Performance bonus overages: Which teams get pinched hardest against 2023-24 salary cap?

For the past three years the NHL has been going through what's been dubbed 'the flat cap era' as the league and NHLPA have tried to navigate through the pandemic. With revenues down due to various factors such as empty buildings, to maintain a 50-50 split of hockey revenues without slashing back on player salaries, the best avenue was to restrict the upward movement of the salary cap.

Teams used to be able to plan for increasing cap limits when designing their teams and signing players. Remember, when the cap was first introduced in 2005-06, the upper limit sat at just $39 million. Ten years later, in 2015-16, the upper limit had climbed to $71.4 million, and in the four seasons after that the cap went up another $10.1 million.

Because the cap has gone up by only $1 million since 2019-20 teams have been more challenged than ever to keep rosters together, get all the contracts signed they want, and remain cap compliant. You can immediately see how the league has been pinched, too, by looking at LTIR: half of the NHL's teams finished the 2022-23 season over the $82.5 million cap limit by using the long-term injury reserve.

While we're beginning to see a light at the end of the tunnel of this era, we're not quite there yet. The cap is anticipated to rise by just another $1 million for next season, before it's expected to start climbing by multiple millions. In December, there was some expectation that the upper limit could climb to $92 million by 2025-26.

So, we'll still see the effects of the flat cap for at least another season.

One way that will be felt next season is in performance bonus overages. Basically, as explained on PuckPedia, if you are using LTIR and players on your roster hit their performance bonuses, those charges will apply to next season's cap. Likewise, if you are cap compliant without LTIR and your total player performance bonuses push you over, however much you exceed the upper limit by will also apply to next season's cap.

(i.e.: If your team's cap charge is $82 million against this year's $82.5 million upper limit, and player performances bonuses equal $1 million, you will carry an extra $500,000 cap charge into 2023-24.)

According to PuckPedia, last year 14 teams carried bonus overage cap charges into the 2022-23 season, but that will rise to 15 teams carrying overages into 2023-24, a new league record.

Here's a list of all the teams affected, and what their overage charges will be next season, via PuckPedia:

There could still be some changes to some of these final charges. The Flyers and Canadiens will be charged an additional $212,500 if Noah Cates (PHI) or Jordan Harris (MTL) are named to the all-rookie team; the Hurricanes will have a $500,000 overage added if they win the Stanley Cup, due to the bonus in Paul Stastny's contract; and the Panthers will face an additional $25,000 charge if Michael Benning plays five playoff games. Benning signed out of the University of Denver earlier this month, but hasn't played a game yet as Florida trails their first-round series 3-1.

The biggest charge on here belongs to the Bruins, who would have anticipated this as they just tried to keep the band together for one more run. Their overage charges come because they leaned on LTIR this season and gave easily attainable bonuses to Patrice Bergeron ($2 million for 10 games played) and David Krejci ($1 million for 10 games played, $500,000 for 20 games played, $500,000 for making the playoffs) on their one year deals. The two players combined for a $3.5 million cap hit on this year's books, but will take up $1 million more than that next season, even if one or both retire.

So, yes, it's great to see the salary cap climb by another $1 million next season and that should begin to help teams manage a little bit more, after the cap rose by $1 million coming into this season as well. But, as you can see, 15 teams will have at least part of that sum taken up by this years' performance bonuses. And three teams will basically not feel the benefit of the small cap increase at all, with the entire total (plus!) being claimed by these overage charges.

With help from the great PuckPedia