The NHL season might not start on time because of a potential labor dispute, but before the league and the players’ association even sat down Friday for their first bargaining session of the summer, they confirmed the salary cap for 2012-13.
The cap, which is tied to the NHL’s projected total of $3.2 billion in revenue from the 2011-12 season, has been temporarily set at $70.2 million. Since the installation of the cap system following the 2004-05 lockout, that figure has jumped $31.2 million.
Tom Stillman has been owner of the Blues for less than two months, but he acknowledges that the astronomical increase creates issues for his club, which under previous ownership had the eighth-lowest payroll in the league ($54.9 million) last season.
"As the cap keeps going up, it makes it more difficult for a mid-market team to be competitive —that’s kind of stating the obvious," Stillman said. "You have the revenues of a minority of the markets — the larger markets that are pulling that up because their revenue bases are so large — and yet we’re all subject to that same structure. It just makes it harder for a mid-market team to compete with the Torontos and the Montreals and the Philadelphias.
"I don’t see us being a cap team any time soon, but we definitely can compete — if I thought we couldn’t put a contending team on the ice, I wouldn’t have done this."
But Sunday, the first day of NHL free agency, will bring the single strongest reminder of the separation between the large markets and the rest of the league. It’s an already thin field of blockbuster free agents this year, but if New Jersey forward Zach Parise and Nashville defenseman Ryan Suter reach unrestricted free-agent status Sunday as expected, one can see several deep-pocket franchises being among the first in line to make a face-to-face pitch for their services.
Though the Blues have prioritized a top-four defenseman as their No. 1 need and are nearly $28 million under the cap, Stillman’s belief that the team already possesses a productive roster and his goal of making the mid-market organization financially sound will curb enthusiasm for making a free-agent splash.
"It’s a team that last year put up 109 points, the second-most points in the National Hockey League," Stillman said. "It’s a team that through the season and the playoffs learned a great deal about what it takes to be a better team. I think everybody likes our position. It doesn’t mean we might not do a little ‘this or that,’ but we’ve got a strong proposition there."
Stillman said that his purchase of the Blues from previous chairman Dave Checketts allowed the new ownership group to lower the debt load "substantially." The estimated purchase price was $132 million. But the group must overcome moves made by previous ownership, including a deal with its concession caterer, Levy Restaurants. Under Checketts’ regime, ownership received the bulk of the money from its long-term deal with Levy up front.
"The (decreasing of the debt) was the initial step," Stillman said. "The next two broad challenges are No. 1, to increase our revenue in a number of ways, and No. 2, to get control of our operating expenses. That means running the business in a more efficient, smarter way. We are working hard on doing those things. And the primary reason for doing those things is to make the franchise a much healthier financial position so that we can support a very competitive team.
"That is the aim. The aim isn’t to do all of those things so that we can start taking money out. Nobody is lining up for dividends. We’re trying to make this franchise strong and stable, so that it will be successful here in St. Louis for years to come."
Whereas some might view Stillman’s arrival as a potential infusion of new resources, others recognize his presence as stabilizing the current product, something that was nonexistent just months ago when the NHL had control of the Blues’ finances.
As Stillman said: "I think there is a feeling that ‘OK, that period of uncertainty is behind us. We have a strong 100 percent local ownership group. They’re behind us all the way. And our future is in front of us."
And it’s the team’s future on the ice especially that has the new ownership cognizant of what it spends now.
Restricted free agents T.J. Oshie and David Perron are due contract extensions this summer, and next offseason Alex Pietrangelo, Kevin Shattenkirk, Patrik Berglund and Chris Stewart will need new deals.
"That is one of the key reasons that we need to do the things on the business side that I described, so that we can keep that core together," Stillman said. "That is a very big priority. They’re strong players and they’re getting older, so they’re going to come into unrestricted free agency at some point. So, we need to be in a position to keep them.
"My responsibility is to the franchise and its health today and its stability long-term. I have to make decisions based on that. That shouldn’t be read to mean that we’re not doing anything because we’ve got to be safe. Part of those considerations are ‘What do we have to do to put a competitive, contending team on the ice?’ But I believe we have provided a budget level to the hockey guys that enables them to put a competitive, contending team on the ice. At the same time, as (Blues GM Doug Armstrong) always says, we’re always looking for ways to improve our team and we will continue to do that. But we are in a good position."