Luongo Talk: The Final Countdown...?
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01-08-2013, 04:35 AM
Join Date: Jan 2006
From the LeBrun article, and this is HUGE:
In the original formula, if a player like Roberto Luongo was traded and retired before the end of his deal, the Canucks (the team who signed him to the contract) would assume his remaining $5.33-million cap early hit in retirement. The new rule in this tentative agreement is different. Now, for any contract in excess of six years,
both teams involved in a trade on a contract like Luongo’s would be penalized if he retired before the end of his deal.
let’s say the Canucks trade Luongo soon. Luongo has played two years of his 12-year contract, the Canucks paying him $16.716 million in salary but only absorbing a $5.33 million cap hit each year. That’s a cap savings of $6.056 million over two years so far for Vancouver.
Under this new rule, should the Canucks trade him now and he retires with three years left on his contract, Vancouver would be charged that $6.056 million in cap savings over the final three years left on his deal from 2019 to 2022.
However, let’s say for argument’s sake Luongo gets traded to Toronto, the Maple Leafs also would be subject to cap penalties if Luongo retires before the end of his deal.
If Luongo were to play the next seven years of his deal in Toronto before retiring, the Leafs would be paying him $43.666 million in salary but only counting $37.31 million against the cap over those seven years, a cap savings of $6.356 million.
So if Luongo retires with three years left on his deal (because his salary falls to $1.618 million in the 10th year and then $1 million in the last two years of the deal), the Leafs would get charged that $6.356 million on their cap spread evenly over the remaining three years of his deal.
And obviously, if players under these back-diving deals are never traded, but retire before the end of their deals (Marian Hossa in Chicago),
their current teams get charged the cap savings spread evenly over the remaining years of the deal.
There you have it, finally explained what happens to all these retirement contracts that were signed under the old CBA. Basically, any money a team has saved in the first years of the deal will come back to your cap once the player retires.
For example, we can assume that both Suter and Parise will retire after their year 10, when their salary drops to 2 million and then 1 million from 6 million. They have made 94 million in the first 10 years while in the cap the number has been at 75.4 million. That's a 18.6 million difference per player, and that amount times 2 will be added to the Wild salary cap for the last 3 years of their deals (this is assuming they retire after that year 10). Per year that is 18.6/3 = 6.2 million per player, meaning that for the seasons 22-23, 23-24 and 24-25, the Wild have 12.4 million of their salary cap used to Parise and Suter who have already retired.
For Detroit, if Zetterberg retires when his salary drops from 7 million to 3.35 million, similarly before the last 3 years of his contract, they would be on the hook for about 13.5 million (4.5 million cap hit per year) for those 3 years. If Franzen retires 3 years before his deal ends, the Red Wings would be on hook for ~2.6 million cap hit per year for the next 3 years. If he retired 4 years before his deal ended, the cap hit number would be at 2 million for the last 4 years. Kronwall's deal pays him 1.75 million in the last year and if we assume he doesn't play that year, Detroit will still have a cap hit of ~4 million for Kronwall for that year. If he played that year, the cap hit would be normal 4.75 that it is now. With Detroit, all these years overlap too, so they could be majorly screwed aswell, just not as much as Minnesota.
Philly is otherwise fine but Bryzgalov's contract is pretty bad. His salary drops for the last 2 years in the deal and if we assume he doesn't play those last 2 years, the Flyers would still have a cap hit of ~4.1 million in those last 2 years.
With Luongo, the Canucks are in similar place with Philly. If Luongo played his whole contract with the Canucks and retired when his salary drops to 3.4 million, the Canucks would have a cap hit of ~3.5 million for the next 4 years (from 18-19 to 21-22). If he played that year and retired after, when his salary drops to 1.6 million, the Canucks would have a cap hit of ~4 million for the next 3 years (from 19-20 to 21-22).
If Gillis can't trade Luongo this season, an additional ~1.4mil will be added to the current 6 million that the Canucks are on the hook for after Luongo retires. Not a huge deal, but still something.
Last edited by georgevanlynn: 01-08-2013 at
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