The most informative posts today, as usual in the hockey world, came from insiders Pierre Lebrun, Elliotte Friedman and Bob McKenzie. Another frequently mentioned name on that list, Craig Custance, also wrote an excellent post, but his contained one detail in particular that would change the dynamic of how hockey teams operate.

We’ll start with that detail, and get to a few other interesting tidbits farther down.

From Custance (paywall):

The league’s proposal includes a clause that says all years of existing contracts longer than five years will be charged against the cap regardless of whether or not a player is still playing. If that player is traded, the new team takes on his cap hit, but if he retires, the cap hit reverts back to the team with which he originally signed. That means teams like Chicago, Detroit, New Jersey, Philadelphia, Vancouver and others who signed players to ultralong deals won’t be able to shake them off the books even if the player is retired or traded.

For example, if Roberto Luongo is traded to Florida in two weeks, his $5.3 million cap hit travels with him to the Panthers. But that’s a deal that extends until 2021-22, so let’s say Luongo plays five more seasons and retires at the age of 38 — a very reasonable long-term plan for the goalie. The Canucks are still hit with a salary cap charge for four more years.

How about that little nugget?

That means that if you’re the Philadelphia Flyers, and Jeff Carter and Mike Richards decide in seven years to (presumably) buy a cottage together somewhere and call their careers good, the Flyers – not the Kings – would have the remaining years of their deals added to their salary cap because they signed them.

Of course, most of these long-term deals (where retirement before completion is a risk) dip steeply at the end so it may not hurt that bad, but still: if you’re a salary cap team, and suddenly a guy your team (maybe a different GM) signed to a long-term deal a decade ago retires, you suddenly have to make room for that cap hit. As Custance notes, in the case of Zach Parise, if he chooses to call it good at 38 after banking beacoup bucks, the Wild would be on the hook for three years at $7.5M regardless of if he’s still on their team or he retires from somewhere else.

I don’t particularly care for that. Part of being a good GM is managing your cap, so if you’re suddenly saddled with numbers you hadn’t planned on, you’re in an awfully tough spot. I suppose in a number of years Luongo’s measly million dollar seasons aren’t going to kill anyone. But a guy like Parise certainly has the power to do that.

(UPDATE: After a further review, I’d agree with @67Sound, who mentioned: “As I understand it, VAN wouldn’t be stuck with Luongo’s measly salary if he retires; it would be his sizable cap hit.”)

***

Damien Cox today shared this detail from the proposal:

The owners’ proposal includes a clause that would allow teams to trade cap space — for players, not picks — and retain salary in trades.

Each would have a limit of $3 million. So a money-crunched club could trade up to $3 million of cap space to add to their rosters. The Leafs, in theory, could trade Phil Kessel to L.A. or Florida, and as part of the deal pay up to $3 million of his salary.

Brushing aside the Kessel example – an odd choice – there’s certainly advantages here for a couple groups. One, a team like Montreal Canadiens who would be able to say “Look, we’ll pay $3M of Scott Gomez’s salary if you take him,” which would free up $4.357M in cap space for them (Gomez earns roughly $7.357M annually) that could be better used. Gomez, at that number, suddenly isn’t viewed as the most useless human – value to dollar – in the NHL. Maybe you package him with someone else to get a team to do it.

Also, a team like the Chicago Blackhawks (after they won the Cup in 2010) could trade a third or fourth liner (or a couple of them) for three million extra cap dollars, which may have allowed them to retain more of their top-end talent after they won the Cup.

This could get fun. Lot of wheeling and dealing to be done with some extra wiggle room. And hey, if you’re the Islanders or Coyotes, hells yes we’ll give you unused cap room for a player.

***

More from Custance, emphasis mine:

The payroll range is interesting. With the assumption that HRR remains flat, that puts the floor at $43.9 million, the midpoint at $51.9 million and the ceiling at $59.9 million (though again, the transition ceiling will be at $70.2 million). So that means a few of these teams that we thought might have to scramble to get to the salary cap floor are actually in good shape. Both the Islanders and Coyotes are over $50 million right now in payroll. Where it gets interesting is next season. We don’t know what revenues would be, but the transition rule disappears and that means teams will have to work off a salary cap in the low 60s.

In an earlier paragraph, Custance mentions that teams would be allowed a season at the current salary cap of $70.2M. That means the Canucks don’t have to rush to trade Luongo, the Flyers don’t have to hack salary, and so on and so forth, given that the proposed season would start in like, two weeks.

But as he mentions above, the cap would take a significant cut after that.

All in all, lots of interesting tidbits in the new proposal. I’ll do my best to keep you abreast of what the NHL wants to keep, and what it wants to cut.

Comments (19)

  1. I don’t see how decreasing the cap by, say, $10 mil could not be accompanied by a rollback. The players on pre-lockout contracts would simply be too expensive. For example, Kovalchuk’s contract goes to being 10% of the Devil’s total salary cap. Talk about bruising for the Devils.

    And I get it. Lou worked around the salary cap/CBA on that deal. A lot of teams followed suit. But to make Kovy’s contract that burdensome? A bit harsh.

    • The retirement provision is Bettman throwing a GIANT “fuck you” to Lou and Snider. Which is odd, as they’re two of his closest allies.

      The $10 million deduction in the salary cap would be a de facto rollback – free agent spending would either be depressed or redistributed to teams with cap space. You could probably make the thing work, although things like AHL salaries now counting would screw the entire thing up.

      Basically, this would be a crazy year for player movement. I’m all for it.

      (especally as… yup, the Kings are at $54 million in cap space for 2013-14 thanks to Scuderi, Penner and Gagne’s contracts expiring. BRING ON A LOWER CAP~!).

      • I would disagree with Lou being one of Bettman’s “closest allies”… You’ll remember, the Devils are the only team to have been singled out for “cap circumvention” under the last CBA, for Kovalchuk’s first contract. There have been many deals similar to Kovalchuk’s over the past couple years, yet the NHL did not object to any of them…

        Yeah yeah, I’m the typical “chip on our shoulder” Devils’ fan, but my point is that Gary does not have a history of being easy on Lou and the Devils, and I wouldn’t call Lou and Gary allies at all, really.

        • Lou practically wrote the last CBA. That was a big part of the reason Bettman chose him to go after – it was a public sign that he was willing to take on ANYONE over the issue.

          And let’s face it – Kovy’s contract was that much more ludicrous than even the Luongo deal.

          • He was willing to take on anyone, but only took on 1 team? Meanwhile, the practice of front loading contracts continued, maybe only slightly less blatantly?

            I wont argue that Kovy’s deal wasn’t ludicrous – it was. But I’m just sayin’ that if Gary and Lou were buddy buddy, Gary wouldn’t have picked on that one contract.

  2. Think this offer has Burke’s finger prints all over it?

  3. It’s interesting that the owners would screw their own GMs like this. It feels like the hockey operations people will get the raw deal of whatever endpoint we reach. These provisions should create a downward pressure on salaries as those free spending teams will have to account for all those extra figures. Seems weird to make the game harder for themselves and the GMs

  4. I hate hate hate the first nugget, where a team takes the hit if a guy they signed and then traded retires. (Yes, I’m a Flyers fan, but that honestly has no real bearing here.)

    If a GM was willing to trade to take their salaries – even using Richards and Carter as examples – they should be the ones to reap the benefits (hey, they won the damn Cup!) as well as the pitfalls of those deals.

    I wouldn’t mind that salary being stuck on the receiving teams’ cap if they retire early (just like Pronger’s would be against the Flyers cap if he were to retire today instead of staying on LTIR), but to handicap a team years down the line is insane.

    And speaking as a Flyers fan, reducing the cap $10 from one season to another is also insane. I would much, much prefer a hard cap and a luxury tax for teams going over (mostly because we all know Ed Snider would pay it), which would then benefit the teams that need the money. Seems like a really easy way to earn money to me – the Flyers would pay, I bet the Rangers would pay, as well as a few other profitable franchises.

  5. I would probably be in favor of the first part about the original team taking the cap hit if current contracts are grandfathered in. It would hopefully discourage owners/GMs from signing the long term deals

  6. As an Islander fan this makes me giddy. If it’s in the final deal it will hurt at least 3 of the other Atlantic teams and the cap swap portion will benefit the Isles. Even though the team has DiPietro on the books forever the cap hit is relatively small and the team has more than enough room at least until 2015.

    • If anything, the Isles shouldn’t be punished for the DiPietro deal since it isn’t a cap circumventing contract – it was signed BEFORE the cap!

  7. “Of course, most of these long-term deals (where retirement before completion is a risk) dip steeply at the end so it may not hurt that bad, ”

    From my read of the quote (not going to pay for it), the cap HIT would transfer back, not the actual salary.

    That’s a little onerous. I can see the compromise being that the actual contracted dollars be transferred back. That seems like a fair and equitable solution for this system, and would still make Burke et al. happy.

    (of course, it would screw teams who signed players to equal deals, like the Kings with Doughty and the Pens with Crosby).

  8. “I suppose in a number of years Luongo’s measly million dollar seasons aren’t going to kill anyone. But a guy like Parise certainly has the power to do that.”

    I think you’re confusing salary with cap hit. Under the proposal, Parise is carrying a 7.5 cap hit for the next 13 years no matter where he plays/doesn’t play and no matter what he is paid each of those years. Under the proposal, Luongo is carrying a 5.3 cap hit for the next 10 years no matter where he plays/doesn’t play and no matter what he is paid each of those years.

  9. As some of the previous commenters said, I don’t understand why the owners would WANT this in their proposal. The only thing it arguably does is have a bizarro “Robin Hood” effect on Cap cheaters, but wouldn’t it have punitive effects across the board. If Crosby retires due to concussions with 6 years left on his deal, the Penguins have an effective salary cap $8.7 million less than everyone else? Who does that benefit?

    I think the “cap trading” idea is better, but you’d have to limit it pretty aggressively to prevent teams like Nashville and the Islanders becoming “banks” for competitive teams simply because they can’t afford to spend more than the cap floor. Also, I don’t want those teams to be able to spend UNDER the cap floor by using other teams cap hits as “salary”.

  10. I’m not a big fan of this either. Why saddle a future GM with the mistakes of a previous GM? Why make a team pay for poor contract choices made 10 years previously? That doesn’t seem fair.

    I get that these GM’s screwed up and abused the system. However, the NHL created the system within which these GM’s were able to make these monster deals. The offending teams were operating (barely) within the rules of the system.

    On another note, I’d love to see a luxury tax introduced (helps the struggling teams, rich teams have something to throw their $ at), but that would have a negative effect on parity…it’s probably a non-starter for now.

  11. The salary cap space trading clause should be called the Gomez Clause. If I read this correctly, the habs eating 3 millions on his AAV means the receiving team would get Gomez for a 4.3 million cap hit for 2 years with the habs eating the prorated share of his real salary, that is 2.25 million in 12-13 and 1,875 in 13-14. So the other team gets him for 3.25+2.6 millions in real money.

    A team with cap to spare could get a nice top-9 center that way.

  12. congrats on the win KINGS and thanks for putting a great series new jersey DEVILS

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