Why dont the Habs sign better terms
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07-03-2011, 10:41 PM
11 Stanley Cups
Join Date: Jun 2007
Originally Posted by
This has been going on for a while now but most teams pay front loaded terms when signing players so that in the later years the player has a much lower salary than his actual cap. This seems like a smart move since the player can more easily be moved later in his contract ( if the team is looking to trade obviously ) to teams trying to make the cap floor.
Also, the number of years are now often in the 7-10 years which often helps decrease the cap hit with later years having smallish salaries making the total cap hit more palatable. The player can retire later on if the contract was signed at less than 35+ without penalising the team or again they can simply trade him more easily.
The Canadiens never seem to take this strategy ( Erik Cole signing is the latest example )... not sure why they wouldnt take advantage of the loop-hole in the CBA given other teams are using it to their advantage especially since they are one of the strongest financially.
1) For select contracts it may be a good strategy, however if all contracts were approached in a front loaded fashion it would escalate the real dollars paid by the team which would definitely cut into the bottom line financially. Profits, profits, profits.
2) In high taxation districts I doubt there is a strong push from the player for frontloading. There is a chance that down the road the player may be traded and given that there is no jurisdiction in the NHL with a higher marginal/nominal taxation rate than QC, that trade would represent paying less tax on the total income . Saving larger payment numbers for later in the contract can actually lead to the player getting more income if he's ever traded. A player may be keen on getting as much up front in a jurisdiction like Texas or Florida but I doubt it's in play in Montreal.
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