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Why dont the Habs sign better terms

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Old
07-03-2011, 09:55 PM
  #1
Le CH
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Why dont the Habs sign better terms

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.

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07-03-2011, 09:58 PM
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RE-HABS
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You see more front loaded in longer term deals over 6 years. We don't sign player to deals that long.

Price and Subban will get big deals next though.

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07-03-2011, 09:58 PM
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Cole got 6-4-4

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07-03-2011, 09:59 PM
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Quote:
Originally Posted by Le CH View Post
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.

I suppose the front loaded salaries in canada cost more to players due to taxes (the more you make, the more you pay)

It's just a supposition tho

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07-03-2011, 10:01 PM
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I think Cole is a great deal anyways. I mean, we have Gionta, 5 years 5 mill or something similar to that. Cole, similar output, 6'2, gets in dirty areas and is getting less money, even though the cap went up.

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07-03-2011, 10:01 PM
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Quote:
Originally Posted by Le CH View Post
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.
Do you really want to give Cole a a 8 year contract? Thing is the player may want to continue playing and not retire...if that's the case, you're stuck with a higher salary cap.

You don't negotiate the year a player will retire. I think the Habs are playing it safe and it's fine. You are more in control...

I'm curious to know what they'll do with Carey Price though. It will be the first time they'll have to give a contract to a core player like Price (his last contract doesn't count since he wasn't that good the year before).

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07-03-2011, 10:02 PM
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Le CH
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Originally Posted by RE-HABS View Post
You see more front loaded in longer term deals over 6 years. We don't sign player to deals that long.

Price and Subban will get big deals next though.
Erik Coles contract is $4.5M each year for four years... why not front load the first two years for something like $6M, $6M, $3M, $3M. After two years if things arent working out they could more easily find a taker on a trade.

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07-03-2011, 10:03 PM
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The Habs aren't the only team not doing this. My guess would be they fear either a reduction of the cap or a change of the rules in the next CBA that would end up screwing teams that did that.

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07-03-2011, 10:03 PM
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Le CH
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Originally Posted by chubaka View Post
Cole got 6-4-4
Really... thats not the numbers I saw.

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07-03-2011, 10:05 PM
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Originally Posted by jake the snake View Post
I suppose the front loaded salaries in canada cost more to players due to taxes (the more you make, the more you pay)

It's just a supposition tho
You would be right at much lower amounts, but as soon as you get above the last tax bracket (around 130 000$) it doesn't change. Not sure about some of the payroll taxes, but even there, shouldn't really change the amounts that much.

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07-03-2011, 10:06 PM
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Originally Posted by Beaker View Post
I think Cole is a great deal anyways. I mean, we have Gionta, 5 years 5 mill or something similar to that. Cole, similar output, 6'2, gets in dirty areas and is getting less money, even though the cap went up.
Im not saying its a bad deal its just that the terms could be more stategic for cap/trade reasons - it would be a win-win for both the team and the player.

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07-03-2011, 10:25 PM
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Quote:
Originally Posted by Le CH View Post
Erik Coles contract is $4.5M each year for four years... why not front load the first two years for something like $6M, $6M, $3M, $3M. After two years if things arent working out they could more easily find a taker on a trade.
You know his cap hit doesn't change those last 2 years. While he is getting 3 million, it still counts as 4.5 towards the cap.

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07-03-2011, 10:30 PM
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Quote:
Originally Posted by RE-HABS View Post
You see more front loaded in longer term deals over 6 years. We don't sign player to deals that long.

Price and Subban will get big deals next though.
yeah, we'll see the Canadiens management adhere to this new front loaded 6-10 years contract when Price and Subban sign.

Prediction: Price sign 40,6M$ year scattered over 7 years: 7M$, 7M$, 7M$, 6M$, 6M$, 5.1M$ and 2.5M$ (average 5,8M$ per)

Subban sign 39,5M$ year over 7 years too: 6.5M$, 6.5M$, 6.5M$, 6.5M$, 4.5M$, 4.5M$ and 4.5M$ (average 5,65M$ per)

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07-03-2011, 10:32 PM
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Originally Posted by Dirty Danglez View Post
You know his cap hit doesn't change those last 2 years. While he is getting 3 million, it still counts as 4.5 towards the cap.
i dont think alot of people understand that...
many teams will spend up to the cap, in fact most will, so the fact that he cost less than his cap doesnt actually help a whole much.
Theres really no point to these type of contracts unless its over 6 years i believe.

We have to lock PK and Price into deals like that cause they'll both deserve the big bucks but having a cap hit as high as their salary can be a problem in the future

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07-03-2011, 10:32 PM
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Originally Posted by Dirty Danglez View Post
You know his cap hit doesn't change those last 2 years. While he is getting 3 million, it still counts as 4.5 towards the cap.
I get that but teams who are struggling to reach the cap floor favour players who have a cap-hit higher than their actual salary so they become interesting assets to them. I can definitely see Gomez being traded next off-season because of this fact.

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07-03-2011, 10:41 PM
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Quote:
Originally Posted by Le CH View Post
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.
Interesting, I guess two reasons:

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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07-03-2011, 10:44 PM
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Originally Posted by Le CH View Post
Erik Coles contract is $4.5M each year for four years... why not front load the first two years for something like $6M, $6M, $3M, $3M. After two years if things arent working out they could more easily find a taker on a trade.
His cap hit would remain the same, which usually is what teams look at.

Front loading contracts becomes interesting when you sign players to 8years+ deals.
You can give big amounts early, and then get away with cheap 1-2M salary at the end of the contract, which lowers the cap hit. Take Lecavalier's deal, 10M for the first 7years, and then it gradually drops from 8.5M to 4 to 1.5 to 1, for a total cap hit of 7.7M.
Same thing with Jeff Carter. His extension kicks in next year, an 11year deal with a cap hit of 5.2M. Over the years, his salary fluctuates from 6M to 7M to 2M.

I'm not a fan of front loaded contracts.

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07-03-2011, 10:45 PM
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I figure the Habs might not like the players that they sign enough so that they keep the term shorts so they don't have to see them too long.

Seriously when you get a real sure thing you can give him 10 years, but when you're not sure what you're gonna have, better keep it short term.

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07-03-2011, 10:47 PM
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Quote:
Originally Posted by Le CH View Post
I get that but teams who are struggling to reach the cap floor favour players who have a cap-hit higher than their actual salary so they become interesting assets to them. I can definitely see Gomez being traded next off-season because of this fact.
I agree...especially with so many teams "struggling" to get to the Cap floor.

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07-03-2011, 10:48 PM
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Originally Posted by Ceux de Montreal View Post
yeah, we'll see the Canadiens management adhere to this new front loaded 6-10 years contract when Price and Subban sign.

Prediction: Price sign 40,6M$ year scattered over 7 years: 7M$, 7M$, 7M$, 6M$, 6M$, 5.1M$ and 2.5M$ (average 5,8M$ per)

Subban sign 39,5M$ year over 7 years too: 6.5M$, 6.5M$, 6.5M$, 6.5M$, 4.5M$, 4.5M$ and 4.5M$ (average 5,65M$ per)
Given they are so young, Id be surprised this would happen since Im not sure they will accept the lower salary awarded in the later years when they are in their early thirties. I think if the Canadiens are ready to commit to 10 years maybe... but I feel these contracts ( 6-9 years ) are necessary for players aged between 26-30 given the current environment.

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07-03-2011, 10:49 PM
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Originally Posted by Le CH View Post
Really... thats not the numbers I saw.
6-4-4-4? oh noes, he forgot the last year...

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07-03-2011, 10:49 PM
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I don't think people are understanding what the OP is referring to.

Gomez has a Cap hit of 7.3 million dollars for the next 3 years (almost 22 million total), but he's only owed 16 million. Teams looking to get to the salary floor without actually dishing out the cash could be interested.

Cole's cap hit and salary is 4.5 per year, but if they they had front loaded it, ie 6, 6, 3 and 3. In those last 2 years, he could become more attractive to those salary floor teams.

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07-03-2011, 10:55 PM
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Originally Posted by habsprospects View Post
6-4-4-4? oh noes, he forgot the last year...
http://www.nhlnumbers.com/teams/MTL?year=2012

I used this site... it says $4.5M each year of the contract - maybe its not the right terms.

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07-03-2011, 11:00 PM
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Originally Posted by Le CH View Post
http://www.nhlnumbers.com/teams/MTL?year=2012

I used this site... it says $4.5M each year of the contract - maybe its not the right terms.
Try capgeek.com, even NHL.com referred to them..

http://www.capgeek.com/players/display.php?id=529

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07-03-2011, 11:08 PM
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Le CH
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Originally Posted by habsprospects View Post
Theres a difference b/w cap hit and actual salary... its not the same thing. Capgeek gives you the cap-hit for the length of the contract but not actual salary break-down per year.

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