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Question regarding "Poison Pill" RFA loopholes

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Old
07-05-2012, 04:52 PM
  #1
CloneHakanPlease*
 
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Question regarding "Poison Pill" RFA loopholes

For those unfamiliar with the concept, a Poison Pill loophole in sports is basically when a team intentionally sends an offer to a RFA of another team with a loophole that makes the team who own's said player's rights unable to match.

A THEORETICAL example of this would be for the Detroit Red Wings to offer Shea Weber a 6 year 50 million dollar contract as an RFA, but with an additional bonus of 100k everytime he plays in the state of Tennesee. This would roughly accumulate to 300k extra of cap space a year in bonus's for the Red Wings, but if Weber signs the deal, the Preds would have the option to match it as it, meaning they would add an additional 4.1 milion in salary a year in bonuses, should Weber have signed that hypothetical deal and played all 41 regular season games.


Obviously that is just hypothetical, but can someone explain to me whether or not this idea would actually be legal in principal?


Edit: Put it in this forum as it deals with Free Agency. Will understand if you want it moved to another section. Also, I now realize that this would most probably put Weber over the max player salary limit. Ignore this, since I just used made up numbers. I'm talking about the idea, not the exact situation.

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07-05-2012, 04:53 PM
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Don't believe Weber would be eligible for such a bonus.

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07-05-2012, 04:55 PM
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I do not know the legality of it, but I'm sure the NHL would shoot this down in a heartbeat.

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07-05-2012, 04:55 PM
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Quote:
Originally Posted by Calle62 View Post
Don't believe Weber would be eligible for such a bonus.
Is it something with the amount, or the location specific bonus. Just curious cause that is what would allow for it to work. A few of these have been pulled off in the NFL. Assume it wouldn't make him go over the single player max salary limit if that is the problem.

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07-05-2012, 04:57 PM
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The current CBA doesnt allow for any performance based bonuses like you are suggesting here except for a few specific ones for entry level contracts or players over 35 on a one year contract.

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07-05-2012, 04:57 PM
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No, the only bonuses permitted under the CBA are the general ELC bonuses, contracts for players over 35 and players returning from long term injury.

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07-05-2012, 04:57 PM
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The only performance bonuses available under this CBA are for much older players. RFA's aren't eligible for them.


Last edited by _Del_: 07-05-2012 at 04:59 PM. Reason: Well, and ELC's, but the same principle would apply. Not RFA's.
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07-05-2012, 04:58 PM
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Quote:
Originally Posted by CloneHakanPlease View Post
Is it something with the amount, or the location specific bonus. Just curious cause that is what would allow for it to work. A few of these have been pulled off in the NFL. Assume it wouldn't make him go over the single player max salary limit if that is the problem.
Only specific bonuses are allowed on NHL player contracts and they are all enumerated in the CBA.

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07-05-2012, 04:58 PM
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Originally Posted by Halibut View Post
The current CBA doesnt allow for any performance based bonuses like you are suggesting here except for a few specific ones for entry level contracts or players over 35 on a one year contract.
Alright. What about signing bonuses? What if a big market team offered Shea Weber the same 6 year 50 million contract, but with 40 million paid of it upfront. If Nashville matched, would they have to match it word for word and pay the 40 million up front?

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07-05-2012, 05:01 PM
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the poison pill in an NHL sense would be frontloading a contract so much that small-market teams find it prohibitively expensive.

so in weber's case, something like a 5 year deal, but 14M for each of the first two years (with most of that in signing bonuses).

in the cap world, it is going to be far less effective than it was before (for example the federov offersheet, where he had 28M in bonuses for the first year if the team he signed with made the conference finals)

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07-05-2012, 05:03 PM
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Quote:
Originally Posted by CloneHakanPlease View Post
Alright. What about signing bonuses? What if a big market team offered Shea Weber the same 6 year 50 million contract, but with 40 million paid of it upfront. If Nashville matched, would they have to match it word for word and pay the 40 million up front?
total salary + bonuses in a given year cannot exceed 20% of the cap, so in weber's case 14M. Max frontload would be 28M over the first two years, which is steep, but not enough so to prevent a match.

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07-05-2012, 05:04 PM
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You can have a signing bonus and a performance bonus. I do not believe you can have a bonus for playing in a specific location. As far as I understand they just have to match the salary portion. They would just alter the pf bonus.


It would be something like this though,

Redwings:
75 million for 10 years.
100k everytime you play in Tenn. = 2 game x 100k = 200k in PF bonus.
Cap hit = 7.7mil per

Nashiville:
75 Million for 10 years
100k for every 41 regular season games played = 2x 100k potental = 200k in pf bonus.
Cap hit = 7.7mil per

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07-05-2012, 05:05 PM
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Quote:
Originally Posted by CloneHakanPlease View Post
Alright. What about signing bonuses? What if a big market team offered Shea Weber the same 6 year 50 million contract, but with 40 million paid of it upfront. If Nashville matched, would they have to match it word for word and pay the 40 million up front?
CBA has rules on signing bonuses.....

The NHL has rooted it out pretty well all of these 'poison puils' over the years... a few key incidents in the 90s caused them to focus on it (Federov for example with Carolina....i believe Sakic was also offered a poison pill contract by someone)

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07-05-2012, 05:10 PM
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Quote:
Originally Posted by T_Cage View Post
CBA has rules on signing bonuses.....

The NHL has rooted it out pretty well all of these 'poison puils' over the years... a few key incidents in the 90s caused them to focus on it (Federov for example with Carolina....i believe Sakic was also offered a poison pill contract by someone)
Per CBA:

"For the purposes of this Article, the Principal Terms of an Offer Sheet are limited to the term, Paragraph 1 Salary and Signing Bonus and Reporting Bonus the New
Club offers to the Restricted Free Agent (currently and/or as Deferred Compensation in specified installments on specified dates) in consideration for his services as a hockey Player under the SPC."

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07-05-2012, 05:19 PM
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A poison pill to Nashville is the 1 year contract.

If they match, they keep him for one year, he hits UFA and leaves. Because they matched an offer sheet they cannot get anything for him.

Theyre only other option is to take the picks, which would likely be late 1sts and not equal to his true value.

In other words a smart GM that didnt intend to do buisness with nashville in the future (division rivals AKA Detriot) would be smart to do this.

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07-05-2012, 05:27 PM
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Quote:
Originally Posted by CloweForbidzYou View Post
A poison pill to Nashville is the 1 year contract.

If they match, they keep him for one year, he hits UFA and leaves. Because they matched an offer sheet they cannot get anything for him.

Theyre only other option is to take the picks, which would likely be late 1sts and not equal to his true value.

In other words a smart GM that didnt intend to do buisness with nashville in the future (division rivals AKA Detriot) would be smart to do this.
It's also poison to Weber so no way he signs it. Stuck on a sad sack Nashville team for a full season when he's shown he wants out and he cant be traded. He'll be booed every night. He'd be better off just signing the qualifying offer and at least leave Nashville the opportunity to trade him during the season.

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07-05-2012, 05:31 PM
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Quote:
Originally Posted by smsgtkvv View Post
Per CBA:

"For the purposes of this Article, the Principal Terms of an Offer Sheet are limited to the term, Paragraph 1 Salary and Signing Bonus and Reporting Bonus the New
Club offers to the Restricted Free Agent (currently and/or as Deferred Compensation in specified installments on specified dates) in consideration for his services as a hockey Player under the SPC."
Not saying they are not allowed, just that the CBA has rules in it to prevent what the poster was suggesting (and that limit signing bonuses in general, at least to the point they arent 'poison pill' worthy).

example being the Max per-year salary rule salary(signing bonuses counts towards salary, so you can't give someone a $40M bonus)

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07-05-2012, 05:31 PM
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Originally Posted by Halibut View Post
It's also poison to Weber so no way he signs it. Stuck on a sad sack Nashville team for a full season when he's shown he wants out and he cant be traded. He'll be booed every night. He'd be better off just signing the qualifying offer and at least leave Nashville the opportunity to trade him during the season.
Thanks for the kind words

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07-05-2012, 05:31 PM
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Quote:
Originally Posted by Halibut View Post
It's also poison to Weber so no way he signs it. Stuck on a sad sack Nashville team for a full season when he's shown he wants out and he cant be traded. He'll be booed every night. He'd be better off just signing the qualifying offer and at least leave Nashville the opportunity to trade him during the season.
It's only 1 year, and seeing how Poile shows no intention of shopping Weber, what does he have to lose by signing it? Either way he'll have to spend the year in Nashville, but there's a chance Poile might just let him go for 4 1sts or whatever.

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07-05-2012, 05:33 PM
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Quote:
Originally Posted by CloweForbidzYou View Post
A poison pill to Nashville is the 1 year contract.

If they match, they keep him for one year, he hits UFA and leaves. Because they matched an offer sheet they cannot get anything for him.

Theyre only other option is to take the picks, which would likely be late 1sts and not equal to his true value.

In other words a smart GM that didnt intend to do buisness with nashville in the future (division rivals AKA Detriot) would be smart to do this.
Could Detroit technically sign him to a long contract extension immediately after the fact? If so, that would take a bit of the sting out of losing the 4 1st round picks.

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07-05-2012, 05:33 PM
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You can have a signing bonus and a performance bonus. I do not believe you can have a bonus for playing in a specific location. As far as I understand they just have to match the salary portion. They would just alter the pf bonus.
Again, bolded isn't true.

Can get a performance bonus:
- player signing an ELC (e.g. Nugent-Hopkins, Brayden Schenn)
- 35+ player on a 1-year contract (e.g. Doug Weight for a while)
- player returning from major injury (e.g. Latendresse)

Cannot get a performance bonus: everybody else.

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07-05-2012, 05:35 PM
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Originally Posted by Stewie Griffin View Post
Could Detroit technically sign him to a long contract extension immediately after the fact? If so, that would take a bit of the sting out of losing the 4 1st round picks.
They'd need to wait until January 1st. You can normally sign a player to an extension anytime after July 1st in the final year of the player's previous contract, but that date goes to January 1st for players on 1-year deals.

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07-05-2012, 05:42 PM
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Poison pill contracts really only work sports without guaranteed contracts like the NFL.

That is why Minnesota was able to use it to get Steve Hutchinson from Seattle. If I recall, it was something like playing 5 games in the state of Washington in any one season meant the whole 7 year contract was due, paid in full after the game.

At the time, the NFL said it was a valid contract which didn't make sense to me. Nevermind I am a Seahawks fan, what didn't make sense was if Seattle matched it (Paul Allen from Microsoft could cut the check in a heartbeat) then Hutch would have to work for free the next 6 years.

To me, that just doesn't seem feasible?

Since then they have quietly told the owners those contracts won't be honored so knock it off. Because the NFL is a pretty shady company, as I get older, my love for the game shrinks a bit. The NFL honored the contract for Minnesota because they had a new owner and would want/need a new stadium in the near future. The easiest way to get tax payers to pay for a stadium is roll out a championship team.

The reason you don't hear about them in other sports is because there is no point. The player will get the money no matter what and the bonus isn't that big.

Plus a good agent is going to go back to the home team and say, "this is what we've been offered, give him a contract that matches the bonus". Unless that player just wants out of that organization.

If that's the case, then take the draft picks and say thanks. Who wants a player who doesn't want to be on the team.

Just to wrap up the Hutchinson debacle, he was cut before the end of the contract which everyone knew was going to happen. He got the bulk of the money.

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07-05-2012, 05:46 PM
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Originally Posted by Halibut View Post
It's also poison to Weber so no way he signs it. Stuck on a sad sack Nashville team for a full season when he's shown he wants out and he cant be traded. He'll be booed every night. He'd be better off just signing the qualifying offer and at least leave Nashville the opportunity to trade him during the season.
I think he's saying that Detroit makes the 1 year offer knowing he won't sign it and then Nashville has to match it? Det makes the offer just to screw Nashville.?

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07-05-2012, 05:51 PM
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Originally Posted by danishh View Post
the poison pill in an NHL sense would be frontloading a contract so much that small-market teams find it prohibitively expensive.

so in weber's case, something like a 5 year deal, but 14M for each of the first two years (with most of that in signing bonuses).

in the cap world, it is going to be far less effective than it was before (for example the federov offersheet, where he had 28M in bonuses for the first year if the team he signed with made the conference finals)
Or the year Chris Gratton was the second-highest paid player in the league at $10.15 million.

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