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How much value is adding by keeping some of a player's cap hit/salary?

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05-24-2013, 10:36 AM
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joshjull
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How much value is adding by keeping some of a player's cap hit/salary?

I've seen it mentioned a few times that we should hold onto a chunk of either Vanek or Miller's salary in a trade. How much value do you think that can add to a trade? Its hard to say for sure since this concept is new and we have little to go on. But we do have the Pommer trade.

The Sabres are eating 795k of Pommer's cap hit next season and already did a prorated amount of that for last year. Obviously that helped get the deal done but did holding that amount of cap space get us more in the deal? Is it why we get the 2nd in the deal?

I'm curious how much more valuable Vanek or Miller's could be in a trade if we held onto some of the salary/cap hit. As an example how much more valuable is Vanek to a team at roughly 3.6mil as opposed to 7.1mil?



If nothing else it would open up the market for both if we were willing to retain up to 50%.

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05-24-2013, 10:42 AM
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Some of it will be situational. If a team tighter to the cap is interested, to make the deal happen, Buffalo will likely have to retain cap or eat a contract in return. The option of holding salary will broaden the teams available to make a deal since it's no longer fitting the full value. Cap flexibility will allow competitive teams, the ones who are going to be keen on a single year of control, to get in on the bidding. That's where it will make the most difference, in my opinion.

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05-24-2013, 10:45 AM
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Posting the rules re: this just in case some weren't aware of the new language in 2013's CBA...

Quote:
1. The acquiring team must assume at least 50 percent of the remaining salary and cap charge of the SPC.
2. Such a contract can only be traded twice using provision 1 during the lifetime of the SPC.
3. Retained salary by the trading team cannot be more than 15 percent of the upper salary cap limit.
4. A maximum of 3 such contracts with salary retained in a trade can be on a team's books at any one time.

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05-24-2013, 10:48 AM
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Or, more specifically:

Quote:
In the context of Player Trades, participating Clubs will be permitted to allocate the AA and related Salary and Bonus payment obligations between them, subject to specified parameters (“Retained Salary Transaction”). Specifically, the Club trading a Player may agree to retain a percentage of the SPC’s AA and related Salary and Bonus obligations for each of the remaining years of the Player’s SPC, up to 50% of the SPC’s AA.

In each Retained Salary Transaction, the percentage allocation of the retained AA and retained Salary and Bonuses must be the same (i.e., the Salary and Bonus
obligations as between Clubs would be allocated on the same percentage basis as the AA being allocated) and cannot be altered from year to year.

So, for instance, if an assigning Club agrees to retain 30% of an SPC’s AA over the balance of its term, it will also retain an obligation to reimburse the acquiring Club 30% of the Player’s contractual compensation (Salary and Bonuses) in each of the remaining years of the contract. A Club may have up to a maximum of three (3) SPCs on its Cap per League Year as to which a portion of the AA and Salary have been retained in a Player Trade, provided, however, that the aggregate amount of AA retained by a Club does not exceed 15% of the Upper Limit (e.g., 15% of $70.2 million or $10.53 million in Year 1; 15% of $64.3 million or $9.645 million in Year 2; or $12 million if the Upper Limit equals $80.0 million) in the aggregate for all such contracts in any one year.

An SPC can be subject to a Retained Salary Transaction up to a maximum of two (2) times. The NHL shall promptly disclose the amount of Retained Salary and Bonus obligations in every Retained Salary Transaction to the NHLPA.

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05-24-2013, 10:57 AM
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joshjull
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Thanks Jbuds.

I would point out that we can take on up to 50% of both Vanek and Miller's salaries and would be compliant with the new rules.

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05-24-2013, 01:29 PM
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Quote:
Originally Posted by Chainshot View Post
Some of it will be situational. If a team tighter to the cap is interested, to make the deal happen, Buffalo will likely have to retain cap or eat a contract in return. The option of holding salary will broaden the teams available to make a deal since it's no longer fitting the full value. Cap flexibility will allow competitive teams, the ones who are going to be keen on a single year of control, to get in on the bidding. That's where it will make the most difference, in my opinion.
Agreed. In Vanek and Miller's case the 50% rule helps mostly with adding more teams to the mix who are otherwise cap stricken. If a player has multiple years left like Pominville(or Stafford and Leino) then it does add value to that player. Basically, a player can go from overpaid with one team to underpaid. It looks like we picked a good time to rebuild since we have the money and the cap space to utilize this rule to its max potential.

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05-24-2013, 02:05 PM
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Here's a thought:
Maybe would could convince Vanek to agree to a one year extension with a provision on a semi-NTC. The semi-NTC could be something like Vanek chooses 8 teams he would like to go to or vice versa, 8 teams he wouldn't want to go to. We add value to his stock and meanwhile, he has some control over where he goes this year. Who wouldn't want 2 years of Vanek at a cap/salary price of 3.6m? If Vanek wants to do 3 or maybe even 4 years, I would be fine with that too.

Edit: I don't know if this is possible per the new CBA. Per section 11 and 26 it is but there's a lot of existing rules they don't outline in PDF.

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05-24-2013, 02:14 PM
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Quote:
Originally Posted by JLewyB View Post
Here's a thought:
Maybe would could convince Vanek to agree to a one year extension with a provision on a semi-NTC. The semi-NTC could be something like Vanek chooses 8 teams he would like to go to or vice versa, 8 teams he wouldn't want to go to. We add value to his stock and meanwhile, he has some control over where he goes this year. Who wouldn't want 2 years of Vanek at a cap/salary price of 3.6m? If Vanek wants to do 3 or maybe even 4 years, I would be fine with that too.

Edit: I don't know if this is possible per the new CBA. Per section 11 and 26 it is but there's a lot of existing rules they don't outline in PDF.
Another though on this. Getting Vanek to sign the extension would be the hardest part of this equation. So lets say we overpay Vanek on an extension, for giggles lets say 2yrs for 18m. With his 7.1m for this year thats an average salary of 8.36 a year. By retaining 50%, the other team only has to take on 4.18m in cap/sal a year. Vanek's still a underpaid for the trade partner. Retaining salary/cap should be a non-issue for us for next 2 years. Along with NTC, Vanek is getting 9 MILLION A YEAR in 14 and 15, how could he pass that up?

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05-24-2013, 02:50 PM
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Just a guess, but I say $3M is worth a 2nd round draft pick.

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05-24-2013, 05:29 PM
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I feel like generally speaking, it's worth about a 2nd on a $4m or higher contract. That is to say if you had an offer amenable to both sides and then decided to do the 50% retention, the pot would likely sweeten to the tune of a 2nd in most cases. There's not much to base this on, it merely feels right at this juncture.

As to specific trades it would sometimes be the difference between the traded even happening or not, or the inclusion of worthwhile return (e.g. high-end prospect) or not.

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