Even Major League Baseball, which has no salary cap, uses the actualsalary attributable to a given year in determining whether a team owes under the luxury tax.
Part of the solution for the NHL in 2012 should be for owners and players to jointly define which costs will be considered legitimate expenditures, and to structure a deal that adjusts salary caps contingent on actual expenditures.
The Law Society stresses paper profits are not the same as actual earnings because equity partners in law firms are not paid a salary and the amounts quoted are often used to fund other parts of the business.
The dramatic disconnect between cap hits and salaries means that a team like Vancouver that routinely spends to the salary cap limit is actually paying out far more than that in actual salaries.