This disparity isn’t theoretical — it’s already shaping contract negotiations, trade lists, and player preferences. As the cap expands and top-end salaries climb, these differences become even more magnified.
What does this mean for the league? Potentially, a growing imbalance. Low-tax states may become magnets for elite talent, giving teams like Florida, Tampa Bay, Dallas, and Vegas a subtle but powerful edge in attracting and retaining stars — especially under a rising cap ceiling. Without enhanced revenue sharing or other equalizing mechanisms, this “fiscal geography” could subtly distort the NHL’s competitive landscape over time.
In a league that prides itself on parity, this is a development worth watching.
Matthew Tkachuk, Florida Panthers (source: The Sporting News)
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How Will the League Landscape Shift?
The ongoing cap surge and evolving financial realities are poised to reshape the NHL’s competitive fabric in profound ways:
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More Star Concentration: With top-tier players commanding larger slices of the cap, teams may increasingly build rosters around a handful of superstars, sacrificing depth to secure elite talent.
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Rising Mid-Tier Value: Players in the $12–15 million range—think Kaprizov, Panarin, or Eichel—will become more common, potentially compressing the traditional salary tiers and forcing teams to make tougher allocation decisions.
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GM Strategy Overhaul: General managers accustomed to rewarding balanced, depth-heavy rosters might pivot toward star-focused models to stay competitive in this high-cap environment.
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Revenue Sharing & Parity: To prevent a runaway effect favoring wealthier, low-tax-market teams, the NHL may need to enhance its revenue-sharing systems and consider additional measures to maintain league parity.
Jonathan Marchessault, Nashville Predators (source: MSMT)
The Cap’s Climb & Its Consequences
Ultimately, we are entering an era of accelerated financial stratification. Teams that expertly leverage cap flexibility, tax advantages, and savvy contract structuring could rise exponentially faster than their competitors — fundamentally altering the NHL landscape for years to come.
With the salary cap firmly set through the 2027–28 season, and the NHL and NHLPA preparing for a new Collective Bargaining Agreement (CBA) slated to begin in 2025–26 and extend through 2029–30, the league enjoys a period of financial stability and predictability.
Yet, with the introduction of a playoff salary cap and stricter Long-Term Injured Reserve (LTIR) rules, it’s clear that the league aims to ensure that financial growth remains measured and sustainable. The big questions linger: Will $20 million contracts become commonplace or remain exceptional? Will low-tax markets continue to dominate the competition for elite talent? And most importantly, can the NHL maintain its hard-earned parity amid these accelerating financial shifts?
Only time will tell — but one thing is certain: the NHL is entering a new era, where money, strategy, and tax geography will play an increasingly pivotal role in shaping the game on and off the ice.
Jason Robertson, Dallas Stars (source: TDMN)
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The New Financial Era of the NHL
The NHL is undergoing a transformative financial leap:
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The salary cap is set to surge from $88 million to $113.5 million over just three seasons.
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Contracts in the $15–20 million range are evolving from rare exceptions to the new standard for elite players.
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Regional tax environments and market sizes will increasingly skew players’ negotiation leverage and team strategies.
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Without enhanced revenue-sharing or corrective measures, league balance may shift—potentially favoring teams in low-tax, high-revenue markets.
Are $20 million NHL players the new normal? Very soon, yes—and not just for stars like McDavid, Marner, or Pastrňák. The league stands at the threshold of a new hockey economy: bigger, richer, and more unequal. The coming cap cycle will reshape the NHL landscape, where money will speak louder than ever—and the business of winning may become just as critical as the game itself. 🏒
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