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Could a team do this (New CBA)

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07-14-2005, 12:02 PM
  #1
Mithras
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Could a team do this (New CBA)

I know this is all speculation until the wording of the CBA comes out, but...

Say a team signs a big big name player. That player on the open market would want the 20% max salary (right now 7+million) for say 3 years (21 million total). Big cap hit right? Say instead that player signs for 6 years at 4 million. AND has a side agreement that the team will buy him out after 3 years (that way the player still gets 21 million for 3 years work). The team has 1.3 million in dead cap space for 3 years after the player leaves, but they save 3 million a year in cap space while the player is playing for them...

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07-14-2005, 12:07 PM
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Quote:
Originally Posted by Mithras
Say a team signs a big big name player. That player on the open market would want the 20% max salary (right now 7+million) for say 3 years (21 million total). Big cap hit right? Say instead that player signs for 6 years at 4 million. AND has a side agreement that the team will buy him out after 3 years (that way the player still gets 21 million for 3 years work). The team has 1.3 million in dead cap space for 3 years after the player leaves, but they save 3 million a year in cap space while the player is playing for them...
I can't see why not.

So you make the deal, 4 years, with a player option of a buy-out of x-dollars after the 3rd. year.

The club does have to include the buy-out in their cap figures for year 4, but sobeit.

I don't think you'd be able to carry forward the buy-out.

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07-14-2005, 12:29 PM
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Mithras
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Iím just thinking of it in a hybrid NFL senario. Money is amortized over the length of the contract wiether or not the contract is played out. Makes the dead money cap hit a little easier to swallow, but over a longer period of time... Still tacking on a year or two that both sides know arnít going to happen could let the team make a bit of a run.

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07-14-2005, 12:36 PM
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Quote:
Originally Posted by Mithras
I know this is all speculation until the wording of the CBA comes out, but...

Say a team signs a big big name player. That player on the open market would want the 20% max salary (right now 7+million) for say 3 years (21 million total). Big cap hit right? Say instead that player signs for 6 years at 4 million. AND has a side agreement that the team will buy him out after 3 years (that way the player still gets 21 million for 3 years work). The team has 1.3 million in dead cap space for 3 years after the player leaves, but they save 3 million a year in cap space while the player is playing for them...
The buyout will count against the cap, mitigating a considerble portion of the advantage gained in such a scenario.

Side deals are presumably not legal and not enforceable.

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07-14-2005, 12:44 PM
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Quote:
Originally Posted by timlap
The buyout will count against the cap, mitigating a considerble portion of the advantage gained in such a scenario.

Side deals are presumably not legal and not enforceable.
The buyout rule in the old cba was that the rate was 2/3 X years ..payable over 2 times the length ..

Under this example here .. $4 mil per and bought out in year 4 ..

2/3 of $4 mil is $2.6 cost then spread over 2 years = $1.3 both $$ and cap space hit as Mithras says ..

So $1.3 dead cap space is not so bad and not a CBA violation..

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07-14-2005, 12:53 PM
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Quote:
Originally Posted by The Messenger
. . .
So $1.3 dead cap space is not so bad and not a CBA violation..
How do we know it's not a CBA violation? We haven't read the document.

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07-14-2005, 12:56 PM
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Quote:
Originally Posted by timlap
How do we know it's not a CBA violation? We haven't read the document.
It might be, but then it would be a violation to ever buy-out a player, so how would that work?

All that is being suggested, is to provide a player option at a certain point in time. The players have an option on the CBA, so it seems reasonable that player options will continue to exist in the new CBA for individual contracts.

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07-14-2005, 01:03 PM
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Quote:
Originally Posted by timlap
How do we know it's not a CBA violation? We haven't read the document.
Not sure I understand your point here ,,

Buyouts have always been allowed in previous CBA's ..

Here you are now taking a Cap hit as a result of the buyout and we have heard they will count against the cap .. That only makes sense really as its money spent ..

If its the wording of the first post that you believe is the problem .. Then that is easily addressed by making year 4 a player option year. Eddie Belfours contract right now says that he receives a $2 mil payout if his option year 3 is not accepted by the team.. The NHL allowed that before this is the same thing here .. The buyout and the payout are that same amount nearly ..

The only thing a good honest GM would then say is "We may buy you out though if you accept it, depending on your level of play at the time. Then when the time arrives you buy him out and its all legal ... IMO

I don't see the problem you are implying here, as the old CBA already had this and it was never a problem before and the only difference now is that you take a Cap hit under the new system .. This is not a perceived loophole ..IMO


Last edited by Mess: 07-15-2005 at 12:41 AM.
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07-14-2005, 01:16 PM
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Quote:
Originally Posted by ULF_55
It might be, but then it would be a violation to ever buy-out a player, so how would that work?
. . .
A pre-arranged buyout may well be (almost certainly is) a violation, if hard to prove.

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07-14-2005, 01:18 PM
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Quote:
Originally Posted by timlap
A pre-arranged buyout may well be (almost certainly is) a violation, if hard to prove.
Not an issue.

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07-14-2005, 01:20 PM
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Quote:
Originally Posted by ULF_55
Not an issue.
To quote the original question: "Say instead that player signs for 6 years at 4 million. AND has a side agreement that the team will buy him out after 3 years (that way the player still gets 21 million for 3 years work)."

That's what I'm talking about.

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07-14-2005, 01:24 PM
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Quote:
Originally Posted by timlap
To quote the original question: "Say instead that player signs for 6 years at 4 million. AND has a side agreement that the team will buy him out after 3 years (that way the player still gets 21 million for 3 years work)."

That's what I'm talking about.
If anyone puts a side agreement in writing they're both cooked and stupid.

All they have to do is give the player the option. That is all the side agreement that is needed.

Why make it complicated?

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07-14-2005, 01:24 PM
  #13
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A pre-arrainged buy-out could be verboten but that doesnít mean that a player and a team canít agree on a deal that pays 2 million for 3 years and then 6 million for the next two... There is no written agreement that the team will or will not choose to play the player after the 3rd year.

All this is is back-ending a contract to have more cap space for a few years and then amortizing the dead money from the cap hit afterwards over a longer period. The NFL (IMHO the best capologists around) do it all the time.

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07-14-2005, 01:31 PM
  #14
timlap
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Quote:
Originally Posted by ULF_55
If anyone puts a side agreement in writing they're both cooked and stupid.

All they have to do is give the player the option. That is all the side agreement that is needed.

Why make it complicated?
No reason. I was just answering to one small point, but it has ballooned to a few posts.

Frankly, I'm still not sure I understand entirely, but I'm slow today.

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07-15-2005, 12:29 AM
  #15
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As soon as the CBA is ratified can you trade players?

Trade Sundin for Weight.

Buy-out Weight, and then go looking for some other player who gets bought out...

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07-15-2005, 12:46 AM
  #16
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Quote:
Originally Posted by ULF_55
As soon as the CBA is ratified can you trade players?

Trade Sundin for Weight.

Buy-out Weight, and then go looking for some other player who gets bought out...
That's an interesting idea. Good thinking.

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07-15-2005, 12:47 AM
  #17
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Quote:
Originally Posted by ULF_55
As soon as the CBA is ratified can you trade players?

Trade Sundin for Weight.

Buy-out Weight, and then go looking for some other player who gets bought out...
I wondered that as well .. I guess it depends on the wording and timimg ..

Apparently these 1 time buyouts in transition rules will happen between July 21-30 after a succesful vote .. Will trades be permitted during that time .. UFA season opens Aug 1st.

Also the wording might include that a traded then bought out player can't return to his old team for a calendar year ..

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07-15-2005, 12:51 AM
  #18
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Quote:
Originally Posted by The Messenger
I wondered that as well .. I guess it depends on the wording and timimg ..

Apparently these 1 time buyouts in transition rules will happen between July 21-30 after a succesful vote .. Will trades be permitted during that time .. UFA season opens Aug 1st.

Also the wording might include that a traded then bought out player can't return to his old team for a calendar year ..
So Sundin, for Weight.
Weight for Holik.
Sundin for Guerin.
Guerin for Holik.

We all buy-out.


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07-15-2005, 12:56 AM
  #19
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Quote:
Originally Posted by ULF_55
So Sundin, for Weight.
Weight for Holik.
Sundin for Guerin.
Guerin for Holik.

We all buy-out.

Well I can tell you one thing its going to be fun once the CBA is posted on the NHL site to see if we can punch holes in it or find loopholes like that.

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