The NHL and its players' association have agreed on a formula for a salary-cap system based on team-by-team revenue, league and player sources have told The (Toronto) Globe and Mail.

The salary-cap issue was seen as the biggest hurdle in talks for a new collective bargaining agreement.

A salary floor and cap will be based on a percentage of each team's revenue, the sources said, and in the first year, based on revenue projections by both sides, the cap will range from $34 million to $36 million, with the floor from $22 million to $24 million.

Union spokesman Jonathan Weatherdon called the newspaper's report premature.

"The NHLPA and NHL discussions this week continue to cover a range of issues such as controls on team salaries, revenue sharing, Olympic participation, the amateur player draft and player-retention rights," Weatherdon said. "While the parties continue to have discussions to reach a common ground, no agreements have been reached."

The newspaper also reported that the formula calls for a dollar-for-dollar luxury tax to kick in at the halfway mark between the floor and the cap. If the floor of the lowest team is $22 million and the cap on the highest team is $36 million, then the "tax level" will be $29 million.

The dollar amounts are reflected in U.S. currency.

The formula would allow wealthier teams to spend a bit more money but also would bridge the large gaps in spending between higher-payroll teams and lower-payroll teams.

Small-group labor talks between both sides ended late Tuesday and were to resume Wednesday in New York with a larger group meeting.

Both sides have carried over the momentum from last week, when 34 hours of talks were described by both sides as "progressive."

There are several issues to iron out, but sources in both camps told the paper there is a chance a deal could be done before July. Still, both sides also concede there are potential pitfalls that could prevent an agreement from being reached.

The session Wednesday was the 21st meeting between the two sides since mid-February, when NHL commissioner Gary Bettman canceled the 2004-05 season.

Tuesday marked the one-year anniversary of the Tampa Bay Lightning winning its first Stanley Cup, with a 2-1 victory in Game 7 against the Calgary Flames.

News Wire / Rocky Mountain News