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Rich Teams May Benefit from Buy-Outs

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Old
05-17-2013, 05:23 PM
  #26
Djp
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Originally Posted by Domino11 View Post
Every team will probably use there 2 buy out .... I know for a fact mtl is using there 2 loll Gomez and kaberleeeeeeee ! Why can't we trade some of those buy out so mtl would buy like phx or someone else that can't afford to buy so that we could buy out more dump contract
All Teams would not....but the only way all team would be through the salary dump trades where eam X sent player to team Y then team Y will buy him out when they can, but in doing so they get a good player or two.

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05-17-2013, 05:28 PM
  #27
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Originally Posted by King Canuck View Post
A poster on the Canucks board brought this up. For instance say VAN and PHI did a deal for Luongo(Hypothetical) Say it's Briere and a 1st rounder or prospect for Luongo. If Van buys out Briere, couldn't PHI just sign him to a cheaper contract?

This has been posted all over the place where a team takes a bg salary with the plan to buy out the player the just acquired and he resigns with his original team.

It's effectively buying player/piks for the ost of the contract buyout.

N another thread someone suggested buffalo gets LeCav from Tampa then buys out the $45 M w/7 yrs left...then he resigns with Tampa...so buffalo is getting the players at the cost of the $30M buy out.

Another part f it s when can a team buy hm out.

There will be two windows...in late June before UFAs start and in September after arbitration hearings. If they trade for player X in late June and the lose bg in arbitration hearings will they be able to buy out player X.

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Old
05-17-2013, 06:28 PM
  #28
I in the Eye
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Originally Posted by Freudian View Post
Even rich teams care about money. I don't think any team would line up to pay DiPietro $24M this summer even if they get a prospect out of it. Paying for their own mistakes is easier to swallow.
The thing is though, the NHL is an excellent tax shelter... I remember reading somewhere, sometime, that a NHL team qualifies as a "tax-exempt organization"... So, if you are a super rich owner, and are trying to reduce your taxable income - the NHL is a fantastic place to do it... The money you put into it, if I recall correctly, is tax exempt (if it wasn't completely exempt, it was a significant tax advantage)... and yet, you can still make money off of the team year-to-year (nice-to-have)... You own the franchise, so at worst, you are investing into the long-term franchise value (an asset of yours)... Better pay that $24m to yourself, into something you own that should appreciate over time, then the government... You could put $24m of tax exempt (or tax favourable) income into Dipietro (whatever his buyout is), and it is a justifiable expense... into an investment that you own (the NHL team)...

In short, you're right... Rich owners care about money... Rich owners also hate paying taxes, and would rather keep that money for themselves... so I think the ones who are trying to lower their taxable income by $24m (or more) would be lining up to get Dipietro... Heck, maybe Wang would like to do it himself... and another team compensates Wang more for the opportunity to buy Dipietro out instead... Compliance Buyout... Must have been an owner-suggested CBA stipulation...

Edit: just did a quick Google search about NHL and tax shelter (in case anyone is interested)... Haven't read through the articles myself yet (but skimming them, looks like government doesn't like the NHL or NFL being tax exempt):

- http://taxprof.typepad.com/taxprof_b...n-coburns.html
- http://mbd.scout.com/mb.aspx?s=64&f=1867&t=11545428
- http://deadspin.com/5816870/exclusiv...8-million-loss

Edit2: Looks like the entire league (i.e. NHL) is the tax exempt organization (obviously), and (of course) not the specific teams, who are members of this organization (brain freeze)... but I think the point stands... A NHL team is an excellent tax shelter... To reduce taxable income, Dipietro is a justifiable expense into a long-term investment...


Last edited by I in the Eye: 05-17-2013 at 07:12 PM.
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Old
05-17-2013, 09:24 PM
  #29
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My question is - and I've been thinking about this for a while - is how much are draft picks worth in cash outside the cap? For example if dipietro gets traded strictly for buyout reasons, and only picks go the other way, how much value to we give the picks?

Would a first rounder be worth $10 million? More? Less? I guess it also depends on where in the draft order, but that probably wouldn't be known at the time.

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05-17-2013, 10:00 PM
  #30
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Originally Posted by BROOKLYnKNIGHTS View Post
I don't know how anyone could defend Zajacs contract.
We realize Luongo and Sipietros are much worse but Travis was never worth that deal. It's like NJ was awarding him for Parise leaving.
I think it's a complete joke that dipietro and luongo's situations are being compared. One player is completely awful and cannot even backup in the NHL and the other is still among the best at his position. One is a certain buyout, the other certainly not.

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05-17-2013, 10:43 PM
  #31
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Originally Posted by allan5oh View Post
My question is - and I've been thinking about this for a while - is how much are draft picks worth in cash outside the cap? For example if dipietro gets traded strictly for buyout reasons, and only picks go the other way, how much value to we give the picks?

Would a first rounder be worth $10 million? More? Less? I guess it also depends on where in the draft order, but that probably wouldn't be known at the time.
I dont see any team taking on a significant amount of money as part of a salary dump just to aquire prospects/picks.

The types of deals that would be done are ones that are 1-3 yrs max and the dollar amount isnt too excessive where the total amount left is at or under $24M

You will not see players traded who have 6+ yrs and $30M+ left on their contract dealt for the ability to be a buy out.

This comes out as $30M you are paying for a pick and prospect. that seems like a major overpayment.

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05-17-2013, 11:05 PM
  #32
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Originally Posted by nickschultzfan View Post
Obviously buy-outs were for rich teams who made past stupid decisions and signed terrible contracts.

The Buy-out Clause was the Wall Street Bailout of the CBA.
Some are, some aren't. Most of the contracts the Canucks are looking to buy out were Florida's doing. Florida's a cap floor team, they signed them, and our bad decision was acquiring them.

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05-18-2013, 01:28 AM
  #33
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Originally Posted by Djp View Post
I dont see any team taking on a significant amount of money as part of a salary dump just to aquire prospects/picks.

The types of deals that would be done are ones that are 1-3 yrs max and the dollar amount isnt too excessive where the total amount left is at or under $24M

You will not see players traded who have 6+ yrs and $30M+ left on their contract dealt for the ability to be a buy out.

This comes out as $30M you are paying for a pick and prospect. that seems like a major overpayment.
It would be interesting to find out how much Crosby has been worth to the Pens, net. Or how much Yashin cost the Isles. Or any player for that matter. Could that affect the return? The projected net value of a prospect?

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05-18-2013, 03:24 AM
  #34
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Originally Posted by DevilChuk View Post
I love how Zajac's contract is considered an albatross based on 48 games when he hasn't even played a single game under that contract yet. Consider it overpayment.. but to putting it on par with DiPietro and Luongo's contracts is laughable.
Its not as bad as dipietro but I think Luongos contract is better than Zajacs. Luongo is still a top tier goalie who is now very motivated while Zajac was never worth that contract. The contarct is just plain dumb. Hes a solid player but that will be looked at as one of the worst contracts in the league (its starting to already).

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05-18-2013, 03:59 AM
  #35
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Originally Posted by ginner classic View Post
I think it's a complete joke that dipietro and luongo's situations are being compared. One player is completely awful and cannot even backup in the NHL and the other is still among the best at his position. One is a certain buyout, the other certainly not.
DiPietro- hasn't been able to stay healthy and produce the last 4-5 seasons.8 yrs left on his deal at $4.5m per. Negative trade value.


Luongo-33 yrs old, with 8-9 yrs left on his contract, paying $5m+ per season. Younger, cheaper quality goalies available, on shorter contracts.

Yes, Luongo is more valuable because he's healthy and contributing, but that 8-9 yrs left on his deal ,is a huge negative. Other teams don't want that longterm deal and Vancouvers in cap trouble.

You really can't see why both are buyout candidates?

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05-18-2013, 12:56 PM
  #36
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Originally Posted by CREW99AW View Post
DiPietro- hasn't been able to stay healthy and produce the last 4-5 seasons.8 yrs left on his deal at $4.5m per. Negative trade value.


Luongo-33 yrs old, with 8-9 yrs left on his contract, paying $5m+ per season. Younger, cheaper quality goalies available, on shorter contracts.

Yes, Luongo is more valuable because he's healthy and contributing, but that 8-9 yrs left on his deal ,is a huge negative. Other teams don't want that longterm deal and Vancouvers in cap trouble.

You really can't see why both are buyout candidates?
But if the canucks compensate by taking back $7 - $14m in a bad contract, that's equivalent to the canucks paying the last 4 or 5 years of Lu's deal, on Lu's new team's behalf... Lu is instantly more attractive... with DiPietro, can put as much lipstick as you can on him... He's still clearly a pig...

There are ways to make Lu pretty... for his inner beauty to shine... DiPietro is simply ugly...

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05-18-2013, 01:54 PM
  #37
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Originally Posted by caley View Post
http://www2.canada.com/theprovince/n...c-84a547703ea1

The

His hypothetical situation is if the Islanders were interested in Luongo (and Botchford says they're not), in theory they could send a good asset (Say Nino Niederreiter) to the Canucks along with Rick DiPietro in exchange for Luongo. The Islanders get a good goalie on a bad deal, the Canucks get a good young player and buy-out DiPietro. As it's a compliance buy-out, the Canucks don't have to worry about the cap hit of DiPietro's buy-out, just the real dollars they actually have to pay him which you excuse by saying, at least the Luongo deal is off the books.

It's an interesting idea, one I haven't seen bandied around these boards too often. We saw something similar a couple years back when the Islanders wanted out from under Trent Hunter's deal and sent him to New Jersey for Brian Rolston. The Isles were banking on Rolston rebounding (he didn't), and the Devils bought out Hunter within days of acquiring him.

Botchford specuates that it could facilitate a Luongo deal with Florida if the Canucks were willing to take back Scottie Upshall's contract in return. And Florida is a team I've heard does not have the money to make a compliance buy-out (Their beat writer speculated as much on a question about Ed Jovanovski a month or so back), so there could be something there.

It's an interesting thing to consider. Teams like Phoenix (Zbynek Michalek has two more years with a $4 million cap hit); NY Islanders (DiPietro); or New Jersey (Travis Zajac's $5.75 cap hit) who might want to get out from under contracts but don't have the money to do so, could move said player along with an asset (Draft pick or prospect) to a rich team willing to pay the money to buy them out.
The Hunter deal was nothing like this. I think Rolston at 1 year 5 million was paid more than Hunter's two at 4

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05-18-2013, 02:03 PM
  #38
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Originally Posted by Layne Staley View Post
Buying out Yashin saved them a lot more then if he continued to play out his contract. Wang has proven to be very cheap since buying the team. The Isles traded for Tim Thomas just to comply with the cap. He is a frugal owner and I'd bet anything that with him owning the team that the Isles will never spend to the cap.
You don't understand the circumstances. Wang is not a cheap owner at all. There are so many different variables that ignorant outsiders like yourself don't care to take the team to figure it out. In fact most islander fans like the teams direction of building through the draft and within. Once these guys mature and the team is in Brooklyn regardless of who is the owner money will be spent.

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05-18-2013, 02:08 PM
  #39
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Originally Posted by ginner classic View Post
I think it's a complete joke that dipietro and luongo's situations are being compared. One player is completely awful and cannot even backup in the NHL and the other is still among the best at his position. One is a certain buyout, the other certainly not.
I get the point and agree fully and look to Leino as a dumb deal but you would think gms would learn from these mistakes.

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05-20-2013, 01:48 AM
  #40
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05-20-2013, 04:35 AM
  #41
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Originally Posted by caley View Post
http://www2.canada.com/theprovince/n...c-84a547703ea1



His hypothetical situation is if the Islanders were interested in Luongo (and Botchford says they're not), in theory they could send a good asset (Say Nino Niederreiter) to the Canucks along with Rick DiPietro in exchange for Luongo. The Islanders get a good goalie on a bad deal, the Canucks get a good young player and buy-out DiPietro. As it's a compliance buy-out, the Canucks don't have to worry about the cap hit of DiPietro's buy-out, just the real dollars they actually have to pay him which you excuse by saying, at least the Luongo deal is off the books.

It's an interesting idea, one I haven't seen bandied around these boards too often. We saw something similar a couple years back when the Islanders wanted out from under Trent Hunter's deal and sent him to New Jersey for Brian Rolston. The Isles were banking on Rolston rebounding (he didn't), and the Devils bought out Hunter within days of acquiring him.

Botchford specuates that it could facilitate a Luongo deal with Florida if the Canucks were willing to take back Scottie Upshall's contract in return. And Florida is a team I've heard does not have the money to make a compliance buy-out (Their beat writer speculated as much on a question about Ed Jovanovski a month or so back), so there could be something there.

It's an interesting thing to consider. Teams like Phoenix (Zbynek Michalek has two more years with a $4 million cap hit); NY Islanders (DiPietro); or New Jersey (Travis Zajac's $5.75 cap hit) who might want to get out from under contracts but don't have the money to do so, could move said player along with an asset (Draft pick or prospect) to a rich team willing to pay the money to buy them out.
It is an interesting concept, but I'm having difficulty seeing how practical this will be, ginven the fact that even rich teams have contracts of their own that they would like to expunge before they consider taking on another team's bad contract.

Also, if I'm not mistaken, each team has only two of these buy-outs and can only use one amnesty/compliance buy-out per season. If indeed true, then the rich will be even more careful about using these buy-outs to help out other teams.

I just can't see woners stroking such large checks for their own players (unless they absolutely have to), so why would they do this for someone else's?

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05-20-2013, 07:02 AM
  #42
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I think its VERY hard to place monetary value on the uncertainty of a draft pick or prospect.

Even MLSE, who have all the money in the world. If Nonis approaches them with a trade option to buyout another teams ~15M$ contract... What EXACTLY is 15M worth to MLSE in terms of hockey assets? Would they pay that for a late 1st round pick? I dont think so. For an early 1st rounder, sure, but the other team wouldnt do it.

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