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Cap circumventing contracts NOT grandfathered in?

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Old
01-07-2013, 08:49 PM
  #51
Ernie
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A list of cap-circumventing contracts (with age of player when contract ends).

Kovalchuk - 44
Luongo - 43
Hossa - 42
Weber - 41
Parise - 40
Suter - 40
Keith - 40
Zetterberg - 40
Franzen - 40
(Brad) Richards - 40
Lecavalier - 39
Ehrhoff - 39

Minnesota has it by far the worst - Suter and Parise both have their contracts hit $2m in 2022. They'll likely retire at that point and Minnesota will be carrying their combined $15m cap hit for 3 years.

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01-07-2013, 09:21 PM
  #52
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Quote:
Originally Posted by Ernie View Post
A list of cap-circumventing contracts (with age of player when contract ends).

Kovalchuk - 42 4.7 x 5 years
Luongo - 43 4.1 x 3 years
Hossa - 42 4.275 x 4 years
Weber - 41 6.9 x 3 years
Parise - 40 6.2 x 3 years
Suter - 40 6.2 x 3 years
Keith - 40 3.7 x 2 years
Zetterberg - 40 5.2 x 2 years
Franzen - 40 2.95 x 2 years
(Brad) Richards - 40 5.7 x 3 years
Lecavalier - 39 6.5 x 2 years
Ehrhoff - 39 3.0 x 3 years

Minnesota has it by far the worst - Suter and Parise both have their contracts hit $2m in 2022. They'll likely retire at that point and Minnesota will be carrying their combined $15m cap hit for 3 years.
I've edited it to include the cap recapture if they retire just before their bogus years... The ones for Weber, Parise and Suter are a bit painful...


Last edited by sweatypickle: 01-07-2013 at 09:30 PM. Reason: Kovalchuk is 42 at the end of his deal. 44 was the original 17 year contract.
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01-07-2013, 09:27 PM
  #53
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Nice work, thanks! What exactly is the formula? I thought it was just the average cap hit.

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01-07-2013, 09:39 PM
  #54
sweatypickle
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Originally Posted by Ernie View Post
Nice work, thanks! What exactly is the formula? I thought it was just the average cap hit.
( ( (Contract Value - Bogus Years Value) / (Total Years - Bogus Years) ) - Cap Hit) * Non Bogus Years / Bogus Years

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01-07-2013, 09:42 PM
  #55
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Since the NHL is going after contracts they approved under an old CBA, they should allow an optional one-time restructuring of those deals.

NONE of them were offered nor signed with the knowledge that, if approved, the club could one day be subject to penalties.

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01-07-2013, 09:44 PM
  #56
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According to Elliot Freidman, the cap recapture is divided up if a player with a circumventing deal is traded...

http://www.cbc.ca/sports/hockey/opin...to-luongo.html

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01-07-2013, 09:47 PM
  #57
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Originally Posted by njdevsfn95 View Post
Since the NHL is going after contracts they approved under an old CBA, they should allow an optional one-time restructuring of those deals.

NONE of them were offered nor signed with the knowledge that, if approved, the club could one day be subject to penalties.
Unless you believe the rumblings that Bettman warned owners and GMs again and again that he was going after them in the next CBA. Besides, what player would agree to a restructuring that would hurt their teams ability to compete (assuming their dollars stayed the same)...

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01-07-2013, 09:48 PM
  #58
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That makes so much more sense, sweatypickle. Balance has been restored to the universe.

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01-07-2013, 09:51 PM
  #59
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Originally Posted by sweatypickle View Post
According to Elliot Freidman, the cap recapture is divided up if a player with a circumventing deal is traded...

http://www.cbc.ca/sports/hockey/opin...to-luongo.html
That is a wildly different calculation than what the NHL proposed a month ago. Interesting.

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01-07-2013, 09:52 PM
  #60
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There is no such thing as a cap circumvention contract. Cap circumvention was illegal under expired CBA. All of these long term contracts were deemed legal, ergo, none are cap circumvention contracts.

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01-07-2013, 09:58 PM
  #61
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Originally Posted by LeftCoast View Post
There is no such thing as a cap circumvention contract. Cap circumvention was illegal under expired CBA. All of these long term contracts were deemed legal, ergo, none are cap circumvention contracts.
Semantics.

If you want to call those contracts legal, which technically they are, then I can say the CBR clause is not a punishment, because technically it is not.

All it is doing is retroactively adding cap charges because they didn't earn the AAV they used. In other words, when a player retires, the clause simply guarantees that the team gets charged with the appropriate AAV.


Last edited by Crease: 01-07-2013 at 10:07 PM.
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01-07-2013, 10:01 PM
  #62
sweatypickle
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Originally Posted by LeftCoast View Post
There is no such thing as a cap circumvention contract. Cap circumvention was illegal under expired CBA. All of these long term contracts were deemed legal, ergo, none are cap circumvention contracts.
Heh. Insert Spiritual Cap Circumvention contracts if you will...

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01-07-2013, 10:26 PM
  #63
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Originally Posted by Crease View Post
That is a wildly different calculation than what the NHL proposed a month ago. Interesting.
I wonder how the "cap recapture" rules are written - and what would be the effect on a non-circumventing back-loaded contract.

If a player with a back-loaded deal retires, would a team get a cap credit for those years where his cap hit exceeded the actual salary paid?

There is precedent for this in the old CBA cap hit rules for Buyouts - which similarly guaranteed that the total cap hit over a contract equaled the total of pre-buyout salary plus buyout $$$'s. Front loaded SPCs had significant post-buyout cap hits to recapture the pre-buyout cap benefits accrued. Buyouts of back loaded SPCs (ie SPCs where the cap hits exceeded the actual salary paid) could generate negative cap hits (cap credits) to make up for the cap penalties incurred before the buyout.

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01-07-2013, 10:31 PM
  #64
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Originally Posted by bobbyb2009 View Post
It absolutely is punishing the teams that signed these deals! And opt course, that is exactly what those of you who's teams did not sign these deals want to see happen.

The issue is, the player who may choose to retire before the end of his deal for any reason, even if he never intended to when signing the deal. And a decision like this will certainly effect the team that signed him to the deal. You may see these deals as cap circumvention, when I may see them as applying the current rules to reward both the loyal player and teams willing to commit to key players in the team.

Teams who gave these players these LEGAL "retirement" deals rewarded the loyal player with long term security while at the same time defining for the player a complimentary role well into the twilight of his career (rather than have to stress about the future in the case of injury, etc..). Clearly, under the old rules, this risk for the teams in providing this security for the players also had the effect of giving the team a break on the cap hit throughout the deal. This was legal when these deals were signed, and as such, they should be treated as such! It was widely known that the player had the right, some would say the option, of accepting a prolonged career and long term security in the chosen city they signed, all for also providing the team with a break on cap hit.

Again, these were the legal rules. It is understandable that the league wants to correct this issue, all for a variety of reasons- including stopping the rich teams from taking advantage of the offer sheet issues like the Webber deal and putting the financial health and competitive abilities of poorer teams at risk.

However, all of the banter about going back in time and creating a disadvantage for teams who applied these rules is absolutely offside in my view. To do it even after a trade is absolutely crazy. There is no logic to thus other than Gary being punitive.

I can not understand why the players association accepted this, if they did. This will take millions out of the system for players who could get singed by these big market teams. If Montreal, for example is on the hook for Gomez cap hit, and he retires for whatever reason (hue doesn't like the abuse from the fans), then Montreal can not use his cap space, and they most certainly would have...
Except you're wrong. From the last CBA :

Quote:
26.3 Circumventions.
(a) No Club or Club Actor, directly or indirectly, may: (i) enter into any agreements, promises, undertakings, representations, commitments, inducements, assurances of intent, or understandings of any kind, whether express, implied, oral or written, including without limitation, any SPC, Qualifying Offer, Offer Sheet or other transaction, or (ii) take or fail to take any action whatsoever, if either (i) or (ii) is intended to or has the effect of defeating or Circumventing the provisions of this Agreement or the intention of the parties as reflected by the provisions of this Agreement, including without limitation, provisions with respect to the financial and other reporting obligations of the Clubs and the League, Team Payroll Range, Player Compensation Cost Redistribution System, the Entry Level System and/or Free Agency.
If there was an spoken or implied agreement that the players would retire, both the team and player are guilty of circumvention, according to the CBA. The league couldn't refuse the contracts legally on suspicion and circumstantial evidence, so the league (and majority of teams) codified a punishment into the new CBA if they WERE lying.

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01-07-2013, 10:33 PM
  #65
sweatypickle
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That makes so much more sense, sweatypickle. Balance has been restored to the universe.
I guess the PA died on that hill too...

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01-07-2013, 10:35 PM
  #66
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Originally Posted by Crease View Post
That is a wildly different calculation than what the NHL proposed a month ago. Interesting.
I did my calculations based on the one from a month ago. It's exactly the same. The only difference is if a player is traded the recapture is split between teams instead of the signing team taking it all.

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01-07-2013, 10:37 PM
  #67
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Quote:
Originally Posted by LeftCoast View Post
There is no such thing as a cap circumvention contract. Cap circumvention was illegal under expired CBA. All of these long term contracts were deemed legal, ergo, none are cap circumvention contracts.
From the CBA :

Quote:
26.10 Investigations.
(a) The Commissioner of the NHL or the Executive Director of the NHLPA (the "Investigator") may, sua sponte or based upon reports or complaints received by either, commence an investigation regarding whether a Circumvention has occurred.
(b) The Investigator's authority to investigate (i) a possible Circumvention relating to an SPC shall in no way be limited by the fact that such SPC was approved and registered by Central Registry pursuant to Article 11 of this Agreement; or (ii) a possible Circumvention relating to financial reporting by a Club, Clubs or the League shall in noway be limited by the fact that the Initial, Interim or Final HRR Report has been issued by the Independent Accountants
119

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01-07-2013, 10:39 PM
  #68
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Originally Posted by sweatypickle View Post
I did my calculations based on the one from a month ago. It's exactly the same. The only difference is if a player is traded the recapture is split between teams instead of the signing team taking it all.
So its wildly different?

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01-07-2013, 10:42 PM
  #69
sweatypickle
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So its wildly different?
Heh.

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01-07-2013, 10:51 PM
  #70
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I just don't see the objective argument against this.... if as a team you pay a guy more than his cap hit in the years he's playing, then that cap hit should be recaptured into the future.

If you sign a contract that seems to be in the best of faith, like a Carter/Richards deal, then there's minimal risk. If you grossly abused the loopholes in the last system like a Luongo/Hossa/Kovalchuk deal, then there's substantial risk.

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01-07-2013, 11:23 PM
  #71
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Teams already have the way around this. Have your doctor flunk them physically, which isn't stretch for really any player that has played tons of years in the NHL. Put them on LTIR and free the cap space. It only becomes really interesting if these guys are on other teams. What interest does Luongo's future employer have in protecting the Canucks? However someone like Pronger won't retire from his injury, he will just not play until his deal expires and we all know why. He gets paid and they save cap space. If Zetterberg wants out at 38, the Wings will simply say his back that has some problems just cannot hold up anymore and wink wink nod nod he will go along with it. I expect to see a lot of this.

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01-07-2013, 11:27 PM
  #72
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Originally Posted by RedWings19405 View Post
If Zetterberg wants out at 38, the Wings will simply say his back that has some problems just cannot hold up anymore and wink wink nod nod he will go along with it. I expect to see a lot of this.
However, as we saw with Mogilney, the League has the right to have him examined by an independent 3rd party physician to determine if he is really physically unfit to play (due to an injury sustained in the course of his employment as an NHL player).

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01-07-2013, 11:40 PM
  #73
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Originally Posted by kdb209 View Post
However, as we saw with Mogilney, the League has the right to have him examined by an independent 3rd party physician to determine if he is really physically unfit to play (due to an injury sustained in the course of his employment as an NHL player).
That is true, although as I was pointing out a lot of these guys carry injuries when they are older that could easily have them found unfit. Also, some of these teams could get their insurance companies to basically say they won't pay for him to play. I just think that is the trend we are going to see when these all come up. The harder part for a Kovy is if he wants to retire from the NHL and play in the KHL for a couple years. The Devils honestly might have given him their blessing at the end of the contract not really caring or pursuing him to stop him from doing that. They won't be able to do that now, even if they were pretending the injury was the hang up.

But I don't think either of the Wings guys are going to play in the SEL after they are done. Franzen and Zetterberg could be cases where the Wings push an injury as the reason and get cap relief. That is assuming either player actually wants to walk away in the first place. I think the harder part becomes guys on LTIR have to stay under some form of team care if I understand it right. So lets say Pronger doesn't want to live in Philly anymore in a year or two and thinks he has all the money he needs and files papers anyway. Then I don't know what the team could really do.

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01-08-2013, 12:10 AM
  #74
sweatypickle
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However, as we saw with Mogilney, the League has the right to have him examined by an independent 3rd party physician to determine if he is really physically unfit to play (due to an injury sustained in the course of his employment as an NHL player).
Since insurance would be paying these contracts, would these cases also be susceptible to criminal proceedings regarding fraud outside the confines of the league?

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01-08-2013, 08:30 AM
  #75
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Originally Posted by Ernie View Post
A list of cap-circumventing contracts (with age of player when contract ends).

Kovalchuk - 44
Luongo - 43
Hossa - 42
Weber - 41
Parise - 40
Suter - 40
Keith - 40
Zetterberg - 40
Franzen - 40
(Brad) Richards - 40
Lecavalier - 39
Ehrhoff - 39

Minnesota has it by far the worst - Suter and Parise both have their contracts hit $2m in 2022. They'll likely retire at that point and Minnesota will be carrying their combined $15m cap hit for 3 years.
Am I the only one who thinks most of these guys plan on playing those final years of their contracts? It seems like a lot of players have a rough time retiring as it is but to do it while leaving money on the table too? You'd have to think they'd still be lacing them up to help the team in whatever capacity they could manage at that age.

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