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Cap Re-Rates: Does this make sense?

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06-29-2009, 11:44 AM
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Anthony Mauro
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Cap Re-Rates: Does this make sense?

After just looking at some cap numbers for our team, I came across a line of thinking that would certainly alleviate some cap pressure from teams in trouble regarding front loaded contracts.

If a guy like Rozsival signs a contract for 7 million, 6 million, 4 million, and 3 million each year over 4 years, why not re-rate his cap hit every year? It would align with his real salary value and make life just a little easier for his team. IMO last year is in the books with his cap hit at 5 million. For the 2009-2010 season it should be 4.3 million. The season after that, 3.5 million. And then 3 million.

Why doesn't this make sense? I can only think of a problem being it would give GM's incentive to front load the contracts, but that's something that they already do anyways.

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06-29-2009, 12:00 PM
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GAGLine
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Actually, it would give GMs incentive to back-load contracts. If a team only had 3 mil in cap space but wanted to sign say, Gaborik, why not pay him 3, 5, 8?

It would create more problems than it solved though with those cap hits increasing each year, and those players would be very difficult to trade.

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06-29-2009, 12:05 PM
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Rags225
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I have thought about this but in a different way. I think if the cap plummets next year ie: goes down to 50 mil and alot of teams are in cap hell, the NHL and NHLPA might actually both approve just using the cap hit being the salary instead of averaging it to alleviate cap pressures as many teams front load contracts.

Heck they could even say teams are allowed to renegotiate the remainder of the contracts if and only if the length and amount of the contract does not change.

ie. Player x is owed 14 mil over the four remaining seasons of his contract at 6,4,2,2. The team and agent agree to change payments around to 3,4,4,3. or 4,5,3,2.

B/c the NHLPA wouldn't want players with bigger avg size contracts to be sent to the AHL or bolting towards Europe (if they are sent to the AHL).

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06-29-2009, 12:13 PM
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Anthony Mauro
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Quote:
Originally Posted by GAGLine View Post
Actually, it would give GMs incentive to back-load contracts. If a team only had 3 mil in cap space but wanted to sign say, Gaborik, why not pay him 3, 5, 8?

It would create more problems than it solved though with those cap hits increasing each year, and those players would be very difficult to trade.
So it would be advantageous to front and back load depending on need.

They're difficult to trade now, without this suggestion.

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06-29-2009, 12:22 PM
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Quote:
Originally Posted by Rags225 View Post
B/c the NHLPA wouldn't want players with bigger avg size contracts to be sent to the AHL or bolting towards Europe (if they are sent to the AHL).
Over the long term, it would hurt player salaries and contract lengths as well. The PA doesn't want teams to be gun-shy about paying their members in the future.

By the same token, the league doesn't want to see teams disbanded, or "upper half" talent replaced by AHL level players for monitary reasons. It's not good for the product they're selling.

Both sides must have thought about the possibilities of a massive drop in revenues at some point. I wonder if there's already a plan in place that we're not aware of.

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06-29-2009, 12:30 PM
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What I think should happen is, if the cap were to decrease, player salaries should decrease by the same percentage.

If this doesn't happen, teams will be hard pressed to keep rosters together, which would result in more players out of work because teams need to bring the salary levels down.

A system where cap decreases are echoed in actual player salaries would benefit everyone, I believe.

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06-29-2009, 12:41 PM
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I think the most likely scenario would be a buyout grace period, like they had when the cba went into effect. Teams could buyout contracts (maybe a limited number) during that period without incurring a cap hit.

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06-29-2009, 01:03 PM
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Quote:
Originally Posted by GAGLine View Post
I think the most likely scenario would be a buyout grace period, like they had when the cba went into effect. Teams could buyout contracts (maybe a limited number) during that period without incurring a cap hit.
Redden. Immediately.

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06-29-2009, 01:14 PM
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I have a hard time finding fault with anyone but the owners/GMs when it comes to the current cap mess many teams face. Until teams start showing some fiscal restraint, we'll always have ridiculous contracts that cripple teams, regardless of any adjustments to actual salaries or cap numbers.

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06-29-2009, 01:17 PM
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Originally Posted by Manhattan Blue View Post
Why doesn't this make sense?
because the total cap hit throughout the contract would be significantly less than the total dollars paid out.

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06-29-2009, 01:25 PM
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Rags225
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Originally Posted by Melrose_Jr. View Post
Over the long term, it would hurt player salaries and contract lengths as well. The PA doesn't want teams to be gun-shy about paying their members in the future.

By the same token, the league doesn't want to see teams disbanded, or "upper half" talent replaced by AHL level players for monitary reasons. It's not good for the product they're selling.

Both sides must have thought about the possibilities of a massive drop in revenues at some point. I wonder if there's already a plan in place that we're not aware of.
eh... I don't think that it would hurt player salaries. Look at football and basketball. length would probably go down but I don't think salaries. In fact they can't go down due to salaries being tied to revenues, the players get paid no matter what.

If the money is guaranteed (which they are) than teams will just plan out what years some players will get paid more or less to. If in the middle of a contract you can change the monetary amounts being paid during the years (w/ player consent of course) w/o changing the length or amount it would make it more flexible for teams to trade players, and keep teams together if they draft well by staggering big payments throughout the years so they remain under the cap.

Just look at how it could change the team this year for us. Say we want to free up cap space now. We can negotiate w/ an agent (say Gomez) and ask if he would take 2 mil less this year that we can put on year 7 on his contract. If they agree than our problem this year of cap space gets better, and in 5 years we know that we will be paying gomez 2 mil more and can plan other contracts around that. Player still gets his money, same years, but teams can stay intact and work around the cap a little.

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06-29-2009, 01:59 PM
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Originally Posted by puckhead94 View Post
Redden. Immediately.
yea that would be a saving grace

I mean poor Redden. He does'nt suck he just has a real stupid contract

if he was making even 4 million Ranger fans could live with it but that extra bit sucks hardcore

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06-29-2009, 02:19 PM
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I don't see this helping, but what I do think would help is allowing teams to give up "cap space," similar to the Capitals giving up salary + cap space without the salary. This would allow some of the teams where the cap ceiling is above their budget to create some real value with their savings.

They could acquire assets simply by giving up cap space they would not have used anyway. Similar to a player whose contract is front-loaded to be of more value to a team trying to reach the cap floor with budget constraints.

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06-29-2009, 02:38 PM
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Quote:
Originally Posted by Vitto79 View Post
yea that would be a saving grace

I mean poor Redden. He does'nt suck he just has a real stupid contract

if he was making even 4 million Ranger fans could live with it but that extra bit sucks hardcore
Extra bit?! It's 62.5% more....

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