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Bonus payments to older players.

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08-05-2005, 09:16 AM
  #1
AH
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Bonus payments to older players.

Does anyone have more info on the bonus payment plan for guys 35 or older / have spent 100 days on the DL ?

I heard that teams can go over the cap by a certain % and not have that money count towards the cap for the current season. However, that amount will count towards the cap of the ensuing season ... Is this true?

Thanks ...

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08-05-2005, 12:45 PM
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kdb209
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Quote:
Originally Posted by AH
Does anyone have more info on the bonus payment plan for guys 35 or older / have spent 100 days on the DL ?

I heard that teams can go over the cap by a certain % and not have that money count towards the cap for the current season. However, that amount will count towards the cap of the ensuing season ... Is this true?

Thanks ...
It's so damn frustrating that they wont release the whole CBA so we would know these answers for sure, rather than the endless speculation that goes on on this board.

There was speculation pre-CBA agreement that somehow performance bonuses might be treated like the NFL, where some bonus money counts against the next years cap.

Since the agreement, I have seen no indication that that indeed is the case. In fact the CBA FAQ strongly implies that all bonus money counts against the current years cap.

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08-05-2005, 01:08 PM
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Roman Tanner
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Quote:
Originally Posted by AH
Does anyone have more info on the bonus payment plan for guys 35 or older / have spent 100 days on the DL ?

I heard that teams can go over the cap by a certain % and not have that money count towards the cap for the current season. However, that amount will count towards the cap of the ensuing season ... Is this true?

Thanks ...
PERFORMANCE BONUSES (from tsn.ca)

What players may earn in performance bonuses?

Performance bonuses will only be permissible for the following types of players: (1) players on entry-level contracts; (2) players signing one-year contracts after returning from long-term injuries (players with 400 or more games who spent 100 or more days on injured reserve in the last year of their most recent contract); and senior veteran players who sign a one-year contract after the age of 35.


Bonuses will count against next years cap. You don't know if someone reaches their bonus until the year is over.

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08-05-2005, 02:05 PM
  #4
kdb209
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Quote:
Originally Posted by Roman Tanner
PERFORMANCE BONUSES (from tsn.ca)

What players may earn in performance bonuses?

Performance bonuses will only be permissible for the following types of players: (1) players on entry-level contracts; (2) players signing one-year contracts after returning from long-term injuries (players with 400 or more games who spent 100 or more days on injured reserve in the last year of their most recent contract); and senior veteran players who sign a one-year contract after the age of 35.


Bonuses will count against next years cap. You don't know if someone reaches their bonus until the year is over.
Please be clear. The "Bonuses will count against next years cap" line did NOT come from tsn.ca (actually all TSN did was copy the NHL CBA FAQ). That was your interpretation.

I disagree. It is just as (or more) likely that bonuses (whether they are achieved are not) will count against the current years cap - ie a team will have to leave cap room to handle the case where all bonuses are achieved.

That same CBA FAQ is pretty clear - if you pay the bonus $'s this year, they count against the cap this year.

Quote:
CLUB PAYROLLS

What will be the range of Club payrolls?

The payroll range in Year One (2005-06) of the CBA will be $21.5 million (U.S.) at the lower limit and $39 million (U.S.) at the upper limit. A Club's payroll will include all salaries, signing bonuses and performance bonuses paid to players. Except in the case of bona fide long-term injury (injuries that sideline a player for a minimum of 24 days and 10 games) to one or more of a club’s players, Club payrolls will never be permitted to be below the minimum or in excess of the maximum. Clubs at or near the upper limit that have players who incur a bona fide long-term injury will be entitled to replace up to the full value of the injured player's NHL salary (even if such salary would result in the club's team salary exceeding the upper limit). The "replacement salary" will not count against the club's upper limit but will count against the League-wide players' share. Upon return of the injured player, the team must come into immediate compliance with the requirements of the payroll range.
I suppose it might be possible that bonuses could be explicitly written into a contract so as to be an escalator of the next years salary, but performance bonuses seem to be limited to only ELS contracts (with specific guidelines on what type of bonuses are eligible) and 1 yr deals for vets and IR players.

IIRC, there were comments from the Caps GM stating that bonuses offered would count against the cap in the current year.

Also notice that the two most significant ELS contracts signed so far (Carter and Richards) contained NO performance bonueses whatsoever (except fro the standard league payed schedule B ones).

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08-05-2005, 02:12 PM
  #5
Sens4Cup
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Quote:
Originally Posted by AH
Does anyone have more info on the bonus payment plan for guys 35 or older / have spent 100 days on the DL ?

I heard that teams can go over the cap by a certain % and not have that money count towards the cap for the current season. However, that amount will count towards the cap of the ensuing season ... Is this true?

Thanks ...
This is just an aside, but I believe that for any contracts signed before the lockout, that any performance bonuses do not count against the cap in any way. So teams needn't worry about the big rookie bonuses for contracts like Fleury's or Phaneuf's, and teams like Ottawa don't need to worry about Hasek's bonuses for playoff performance.

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08-05-2005, 02:37 PM
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Quote:
Originally Posted by Sens4Cup
This is just an aside, but I believe that for any contracts signed before the lockout, that any performance bonuses do not count against the cap in any way. So teams needn't worry about the big rookie bonuses for contracts like Fleury's or Phaneuf's, and teams like Ottawa don't need to worry about Hasek's bonuses for playoff performance.
I don't know why you beleive that.

I have seen nothing to indicate that any existing performance bonuses will not count against the cap. In fact the league has been pretty crystal clear - all money paid to players (salary, signing bonuses, and performance bonuses) count against the cap.

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08-05-2005, 07:01 PM
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I listened to Gord Kirke on PTS tonight. He is an agent. He has read the CBA.

Bonuses count against the cap.

Plus, any reasonable exercise of reading comprehension of the CBA FAQ makes it crystal clear that it is the case.

Wishful thinking ...

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08-05-2005, 09:18 PM
  #8
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The veterans over 35 on 1 year contracts is an intersting one. If their bonuses count against this years cap, then so what? THe season over by the time they have earned their bonuses. Wouldnt the players just then cover it out of escrow. Bad for players, but wont make much difference to fans. Might lead to some interesting possible decisions for acquiring veteran missing pieces.

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08-06-2005, 11:20 AM
  #9
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I was listening to Gordon Kirke on PTS about this point, and I still do not understand why people still differentiate the treatment of bonuses.

His explanation of an Allison contract was that for most contracts that have bonuses (ie entry levels), the bonuses count against the cap right away whether they are earned or not. For a veteran/ex-injury contract, the bonuses count only as they are earned. But the point is THEY DO STILL COUNT AGAINST THE CAP ONCE THEY ARE EARNED. This is form a guy who has a CBA and has read it (mostly).

Here is the problem, though. If you give an Allison an incentive-laden contract, and yet the rule is that you can not go over the cap, a team like the Leafs still have to protect themselves from going over the cap in the eventuality that Allison hits his bonuses. Accordingly, they have to consider that he will hit the bonuses.

An example.

Allison has a contract for a base of $1.5 mil. His bonuses are $100k for every 10 games played, $1 mil for 20 goals, $1 mil for 40 goals, $1 mil for 40 assists. Total potential compensation = $5.3 mil.

If the Leafs fill out their roster and wind up with $36 mil in other salaries, their base payroll is $37.5 mil (with Allison's base salary). If he hits his bonuses, their payroll is over the cap ($37.5 + $3.8 in bonuses).

On this basis, the Leafs have to make a calculated guess as to how many bonuses an Allison will make. If they want to avoid the disaster of having to cut a guy in mid-season to get under the cap, they may need to be prudent and make sure they have the room. As the seaosn progresses and Allison's performance starts to become apparent, they can then consider adding salary at THAT time.

THe point is, however, that at the outset the Leafs have to consider those bonuses as fully committed and the cap room as used up for those bonuses. Thus at the end of the day the bonuses do effectively count against the cap (at least at the season start).

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08-06-2005, 11:51 AM
  #10
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Thanks for the xplanation GS, but where dioes this rumour about the bonus money counting against the ensuing year's cap come from ? And what is this about teams being allowed to be 7.5% over the cap on bonus money?

God, I hate this crap.

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08-06-2005, 08:40 PM
  #11
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Quote:
Originally Posted by AH
Thanks for the xplanation GS, but where dioes this rumour about the bonus money counting against the ensuing year's cap come from ? And what is this about teams being allowed to be 7.5% over the cap on bonus money?

God, I hate this crap.
I think all the next years cap crap came from pre-CBA specualtion and comparisons with what the NFL does. In the NFL, Not Likely To Be Earned bonues which are achieved count against the next years cap. Likely To Be Earned bonuses count against the current years cap whether they are earned or not - if they aren't hit, the team gets a cap rebate the next year.

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08-06-2005, 10:00 PM
  #12
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Quote:
Originally Posted by kdb209
I think all the next years cap crap came from pre-CBA specualtion and comparisons with what the NFL does. In the NFL, Not Likely To Be Earned bonues which are achieved count against the next years cap. Likely To Be Earned bonuses count against the current years cap whether they are earned or not - if they aren't hit, the team gets a cap rebate the next year.
What he said.

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