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Cap Recapture & its potential impact

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05-26-2013, 09:06 PM
  #1
BillyShoe1721
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Cap Recapture & its potential impact

Quote:
BOSTON — All these months later, it still is baffling that the NHLPA did not take a stand against the NHL’s insistence on applying the punitive cap-recapture provision of the collective bargaining agreement to contracts that already had been registered.

Because if Brad Richards is bought out next month and Marian Hossa is bought out following either this year or next, the cap-recapture will be among the primary reasons management would have felt compelled to act.

The final three seasons of Richards’ nine-year, $60 million front-loaded deal are worth $1 millior per. Under the cap-recapture formula that was among Brian Burke’s pet projects, if Richards were to retire with three seasons remaining on his deal, the Rangers would be hit with a dead-space charge of $5.667 million per.

If he were retire with two seasons remaining on the contract, the charge would be $8.5 million per. And, counterintuitively, if he were to play all but the final season of his deal, the Rangers would be hit with an untenable charge of $17 million for 2019-20.
http://www.nypost.com/p/sports/more_...DeRrV2GCHu1uCO

I had no idea that this policy existed. One of the few times I feel that Brooks is completely right. Could this force the hand of the Blackhawks and the Rangers?


MOD: Extensive coverage in CBA/Questions stickied thread including this article: http://hfboards.hockeysfuture.com/sh....php?t=1317097


Last edited by LadyStanley: 05-27-2013 at 04:37 PM.
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05-26-2013, 09:16 PM
  #2
frankthefrowner
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I had made this point about Hossa to my father and he was like no way Hossa is still really good. But the Hawks almost have to Amnesty him and why i found it comical that the talking heads on the NHL XM channel were like no way theyll give richards another shot, they literally cannot wait!

Oh and Yes by all means Buy Out richards Spend his money on Hossa for 3 or 4 years.


Last edited by frankthefrowner: 05-26-2013 at 09:21 PM.
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05-26-2013, 09:22 PM
  #3
Vankiller Whale
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I made this post a short while back in the BOH section. TL; DR: It makes no sense why the league doesn't count seasons where cap hit exceeds actual salary as a deduction from the amount the team is penalized when the player is retired.

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Originally Posted by Vankiller Whale View Post
Now, I don't often venture into the BoH section, however, when looking at some of the details of Luongo's contract and the cap recapture clause in the new CBA, I noticed the following on capgeek:

Quote:
Teams do not receive a credit for seasons with negative cap benefit (where cap hit exceeds salary), the league confirmed to CapGeek.com.
http://capgeek.com/new-cba/

What this means is that, taking Luongo as an example, every year he plays where his salary is greater than his cap hit, that will be taken into account if he retires early(for most of his contract, it's 6.7 mil salary to 5.3 mil cap hit.) The sum of all the cap circumvented is about 14.3 mil. After this point(2018), Luongo's salary significantly drops off.

However, whenever his salary is less than his cap hit, the difference is not subtracted from the calculated circumvention amount.

So suppose a team trades for Luongo this offseason. If Luongo were to retire in 2019, instead of having a 1.65 mil cap penalty per year for three years, the team that traded for him would have a 2.3 mil cap penalty for 3 years. And if Luongo plays until 2020, due to the circumvented cap being distributed over two years instead of three, the team that traded for him will be hit with a 3.45 mil cap penalty for 2 years, instead of just 309k per year.

And if Luongo were to retire the year before his contract ends, the team that traded for him would be hit with a whopping 6.9 mil cap penalty for one year, despite the actual amount of cap circumvention done by that team having come to a grand total of -3.714 mil(yes, negative!). So the team would be enormously penalized for the player playing out more of his contract, while actually reducing the amount of cap circumvention that would have occurred under the previous CBA.

And what's even more absurd is, supposing a player is not traded during the duration of his contract, taking Luongo as an example, if he were to retire 2 years before his contract ends, the cap penalty would be 7.17 mil per year, and one year before, the absurd sum of 14.333 mil in cap penalties for the year. It would essentially save enormous amounts of cap space for him not to retire then and instead continue playing, as his cap hit is only 5.333 mil.

To me this makes no sense. If the goal is to recapture any cap circumvented, then whenever the player's salary is less than his cap hit, it should count against the cap benefited. Otherwise you end up with all sorts of absurd scenarios like the ones I described. I don't know if the league can amend the rule, as otherwise me might end up seeing some very strange scenarios within the next 10 years.
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Originally Posted by Vankiller Whale View Post
Of course, were Kovalchuk to retire this year, the 4.33 mil cap hit would be spread out over the remainder of his term, so it would amount to a paltry 361k per year, albeit for 12 years.

Hypothetically, if Kovalchuk were to retire a year before his contract ended, the Devils would be hit for over 27m in cap penalties for a single year. If it were 2 years before, and it would be 13.6m per year for 2 years. And so on.

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05-27-2013, 12:04 AM
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LetsGoIslanders
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Larry Brooks/Glen Sather Syndrome

As an Islander fan I can't support Larry Brooks' whine about the salary cap enough. Keep spending Rangers! Buy more players, trade more assets for big money guys. Brad Richards was supposed to be the savior. Rick Nash was the next savior.

What a disaster the Ranger are. And the Ranger media hacks, led by Brooks, keep on selling the buy, buy, buy, trade, trade, trade mantra. Meanwhile the only producers on the team are the draftees. If it wasn't for Henrik, and had the Rangers had an average goaltender in goal, they'd be 10th (at best) in the Conference.


Last edited by Kane One: 05-27-2013 at 02:37 AM.
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05-27-2013, 01:46 AM
  #5
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pretty sure all that would happen in these instances is the teams would pay the players their money even if they didnt actually play, thus they wouldnt be "retried"... most likely they would just be a permascratch in the AHL who would never be suspended even though they wouldnt report... costs the AHL team a dead roster spot but that isnt a big deal.

the theory behind the rule is sound... intends to punish teams harshly if they try to pull off the "wink-wink-nudge-nudge" part of these deals..

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05-27-2013, 02:34 AM
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Kane One
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Quote:
Originally Posted by LetsGoIslanders View Post
As an Islander fan I can't support Larry Brooks' whine about the salary cap enough. Keep spending Rangers! Buy more players, trade more assets for big money guys. Brad Richards was supposed to be the savior. Rick Nash was the next savior.

What a disaster the Ranger are. And the Ranger media hacks, led by Brooks, keep on selling the buy, buy, buy, trade, trade, trade mantra. Meanwhile the only producers on the team are the draftees. If it wasn't for Henrik, and had the Rangers had an average goaltender in goal, they'd be 10th (at best) in the Conference.
Okay, and they do have Lundqvist. Where would the Islanders be without Tavares? How would every team be without their best player?

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05-27-2013, 03:33 PM
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its such a ridiculous part of the new cba. teams will have to buy out players in the next year that have players signed to long term contracts because the cap hit risk is astronomical. brad richards will have earned his buyout with **** play but players like zetterberg or weber could have cap hits of 10+m for not playing if they retire a year or 2 before the ends of their contracts. you can't buyout those players now as they are top players, but the organizations will most likely struggle to not be bottom dwellers with so much dead cap space by the end of those signed contracts.

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05-27-2013, 03:39 PM
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Butch 19
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Quote:
Originally Posted by ecemleafs View Post
its such a ridiculous part of the new cba. teams will have to buy out players in the next year that have players signed to long term contracts because the cap hit risk is astronomical. brad richards will have earned his buyout with **** play but players like zetterberg or weber could have cap hits of 10+m for not playing if they retire a year or 2 before the ends of their contracts. you can't buyout those players now as they are top players, but the organizations will most likely struggle to not be bottom dwellers with so much dead cap space by the end of those signed contracts.
hmmm, 28 other teams don't seem to have this "problem."

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05-27-2013, 03:42 PM
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ecemleafs
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Quote:
Originally Posted by Butch 19 View Post
hmmm, 28 other teams don't seem to have this "problem."
i only pointed out 2 names. there are a few others.

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05-27-2013, 04:19 PM
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Vankiller Whale
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Quote:
Originally Posted by Butch 19 View Post
hmmm, 28 other teams don't seem to have this "problem."
Well, let's see:

NYR: Richards
Nashville: Weber
Detroit: Zetterberg/Franzen
New Jersey: Kovalchuk
Chicago: Hossa
Vancouver: Luongo
Tampa Bay: Lecavalier
Minnesota: Suter/Parise
Buffalo: Ehrhoff

etc.

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05-27-2013, 05:09 PM
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tempest2i
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At this point it certainly looks like a severe way to punish teams that went against the intent of the last CBA.

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05-27-2013, 05:12 PM
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Kane One
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Quote:
Originally Posted by tempest2i View Post
At this point it certainly looks like a severe way to punish teams that went against the intent of the last CBA.
But they clarified their rule in the last CBA and still decided to punish the teams, which is complete ********. Not only that, they allowed the Flyers to not be punished with this cap benefit recapture with Mike Richards and Carter if they retire. Their reasoning for not punishing the Flyers is the same reason why this rule shouldn't even exist.

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05-27-2013, 05:49 PM
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So, just curioius, along these lines, what is the cap going to be next year? Has it been confirmed?

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05-27-2013, 09:49 PM
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tempest2i
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Quote:
Originally Posted by Parker McDonald View Post
But they clarified their rule in the last CBA and still decided to punish the teams, which is complete ********. Not only that, they allowed the Flyers to not be punished with this cap benefit recapture with Mike Richards and Carter if they retire. Their reasoning for not punishing the Flyers is the same reason why this rule shouldn't even exist.
The Flyers never gained any cap advantage with Carter. Primarily because Carter never played a game for the Flyers with that contract. I'm not sure how you punish the Flyers for that.

Richards played 3 season on his contract with the Flyers. During the first and second seasons his salary was less than is cap hit (350k and 150k, respectively), then in his third season his salary was 650k more than his cap.

So I think you have a grip with Richards. The Flyers should totally be on the hook for the 650k cap gained while he was a flyer, spread over the years that he doesn't play.

As for Carter, I don't see any reason the Flyers should pay any cap penalty for a contract they never gained any cap advantage from.

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05-27-2013, 09:55 PM
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Kane One
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Quote:
Originally Posted by tempest2i View Post
The Flyers never gained any cap advantage with Carter. Primarily because Carter never played a game for the Flyers with that contract. I'm not sure how you punish the Flyers for that.

Richards played 3 season on his contract with the Flyers. During the first and second seasons his salary was less than is cap hit (350k and 150k, respectively), then in his third season his salary was 650k more than his cap.

So I think you have a grip with Richards. The Flyers should totally be on the hook for the 650k cap gained while he was a flyer, spread over the years that he doesn't play.

As for Carter, I don't see any reason the Flyers should pay any cap penalty for a contract they never gained any cap advantage from.
Ah, that was my mistake. I didn't realize their contracts weren't front-loaded.

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05-27-2013, 10:09 PM
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Quote:
Originally Posted by BLONG7 View Post
So, just curioius, along these lines, what is the cap going to be next year? Has it been confirmed?

The sticky section on the CBA has some of this info, from the OP by Crease:
Salary Cap
Y1: 60M ceiling but teams can spend up to $70.2M, 44M floor
Y2: 64.3M ceiling, 44M floor

Y3 - Y10: Midpoint is equal [(.50 x HRR) - 100M] / 30
Cap ceiling/floor calculated as 15% away from Midpoint, to a minimum of 8M and maximum of 14M
Ceiling may not drop below 64.3M.

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05-27-2013, 10:11 PM
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Quote:
Originally Posted by BLONG7 View Post
So, just curioius, along these lines, what is the cap going to be next year? Has it been confirmed?
64.3M. It was a negotiated part of the CBA.

Quote:
Originally Posted by PredsV82 View Post
pretty sure all that would happen in these instances is the teams would pay the players their money even if they didnt actually play, thus they wouldnt be "retried"... most likely they would just be a permascratch in the AHL who would never be suspended even though they wouldnt report... costs the AHL team a dead roster spot but that isnt a big deal.

the theory behind the rule is sound... intends to punish teams harshly if they try to pull off the "wink-wink-nudge-nudge" part of these deals..
There would still be a cap hit from them even in the AHL. Under the new CBA, any player in the AHL with a cap hit that exceeds (NHL minimum + $375K) has the excess counted against the cap.

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05-27-2013, 10:23 PM
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Quote:
Originally Posted by tempest2i View Post
At this point it certainly looks like a severe way to punish teams that went against the intent of the last CBA.
Teams knew that Bettman didn't like those kinds of deals and that he only needed eight owners to side with him to pass a new CBA.

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05-27-2013, 11:17 PM
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Quote:
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Teams knew that Bettman didn't like those kinds of deals and that he only needed eight owners to side with him to pass a new CBA.
No doubt, I have no sympathy for any team that signs a player to a contract the team/player/both have no intention on fulfilling.

I've said it before, so I don't want to be a broke record here, but I fully expect any teams facing these recapture penalties to simply place the player on LTIR instead of allowing the player to retire.

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05-27-2013, 11:28 PM
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Originally Posted by tempest2i View Post
I've said it before, so I don't want to be a broke record here, but I fully expect any teams facing these recapture penalties to simply place the player on LTIR instead of allowing the player to retire.
And absent any clearly identifiable injury, I expect the League to review any such attempt, including review by an independent physician (a la Mogilney).

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05-27-2013, 11:39 PM
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I doubt Chicago could even use an amnesty buyout on Hossa. I can't see him making it through waivers.

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05-28-2013, 12:11 AM
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I doubt Chicago could even use an amnesty buyout on Hossa. I can't see him making it through waivers.

If teams really are worried about the implications of the cap recapture clause, then none of them should want to take on the contract as is. I suppose that would be the litmus test on whether or not the potential for being penalized due to an early retirement is truly off-putting.

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05-28-2013, 12:42 AM
  #23
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Quote:
Originally Posted by BillyShoe1721 View Post
From the article:
Quote:
Now you might believe this is what these teams deserve after signing players to deals they might never have contemplated completing. Lets not even revisit the Ilya Kovalchuk matter. But the fact is the league approved and registered every one of these contracts, the players who signed them are in relative jeopardy and the teams that signed them could face significant hardship.
Teams have players who should have a cap hit of $7-8 million, with a cap hit of a mere $5-6 million, meaning $2-3 million annually in cap savings. That's the cost of a solid third liner. But, you know, "significant hardship."

All this rule does is make teams that should be paying now, pay later.

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05-28-2013, 01:03 AM
  #24
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Quote:
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I doubt Chicago could even use an amnesty buyout on Hossa. I can't see him making it through waivers.
No chance Hossa passes waivers - Chicago is already covering most of the cap to recapture.

I'm confident that Luongo wouldn't pass waivers, and he's the player most often slammed for the lifetime contract. All of the players given those contracts are elite players signed to below value cap hits.

Also....the Devils should be exempt from the cap recapture, or from forfeiting the draft pick. Double punishing them is stupid.

It's worth noting that most of these players have contracts lasting past the end of this CBA. Maybe the GMs have an unofficial agreement to make a deal allowing amnesty buyouts after the end of this CBA so they can buy out the recapture contracts when the value is much lower?

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05-28-2013, 08:20 AM
  #25
tempest2i
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And absent any clearly identifiable injury, I expect the League to review any such attempt, including review by an independent physician (a la Mogilney).
Concussions.

All the player has to say is "I always have constant headaches." No independent physician will ever clear that player to play again.

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