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Re-entry waivers and P. Bonuses

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12-28-2010, 02:18 PM
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Boom King
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Re-entry waivers and P. Bonuses

If a player if claimed on re-entry waivers by another team and then they are subsequently responsible for half his cap hit for the remainder of the contract, what happens in terms of performance bonuses if:
  1. At the end of the season, he achieves some or all of the bonuses. Which team gets hit with the cap hit or is it somehow split between the two clubs?
  2. If at any point in the season, certain bonuses become unattainable, which team gets the payroll credit or again, is it split between the two clubs?

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12-28-2010, 03:40 PM
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kdb209
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Quote:
Originally Posted by Boom King View Post
If a player if claimed on re-entry waivers by another team and then they are subsequently responsible for half his cap hit for the remainder of the contract, what happens in terms of performance bonuses if:
  1. At the end of the season, he achieves some or all of the bonuses. Which team gets hit with the cap hit or is it somehow split between the two clubs?
  2. If at any point in the season, certain bonuses become unattainable, which team gets the payroll credit or again, is it split between the two clubs?
All Performance Bonuses (earned or not) are included in the players cap hit and accrued daily.

Before the trade they would accrue to the old team and after they would accrue to the new team.

What is less clear in the CBA is who actually pays the money for the bonuses - it would likely be whichever team he was on when the bonus was achieved.

So, if a player (hypothetically) had a $1M bonus for 30 goals and was traded from Team A to Team B at the deadline (75% thru the season), has 29 golas for team A and 1 goal for Team B:
- Team A would accrue 75% of the cap hit but pay no $$$
- Team B would accrue 25% of the cap hit but pay all the $$$s

Where things could get interesting (and ugly) are the cases of unearned bonuses and the Performance Bonus Cushion carryovers to the next year.

At the point in time where a bonus becomes impossible to earn, a players team receives a cap credit (their Averaged Club Salary is reduced by) the cash amount of the unearned bonuses. Team A may incur most of the cap hit from the bonus, but Team B would get all of the cap credit - effectively trading cap space.

It's unclear (or at least I'd have to think about it a bit more) what would happen if the bonuses (accrued in Team B's cap hit for only a portion of the season) put Team B over the Upper Limit and into the Performance Bonus Cushion and they pay out all the bonuses - how the carryover to the next year would be calculated.

edit: Now I see the question was Re-Entry Waivers, not trade. It should be similar to above

Team A will accrue the cap hit and pay any bonuses earned before the Waiver claim and Teams A & B will split the accrued cap hits and actual bonus $$$'s paid after the claim.

I would guess that Team B would still get the entire credit for unearned bonuses and each team would handle the PBC carryover independently based on 50% of the bonuses paid.

However, all this is conjecture - since we've seen no case (that I'm aware of) which required this cap calculus to see what the League's interpretation is.


Last edited by kdb209: 12-28-2010 at 03:49 PM.
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12-28-2010, 05:03 PM
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Boom King
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Quote:
Originally Posted by kdb209 View Post
All Performance Bonuses (earned or not) are included in the players cap hit and accrued daily.

Before the trade they would accrue to the old team and after they would accrue to the new team.

What is less clear in the CBA is who actually pays the money for the bonuses - it would likely be whichever team he was on when the bonus was achieved.

So, if a player (hypothetically) had a $1M bonus for 30 goals and was traded from Team A to Team B at the deadline (75% thru the season), has 29 golas for team A and 1 goal for Team B:
- Team A would accrue 75% of the cap hit but pay no $$$
- Team B would accrue 25% of the cap hit but pay all the $$$s

Where things could get interesting (and ugly) are the cases of unearned bonuses and the Performance Bonus Cushion carryovers to the next year.

At the point in time where a bonus becomes impossible to earn, a players team receives a cap credit (their Averaged Club Salary is reduced by) the cash amount of the unearned bonuses. Team A may incur most of the cap hit from the bonus, but Team B would get all of the cap credit - effectively trading cap space.

It's unclear (or at least I'd have to think about it a bit more) what would happen if the bonuses (accrued in Team B's cap hit for only a portion of the season) put Team B over the Upper Limit and into the Performance Bonus Cushion and they pay out all the bonuses - how the carryover to the next year would be calculated.

edit: Now I see the question was Re-Entry Waivers, not trade. It should be similar to above

Team A will accrue the cap hit and pay any bonuses earned before the Waiver claim and Teams A & B will split the accrued cap hits and actual bonus $$$'s paid after the claim.

I would guess that Team B would still get the entire credit for unearned bonuses and each team would handle the PBC carryover independently based on 50% of the bonuses paid.

However, all this is conjecture - since we've seen no case (that I'm aware of) which required this cap calculus to see what the League's interpretation is.
Thanks for your input. Interesting food for thought as this is where the CBA gets a bit murky especially in the situation bolded.

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