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Combining Salary Retention with Cap Recapture

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Old
01-12-2013, 03:52 PM
  #1
BaseballCoach
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Combining Salary Retention with Cap Recapture

EDIT: It seems that the way I have described the situation below is indeed the way the MOU describes it.



The question has come up about a guy like Luongo being traded and not finishing his career. Then suppose Vancouver took on some of his salary an cap. How would the recapture work?

If things are logical, I believe the original team will get MORE of the recapture, as they should, since they are agreeing to take part of the cap hit for the acquiring team.

Take a contract that goes like this
10-10-10-7-7-5-5-1-1-1
Total dollars committed 57, cap hit 5.7

Say the guy plays for Team-1 for 2 years, and Team-2 for 5 years, and suppose that Team-1 retained 20% of remaining salary and cap hit. Then, this is what I think SHOULD happen.

First let us look at what happens if there is no salary/cap retention in the trade.

Team-1 gets a frozen cap recapture of $8.6M, because they paid $20M and had a cap hit of $11.4M, over two years.
For the first five years after the trade, Team 2 paid $34M and got hit with cap of $28.5M, so they have a cumulative recapture of $5.5M.

Now the player retires, three years early. Team-1 will have a cap adjustment of $2.867M for each of three years, while Team-2 will have a cap adjustment of $1.833M for each of three years.

Let us now add the 20% retention clause.

Team-1 has now paid the following
10-10-2-1.4-1.4-1-1 for a Total $26.8M
and has absorbed cap hits of
5.7-5.7.-1.14-1.14-1.14-1.14-1.14 for a Total $17.1M

Team-1 now has a cap recapture of $9.7, which is $1.1M more than they had in the first case, which is correct, since $1.1M is 20% of the $5.5M recapture that Team-2 would have had.

Team-2 has now paid the following
8-5.6-5.6-4-4 for a Total $27.2M
and has absorbed cap hits of
4.56 x 5 for a Total $22.8M

Team-2 now has a cap recapture of $4.4M, which is $1.1M less than they had in the first case, which is correct, since $1.1M is 20% of the $5.5M recapture that Team-2 would have had.

Does anyone know if this is how it would work under the actual terms of the CBA?


Last edited by BaseballCoach: 01-13-2013 at 08:07 AM. Reason: MOU terms are released
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Old
01-12-2013, 04:11 PM
  #2
ScottFC
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Quote:
Originally Posted by BaseballCoach View Post
The question has come up about a guy like Luongo being traded and not finishing his career. Then suppose Vancouver took on some of his salary an cap. How would the recapture work?

If things are logical, I believe the original team will get MORE of the recapture, as they should, since they are agreeing to take part of the cap hit for the acquiring team.

Take a contract that goes like this
10-10-10-7-7-5-5-1-1-1
Total dollars committed 57, cap hit 5.7

Say the guy plays for Team-1 for 2 years, and Team-2 for 5 years, and suppose that Team-1 retained 20% of remaining salary and cap hit. Then, this is what I think SHOULD happen.

First let us look at what happens if there is no salary/cap retention in the trade.

Team-1 gets a frozen cap recapture of $8.6M, because they paid $20M and had a cap hit of $11.4M, over two years.
For the first five years after the trade, Team 2 paid $34M and got hit with cap of $28.5M, so they have a cumulative recapture of $5.5M.

Now the player retires, three years early. Team-1 will have a cap adjustment of $2.867M for each of three years, while Team-2 will have a cap adjustment of $1.833M for each of three years.

Let us now add the 20% retention clause.

Team-1 has now paid the following
10-10-2-1.4-1.4-1-1 for a Total $26.8M
and has absorbed cap hits of
5.7-5.7.-1.14-1.14-1.14-1.14-1.14 for a Total $17.1M

Team-1 now has a cap recapture of $9.7, which is $1.1M more than they had in the first case, which is correct, since $1.1M is 20% of the $5.5M recapture that Team-2 would have had.

Team-2 has now paid the following
8-5.6-5.6-4-4 for a Total $27.2M
and has absorbed cap hits of
4.56 x 5 for a Total $22.8M

Team-2 now has a cap recapture of $4.4M, which is $1.1M less than they had in the first case, which is correct, since $1.1M is 20% of the $5.5M recapture that Team-2 would have had.

Does anyone know if this is how it would work under the actual terms of the CBA?
From what I took from the CBA Team 1 can agree to keep up to 50% of the cap

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Old
01-13-2013, 07:25 AM
  #3
baldrick
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I'm sick to death of CBA/salary cap data. Drop the puck already!

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