HFBoards

Go Back   HFBoards > General Hockey Discussion > The Business of Hockey
Mobile Hockey's Future Become a Sponsor Site Rules Support Forum vBookie Page 2
The Business of Hockey Discuss the financial and business aspects of the NHL. Topics may include the CBA, work stoppages, broadcast contracts, franchise sales, and NHL revenues.

Small question: negative cap hit on buyout

Reply
 
Thread Tools
Old
12-27-2010, 09:59 PM
  #1
ocarina
Registered User
 
Join Date: May 2009
Posts: 1,417
vCash: 500
Small question: negative cap hit on buyout

I was fooling around on capgeek's buyout calculator, and I noticed that if Kovalchuk was theoretically bought out after this season, he would have a six year stretch where the cap hit is negative.

My question is, would that negative cap hit give New Jersey extra cap room by the amount of the (negative) cap hit? Or would the cap hit just be treated as nil, and effectively be zero?

I think I saw a similar situation occur when Patrick Eaves was bought out a few years back.

ocarina is offline   Reply With Quote
Old
12-28-2010, 02:16 AM
  #2
kdb209
Global Moderator
 
kdb209's Avatar
 
Join Date: Jan 2005
Posts: 12,637
vCash: 500
A Buyout can give a player a real negative cap hit - ie give his team extra cap room.

The Buyout calculation pays back dollar-for-dollar any cap benefit (or penalty) accrued before the buyout due to frontloading (or backloading) over the remaining term of the original contract.

It a contract is sufficiently backloaded it is possible for the Buyout cap hit calculation to become negative - effectively a cap credit. There is an example of such a case in the CBA.

edit: C & P from a previous buyout thread.

Quote:
Originally Posted by kdb209
Calculating the Buyout Payments are pretty straight forward - the Buyout Cap Hits are a bit more complicated.

The Buyout Payment is just 2/3 of the remaining salary (1/3 if the player is < 26 yo) spread out over 2x the remaining term.

To calculate the Buyout Cap Hit:

- For the remaining term of the SPC you take the players original cap hit and deduct the Buyout Savings (his original salary minus the Buyout Payment).

- For the years which extend past the term of the SPC, the cap hit is just the Buyout Payment.

It is possible that the Buyout Savings will be greater than the original cap hit - giving an effective negative cap hit.

PHP Code:
SEASON      ACTUAL SALARY      CAP HIT      BUYOUT      SAVINGS      BUYOUT CAP HIT
2010
-2011    $5,500,000    $4,000,000    $1,416,667    $4,083,333    $-83,333
2011
-2012    $5,000,000    $4,000,000    $1,416,667    $3,583,333    $416,667
2012
-2013    $3,500,000    $4,000,000    $1,416,667    $2,083,333    $1,916,667
2013
-2014    $3,000,000    $4,000,000    $1,416,667    $1,583,333    $2,416,667
2014
-2015    $0    $0    $1,416,667    $-1,416,667    $1,416,667
2015
-2016    $0    $0    $1,416,667    $-1,416,667    $1,416,667
2016
-2017    $0    $0    $1,416,667    $-1,416,667    $1,416,667
2017
-2018    $0    $0    $1,416,667    $-1,416,667    $1,416,667


TEXT CAP HIT BREAKDOWN 
(for copying and pasting)

TOM GILBERT BUYOUT FROM CAPGEEK.COM
2010
-2011: $-83,333
2011
-2012: $416,667
2012
-2013: $1,916,667
2013
-2014: $2,416,667
2014
-2015: $1,416,667
2015
-2016: $1,416,667
2016
-2017: $1,416,667
2017
-2018: $1,416,667 
edit 2: Just for Yuks - here is the Capgeek Buyout Calculator for Kovy:

PHP Code:
Ilya Kovalchuk is 28 years old on the buyout date of June 152011putting the total buyout cost at $62,666,667 spread over 28 yearsHis contract was originally valued at $100,000,000 with an annual cap hit of $6,666,667 beginning in 2010 and ending in 2025. The following is a season-by-season breakdown of the buyoutA negative buyout cap hit number indicates a credit.

Season      Actual Salary      Cap Hit      Buyout      Savings      Buyout Cap Hit
2011
-2012    $6,000,000    $6,666,667    $2,238,095    $3,761,905    $2,904,762
2012
-2013    $11,000,000    $6,666,667    $2,238,095    $8,761,905    $-2,095,238
2013
-2014    $11,300,000    $6,666,667    $2,238,095    $9,061,905    $-2,395,238
2014
-2015    $11,300,000    $6,666,667    $2,238,095    $9,061,905    $-2,395,238
2015
-2016    $11,600,000    $6,666,667    $2,238,095    $9,361,905    $-2,695,238
2016
-2017    $11,800,000    $6,666,667    $2,238,095    $9,561,905    $-2,895,238
2017
-2018    $10,000,000    $6,666,667    $2,238,095    $7,761,905    $-1,095,238
2018
-2019    $7,000,000    $6,666,667    $2,238,095    $4,761,905    $1,904,762
2019
-2020    $4,000,000    $6,666,667    $2,238,095    $1,761,905    $4,904,762
2020
-2021    $1,000,000    $6,666,667    $2,238,095    $-1,238,095    $7,904,762
2021
-2022    $1,000,000    $6,666,667    $2,238,095    $-1,238,095    $7,904,762
2022
-2023    $1,000,000    $6,666,667    $2,238,095    $-1,238,095    $7,904,762
2023
-2024    $3,000,000    $6,666,667    $2,238,095    $761,905    $5,904,762
2024
-2025    $4,000,000    $6,666,667    $2,238,095    $1,761,905    $4,904,762
2025
-2026    $0    $0    $2,238,095    $-2,238,095    $2,238,095
2026
-2027    $0    $0    $2,238,095    $-2,238,095    $2,238,095
2027
-2028    $0    $0    $2,238,095    $-2,238,095    $2,238,095
2028
-2029    $0    $0    $2,238,095    $-2,238,095    $2,238,095
2029
-2030    $0    $0    $2,238,095    $-2,238,095    $2,238,095
2030
-2031    $0    $0    $2,238,095    $-2,238,095    $2,238,095
2031
-2032    $0    $0    $2,238,095    $-2,238,095    $2,238,095
2032
-2033    $0    $0    $2,238,095    $-2,238,095    $2,238,095
2033
-2034    $0    $0    $2,238,095    $-2,238,095    $2,238,095
2034
-2035    $0    $0    $2,238,095    $-2,238,095    $2,238,095
2035
-2036    $0    $0    $2,238,095    $-2,238,095    $2,238,095
2036
-2037    $0    $0    $2,238,095    $-2,238,095    $2,238,095
2037
-2038    $0    $0    $2,238,095    $-2,238,095    $2,238,095
2038
-2039    $0    $0    $2,238,095    $-2,238,095    $2,238,095

TEXT CAP HIT BREAKDOWN 
(for copying and pasting)

ILYA KOVALCHUK BUYOUT FROM CAPGEEK.COM

2011
-2012: $2,904,762
2012
-2013: $-2,095,238
2013
-2014: $-2,395,238
2014
-2015: $-2,395,238
2015
-2016: $-2,695,238
2016
-2017: $-2,895,238
2017
-2018: $-1,095,238
2018
-2019: $1,904,762
2019
-2020: $4,904,762
2020
-2021: $7,904,762
2021
-2022: $7,904,762
2022
-2023: $7,904,762
2023
-2024: $5,904,762
2024
-2025: $4,904,762
2025
-2026: $2,238,095
2026
-2027: $2,238,095
2027
-2028: $2,238,095
2028
-2029: $2,238,095
2029
-2030: $2,238,095
2030
-2031: $2,238,095
2031
-2032: $2,238,095
2032
-2033: $2,238,095
2033
-2034: $2,238,095
2034
-2035: $2,238,095
2035
-2036: $2,238,095
2036
-2037: $2,238,095
2037
-2038: $2,238,095
2038
-2039: $2,238,095 
Lou - you evil genius.

For only $63M and cap hell for the rest of your childrens' lives, you can buy a few years of an extra $2M in cap room.

Circumvention, Circumvention


Last edited by kdb209: 12-28-2010 at 02:56 AM.
kdb209 is offline   Reply With Quote
Old
12-28-2010, 10:32 AM
  #3
AllByDesign
Thomas who?
 
AllByDesign's Avatar
 
Join Date: Mar 2010
Location: Location, Location!
Country: Canada
Posts: 2,299
vCash: 500
But KDB, you are forgetting that by the 2037 season the cap will be nearly a Billion dollars, so the cap hit would be workable.


AllByDesign is offline   Reply With Quote
Old
12-28-2010, 10:50 AM
  #4
Fugu
Guest
 
Country:
Posts: n/a
vCash:
Quote:
Originally Posted by kdb209 View Post
Lou - you evil genius.

For only $63M and cap hell for the rest of your childrens' lives, you can buy a few years of an extra $2M in cap room.

Circumvention, Circumvention
Quote:
Originally Posted by AllByDesign View Post
But KDB, you are forgetting that by the 2037 season the cap will be nearly a Billion dollars, so the cap hit would be workable.


Given their results so far, it seems it would be worth it.

  Reply With Quote
Old
12-28-2010, 11:18 AM
  #5
AllByDesign
Thomas who?
 
AllByDesign's Avatar
 
Join Date: Mar 2010
Location: Location, Location!
Country: Canada
Posts: 2,299
vCash: 500
Quote:
Originally Posted by Fugu View Post
Given their results so far, it seems it would be worth it.

So true. Let's give Kovalchuk some credit. He picked a fight with Phaneuf, so that can only tell us one thing. He is making every effort to help his team by trying to get on the LTIR. Adda boy Ilya!

AllByDesign is offline   Reply With Quote
Old
12-28-2010, 04:58 PM
  #6
Fourier
Registered User
 
Fourier's Avatar
 
Join Date: Dec 2006
Location: Waterloo Ontario
Country: Canada
Posts: 8,850
vCash: 500
I picked Kovalchuk in my hockey pool. That pretty much sealed the deal as far as his fate this year is concerned. Out of ten players he is one of only 4 that did not have injury issues . So for all you Devil fans out there, don't worry, next year he will be back to normal.

Fourier is offline   Reply With Quote
Reply

Forum Jump


Bookmarks

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off



All times are GMT -5. The time now is 06:23 PM.

monitoring_string = "e4251c93e2ba248d29da988d93bf5144"
Contact Us - HFBoards - Archive - Privacy Statement - Terms of Use - Advertise - Top - AdChoices

vBulletin Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
HFBoards.com is a property of CraveOnline Media, LLC, an Evolve Media, LLC company. 2014 All Rights Reserved.