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Cap Circumventing Contracts

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Old
07-16-2012, 12:32 PM
  #51
Brian Boyle
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Quote:
Originally Posted by bcjonny View Post
I understand that these contracts basically ended with the Hossa and Luongo Deals and that New Jersey was penalized very harshly for signing Kovalchuk to one.

I am a bit miffed at how the Brad Richards Contract is able to be acceptable to the NHL.

11-12 12 Million
12-13 12 Million
13-14 9 Million
14-15 8.5 Million
15-16 8.5 Million
16-17 7 Million
17-18 1 Million
18-19 1 Million
19-20 1 Million

Aren't there rules in place that make going from 7 Million to 1 Million in one season against the rules. How come this contract was allowed to stand and why were the Rangers not sanctioned.

How this ties into Trades and Free agents is he signed this contract last year as a free agent.
After the Kovalchuk contract, the NHL clearly defined how much circumvention they will allow. This fits within.

The drop from 7 to 1 is within the rules because you can drop 50% of the lower of the first two years, in this case being 6 million.

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07-16-2012, 12:40 PM
  #52
Jarick
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I could see a few solutions...

First, allow maybe 10-15% of the cap in "overage" for players not on the roster anymore. I.e. players bought out or retired. But otherwise retired contracts at any age count.

Cap hit = salary = same across the board for all years, including signing bonuses.

Cap length of contracts at ~6 years. 5 seems a bit short, 10 is way too long.

Maybe allow each franchise to have a "franchise" guy who might not count toward the cap, or they can spend 5-10% over the cap with him, or something like that. So if a team has a Crosby, they can still pay him a ton of cash but can still afford to field a competitive team. Star players are necessary for healthy franchises...

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07-16-2012, 12:42 PM
  #53
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Rules should be something like this.

Actual pay in any given year may not be more than 20% higher or 20% lower than the cap hit of the entire contract for any given year.

So a $100 million 13 year deal with a cap hit of $7.7 million may pay as much as $9.25 million a year, but can't pay less than $6.4 million a year.

Change the 20% to 15% or 25% would be ok too. The point is to eliminate throw away years and this would do it.

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Old
07-16-2012, 12:48 PM
  #54
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The infuriating thing is how much the Devils lost for the Kovalchuk contract (3 million dollars, 1st round pick, 3rd round pick) while Minnesota gets away with it. When the Devils did it, they did not break a single established rule - they were simply punished for "going too far" over a line that other teams had previously walked over. Then the league sets a precedent with Kovalchuk and the Richard Bloch review, where the arbitrator stated that the Hossa/Luongo type deals WERE circumvention based on the main features of Taking the player to an old age, Creating artificial years with very low pay that reduce the overall cap hit, and the unlikely prospect of the player finishing the contract.

The Parise and Suter contracts take them to an old age, reduce the cap (from ~9.5m to ~7.5m) with artificial low cost years, and are unlikely to be played out entirely. I understand that it's "legal" within the confines of the "How much can you drop in a given year" rule, but it's the SAME DAMN THING that the league already called circumvention and the league didn't say a word about it.


Also keep in mind that a 1st and 3rd rounder have more value than just the players themselves. It also negates any potential revenues that the players would generate for the team - merch sales, increased attendance due to improved team performance, potential playoff revenue if the player is a contributor, and the money that the team may have to spend on the Free Agent market to acquire a comparable player who would otherwise have 7 years of ELC/Restricted status... That's a lot of money.

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Old
07-16-2012, 12:49 PM
  #55
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Stuffing guys in the minors has to stop too. It's not fair to the players and it's not fair to the fans.

To fix that, I propose that the amount of minor league players' salaries that exceeds $1 million (on an individual basis) will still count towards the NHL cap.

Wade Redden's salary for example (I think his contract averages 6.5 a year) would see an NHL cap hit of 5.5 a year.

Doing something like this would really make GM's think twice before signing players to long term deals. It's not fair that wealthy teams get to bury their mistakes in the minors. They should have to pay for them and not just monetarily. Allowing the first $1 million to be exempt would cover every players' ELC's and almost all of every other prospects' entire contracts.

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07-16-2012, 12:49 PM
  #56
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Quote:
Originally Posted by GentlemanOfLeisure View Post
It's pretty much understood that once the new CBA gets hammed out the Devils penalty (1st round pick , they were already docked the 3rd round pick from 2011 draft ) will be lessened. Perhaps to a 2nd round pick or even 3rd.
i remember reading a while back that the new cba cannot lessen any fine, penalty, or suspension given during the previous cba. if i remember correctly, they cant even discuss the matter.

ill look for the article for verification........but dont hold your breath. i dont remember who wrote it or what site it was on.

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Old
07-16-2012, 01:01 PM
  #57
AfroThunder396
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Personally, I think that whatever team offers a player their first professional contract, that team maintains 'discount rights' to that player as long as that player stays on the same franchise. That player's cap hit would be 10% lower as long as he plays for the franchise that offered him his first pro contract, via draft rights or undrafted free agency.

EXAMPLE: Patrik Elias was drafted by New Jersey, his contract has an AAV of $6M per season ($42M / 7 seasons). As long as he plays for New Jersey, his cap hit is 10% lower. So New Jersey would be responsible for a $5.4M cap hit while Elias still makes his full salary. Were he to be traded, the team receiving him would be responsible for the full $6M cap hit.

This encourages homegrown talent and rewards teams for drafting/scouting well while the players make the full salary they're entitled to.

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07-16-2012, 01:04 PM
  #58
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Quote:
Originally Posted by Jarick View Post
Maybe allow each franchise to have a "franchise" guy who might not count toward the cap, or they can spend 5-10% over the cap with him, or something like that. So if a team has a Crosby, they can still pay him a ton of cash but can still afford to field a competitive team. Star players are necessary for healthy franchises...
This has always been my preference. Part of keeping fans is keeping the team together as much as possible and this idea would certainly help in that regard.

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Old
07-16-2012, 01:11 PM
  #59
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Quote:
Originally Posted by bcjonny View Post
I just looked at the two latest long term big dollar signings and guess what...

Zach Parise and Ryan Suter both are making 2 Million, 1 Million and 1 Million in the last 3 years of their contracts.

I say again the Salary Cap should be based on actual dollars spent on Salary AND Performance Bonuses AND Signing Bonus in a given year. Its the only fair way.
Every team that struggles to reach the cap floor would be against that. As it is, the big market teams get away with spending more than the cap ceiling in actual salary, and the small market teams get away with spending less than the floor.

You think Wang wouldn't love to have Tim Thomas on his team right now? If he plays, that's a 5 mil cap hit for 3 mil dollars. If he doesn't play, that's a 5 mil cap hit for free.

Setting limits on contract length will help the issue without overly hurting either side. If the max contract length is 5 years, no contract can take a player to 40 years old without being a 35+ contract.

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07-16-2012, 01:30 PM
  #60
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I can't stand the franchise discount idea. Seems like we should either have a cap or not have a cap. If we're going to have one, we shouldn't have carve-outs for this group or that group.

Besides, that idea only reduces parity in the league. Big teams already have a huge incentive to spend a ton of money on scouting departments because it's the only way they can gain a competitive advantage.

Look at the star players that were drafted after the 5th round. They generally already sign for less and don't leave their teams even once they're established stars. I think this is because they're appreciative of the fact that the team took a chance on them to begin with and if they hadn't drafted them, they might not be playing.

So you really want to provide even more incentive for the big teams to outspend smaller markets on scouting?

By extension you're also encouraging small teams who can't afford huge scouting departments to tank more frequently so that their picks have a greater chance of producing home grown talent. I don't think that's a good thing either. Small teams have enough trouble remaining profitable as so as it is. When they're rebuilding it becomes especially hard to get people to come out to games. Reduce the already low 12% chance they have of getting something good past the 2nd round and you're really hurting these guys.

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Old
07-16-2012, 01:34 PM
  #61
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Allowing a franchise tag or something similar also complicates the CBA. Obviously our current CBA is already too complicated because teams are structuring contracts that get around the spirit of the agreement. Throwing in these franchise discounts will only make the problem worse, not better.

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07-16-2012, 01:55 PM
  #62
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Quote:
Originally Posted by fizban View Post
Stuffing guys in the minors has to stop too. It's not fair to the players and it's not fair to the fans.

To fix that, I propose that the amount of minor league players' salaries that exceeds $1 million (on an individual basis) will still count towards the NHL cap.

Wade Redden's salary for example (I think his contract averages 6.5 a year) would see an NHL cap hit of 5.5 a year.

Doing something like this would really make GM's think twice before signing players to long term deals. It's not fair that wealthy teams get to bury their mistakes in the minors. They should have to pay for them and not just monetarily. Allowing the first $1 million to be exempt would cover every players' ELC's and almost all of every other prospects' entire contracts.
I kind of like this idea aswell. But I would also think that it would be an interesting idea if all of the contracts up to the 50 contract limit would count against the cap.

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07-16-2012, 01:57 PM
  #63
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Quote:
Originally Posted by bcjonny View Post
I understand that these contracts basically ended with the Hossa and Luongo Deals and that New Jersey was penalized very harshly for signing Kovalchuk to one.

I am a bit miffed at how the Brad Richards Contract is able to be acceptable to the NHL.

11-12 12 Million
12-13 12 Million
13-14 9 Million
14-15 8.5 Million
15-16 8.5 Million
16-17 7 Million
17-18 1 Million
18-19 1 Million
19-20 1 Million

Aren't there rules in place that make going from 7 Million to 1 Million in one season against the rules. How come this contract was allowed to stand and why were the Rangers not sanctioned.

How this ties into Trades and Free agents is he signed this contract last year as a free agent.

Already brought this up a while ago... Search:



http://hfboards.hockeysfuture.com/sh...375&highlight=

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Old
07-17-2012, 05:48 PM
  #64
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I read that thread and still think that the system as it is constructed encourages basically teams to be dishonest.

Earlier I said that the salary paid in a year should be the cap amount but after reading and thinking ... it sometimes hurts ... the owners and GM's and agents would conspire to construct super teams with superstars having coinciding low salary years and then acquire a couple more for cup runs.

I find it so frustrating that teams are now considering acquiring contracts that were frontloaded to make it to this magical cap number. If the cap floor is too high it is insane to send half the teams into bankrupcy trying to get to a specific salary level. A level that is based on smoke and mirrors.

End the Bullsh1te... Either set up a system of a salary cap where all compensation is equal for all the years of the contract and the cap is determined by actual dollars spent in a given year or go to the luxury tax. Exceed the cap and you pay a 100% penalty for the first 5 million overage and then 200%, 300%, 400% ... increasing for every 5 million after and make this payable on the complete overage and not on the margin. This would mean a team that over spends in real dollars on the cap by 6 million would contribute 12 million as a penalty. If a team wants to go over by 20 million then they will be chipping in an extra 80 Million.

End the cash equalization program as it exists right now... It only creates inflation as the needy and non profitable teams are going all in on the big Free Agents with house money. It's insane. Any monies from the luxury tax should be distributed to the teams in need that have demonstrated their competitive natures... that is spent money on salaries to reach a floor level of spending.

This would be my magical wand solution to the NHL and NHLPA if I were an omnipotent wizard.

How can the NHL be taken seriously when it has a system in place that would allow contracts to be traded for on players like Tim Thomas who is taking a year off. If you do that kind of bookkeeping you will find yourself in Jail as a citizen.

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Old
07-17-2012, 05:52 PM
  #65
seanlinden
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Quote:
Originally Posted by AfroThunder396 View Post
Personally, I think that whatever team offers a player their first professional contract, that team maintains 'discount rights' to that player as long as that player stays on the same franchise. That player's cap hit would be 10% lower as long as he plays for the franchise that offered him his first pro contract, via draft rights or undrafted free agency.

EXAMPLE: Patrik Elias was drafted by New Jersey, his contract has an AAV of $6M per season ($42M / 7 seasons). As long as he plays for New Jersey, his cap hit is 10% lower. So New Jersey would be responsible for a $5.4M cap hit while Elias still makes his full salary. Were he to be traded, the team receiving him would be responsible for the full $6M cap hit.

This encourages homegrown talent and rewards teams for drafting/scouting well while the players make the full salary they're entitled to.
What on earth is the incentive for the league to do this? New players on new teams builds excitement and generates parity.

As for fixing the circumvention problem -- to me this is really simple. Limit the variance in the contract to no more than 10% year over year. You shouldn't stop a team from wanting to give a young player a backloaded contract or an old player a frontloaded deal, because in many cases it accurately reflects their expected contribution to the team. However, there's really no way you can justify that a player is worth differences of 20-30% year-over-year.

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Old
07-17-2012, 06:04 PM
  #66
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It'll be really Interesting to see how these contracts turn out ten years from now.

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Old
07-17-2012, 06:11 PM
  #67
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I think that they shouldn't be able to pay more than 2.5 over or 2.5 under the cap hit in any year of the contract and max 9 year deals.

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Old
07-17-2012, 07:35 PM
  #68
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Quote:
Originally Posted by bcjonny View Post
Is using actual $$$ paid to the players in a given year such a stretch...

It would suck for Minnesota though as they would have 44 million committed to 2 players for next season already.
They did this to themselves, all the while having an owner who was preaching a different tune...

These guys need protection from themselves...

Brutal business deals....

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