2013 NHL-NHLPA CBA

[Grant]

Was hoping someone could answer this for me, had some trouble finding the answer.

So with contracts, there are a few rules that apply to prevent back diving deals such as
- Max 35% variance year-over-year
- Max 50% variance between lowest year and highest year of contract (Variance restrictions apply only to frontloaded deals, not backloaded deals)

Do these variances include signing bonus amounts too? Could a team in theory sign a player to a contract such as year's 1-4 with 1m salary each, and then signing bonus of 5m years 1 + 2 effectively paying the players as follows
Year 1 - 6m
Year 2 - 6m
Year 3 - 1m
Year 4 - 1m

Player has a 4.5m cap hit, but is more easily moveable due to the lower money owed in later years.


My instinct says that signing bonuses would be included in the variance amounts, but thought I would ask because the only player contract example I could think of doesn't even seem to follow the rules I stated earlier.

David Clarksons contract structure is laid out here (http://www.pensionplanpuppets.com/2...ksons-contract-is-maybe-probably-buyout-proof) and it doesn't follow the 50% max variance rule if you include signing bonus, but if you don't include signing bonuses then it doesn't follow the 35% variance per year part of the rule.

Was hoping someone could shed some light on this for me, thanks.

 

[mouser]

Was hoping someone could answer this for me, had some trouble finding the answer.

So with contracts, there are a few rules that apply to prevent back diving deals such as
- Max 35% variance year-over-year
- Max 50% variance between lowest year and highest year of contract (Variance restrictions apply only to frontloaded deals, not backloaded deals)

Do these variances include signing bonus amounts too? Could a team in theory sign a player to a contract such as year's 1-4 with 1m salary each, and then signing bonus of 5m years 1 + 2 effectively paying the players as follows
Year 1 - 6m
Year 2 - 6m
Year 3 - 1m
Year 4 - 1m

Player has a 4.5m cap hit, but is more easily moveable due to the lower money owed in later years.

My instinct says that signing bonuses would be included in the variance amounts, but thought I would ask because the only player contract example I could think of doesn't even seem to follow the rules I stated earlier.

The contract variability rules include all bonuses and salary for each year.

David Clarksons contract structure is laid out here (http://www.pensionplanpuppets.com/2...ksons-contract-is-maybe-probably-buyout-proof) and it doesn't follow the 50% max variance rule if you include signing bonus, but if you don't include signing bonuses then it doesn't follow the 35% variance per year part of the rule.

Was hoping someone could shed some light on this for me, thanks.

Clarkson's contract is not front-loaded, so it doesn't have to follow the 50% rule. The article is focused on a Clarkson buyout and is missing the first year of Clarkson's contract.

13-14: $4.5m
14-15: $4.75m
15-16: $5.5m
16-17: $7.0m
17-18: $7.0m
18-19: $4.75m
19-20: $3.25m

Average: $5.25m
Average over first half of contract: $5.215m [(4.5+4.75+5.5+7*50%) / 3.5 years] is lower then the average of the entire contract.

 

[Grant]

The contract variability rules include all bonuses and salary for each year.



Clarkson's contract is not front-loaded, so it doesn't have to follow the 50% rule. The article is focused on a Clarkson buyout and is missing the first year of Clarkson's contract.

13-14: $4.5m
14-15: $4.75m
15-16: $5.5m
16-17: $7.0m
17-18: $7.0m
18-19: $4.75m
19-20: $3.25m

Average: $5.25m
Average over first half of contract: $5.215m [(4.5+4.75+5.5+7*50%) / 3.5 years] is lower then the average of the entire contract.

Ah okay, I missed that rule. Thanks a lot for clearing that up for me!

 

[lindroshomer]

I'm asking here instead of starting a new thread. I was listening to Leafs Lunch today, they were talking about Mitch Marner either going to OHL next year or NHL, there was no AHL option discussed. I was under the assumption that all rookie entry level deals included a 2 way clause? I know there are incentives and stuff, but I thought they were all 2 way deals. What's the deal with Marner's contract?

Thanks

It wouldn't surprise me if you had a choice to sign a 1 way deal, but...that would be reserved for players like McDavid. To further add to that as an agent you'd be hindering the team and your client's ability to play where he needs to play to develop.

 

[LadyStanley]

I'm asking here instead of starting a new thread. I was listening to Leafs Lunch today, they were talking about Mitch Marner either going to OHL next year or NHL, there was no AHL option discussed. I was under the assumption that all rookie entry level deals included a 2 way clause? I know there are incentives and stuff, but I thought they were all 2 way deals. What's the deal with Marner's contract?

Thanks

It wouldn't surprise me if you had a choice to sign a 1 way deal, but...that would be reserved for players like McDavid. To further add to that as an agent you'd be hindering the team and your client's ability to play where he needs to play to develop.

Players drafted from the CHL (OHL, QMJHL, WHL) cannot play in the AHL until they are 20 (based on NHL-CHL agreement). (Players from Europe or in US junior leagues/college can play in AHL before age 20. Post-injury, an "under age" player can be assigned to AHL for conditioning stint.)

All players 25 and under must sign an entry level contract as their first deal. (Max length is 3 years; determined by age when player signs.) ELS deals by definition are two-way (i.e., different $$s paid based on where player plays -- NHL or AHL/ECHL).

 

[mouser]

It wouldn't surprise me if you had a choice to sign a 1 way deal, but...that would be reserved for players like McDavid. To further add to that as an agent you'd be hindering the team and your client's ability to play where he needs to play to develop.

That's a major confusion created by EA and their NHL video games. 1-way vs 2-way contracts in the NHL have nothing to do with whether a player can be sent to the AHL or not. It only affects the player's salary--players on 1-way contracts earn their NHL salary whether they're playing in the NHL or AHL. Players on 2-way contracts have different salaries if they're playing in the NHL (larger salary) or AHL (smaller salary).

All rookie entry level deals must be 2-way contracts. So McDavid for example is on a 2-way contract.

 

[LadyStanley]

http://sports.yahoo.com/blogs/nhl-p...got-call-during-baby-bath-time-040132793.html

It was a call he had to anticipate could come eventually. Per NHL rules, the Coyotes (and every other team) has to submit the name of an emergency goalie to the League. Schoenfeld was their choice.

Nice that there's a guy in each NHL city knowing he could "get the call."

 

[nullmeatbag]

Can anyone explain how the bonus cushion affects 'banked' cap space? For example, with the cap at $71.4M and the cushion at $5.355M, and a team's average salary at a total of $74M (including $4M in potential performance bonuses), does the team bank $1.4M per day to use in the future? Or is it similar to LTIR in that the team does not bank the 'relief' they get?

 

[mouser]

Can anyone explain how the bonus cushion affects 'banked' cap space? For example, with the cap at $71.4M and the cushion at $5.355M, and a team's average salary at a total of $74M (including $4M in potential performance bonuses), does the team bank $1.4M per day to use in the future? Or is it similar to LTIR in that the team does not bank the 'relief' they get?

The bonus cushion doesn't impact accumulated payroll room. In your example the team would have $1.4m of space accumulating through the season as if no players on the team had bonus clauses in their contracts.

 

[nullmeatbag]

Interesting. I've been trying to decipher the Oilers' situation from the start of the season. Referring to this page (which doesn't include bonus amounts OVER the bonus cushion), I can't understand the reasoning for putting Eberle on LTIR.

Referring also to a post by a local media guy at the time:

This morning, they reassigned Laleggia and Pitlick to Bakersfield and recalled Draisailt. Before they recalled Draisaitl they put Eberle on LTIR. The closer a team is to to being capped out BEFORE using LTIR, the more they can exceed the cap by. So the Oilers recalled Pitlick and Laleggia to get closer to the ceiling, and then put Eberle on LTIR.

The Oilers could not recall Draisaitl before putting Eberle on LTIR because they didn't have enough cap space. The Oilers are already at the $5.5 million bonus overages on contracts due to Connor McDavid, Oscar Klefbom, Griffiin Reinhart, Darnell Nurse and Anton Slepyshev, and so while Draisaitl's base is $925,000, he also has potential $2.475 in bonuses, so due to the Oilers already maxing out their bonus overages, Draisaitl's cap hit is $3.4 million.

From the start of the season up until the day of the LTIR placement, the Oilers were banking around $3M a day in space. So having Draisaitl called up and affecting the cap at $3.4M a day would appear to still not have used up their banked space until a long time after Eberle came off LTIR again, according to my rough calculations. Resultantly, there would be no LTIR relief ever realized . What am I missing here?

Thanks so much for the help!

Edit: Is it also that the potential amount of LTIR relief is calculated with regard only to the exact day that the election is made? So in this case, even though the Oilers had lots of banked space, they tried to make their average salary for *that exact day* as close to $71.4M as possible (with the Laleggia and Pitlick callups since the Draisaitl callup would've put them over $71.4M on that day only), essentially disregarding their accumulated payroll room?

 

[mouser]

Interesting. I've been trying to decipher the Oilers' situation from the start of the season. Referring to this page (which doesn't include bonus amounts OVER the bonus cushion), I can't understand the reasoning for putting Eberle on LTIR.

From the start of the season up until the day of the LTIR placement, the Oilers were banking around $3M a day in space. So having Draisaitl called up and affecting the cap at $3.4M a day would appear to still not have used up their banked space until a long time after Eberle came off LTIR again, according to my rough calculations. Resultantly, there would be no LTIR relief ever realized . What am I missing here?

If that page doesn't include bonus cushion overage, let's look at what the Oiler's bonus situation was on that day. Players on the roster with bonus clauses and amounts:

McDavid: $2,850,000
Reinhart: $2,350,000
Nurse: $850,000
Klefbom: $350,000
Shepyshev: $600,000
Pakarinen: $132,500

total = $7,132,500

The bonus cushion is 7.5% of the ceiling, so currently $5,355,000. The performance bonuses on the Oilers at that time exceeded the bonus cushion by $1,777,500. All of that overage would count against the Oilers cap bringing their averaged payroll to somewhere around $70m at the time. Not enough room to fit Draisaitl's $3.4m contract in since all of his performance bonuses would be over the cushion as well.

Edit: Is it also that the potential amount of LTIR relief is calculated with regard only to the exact day that the election is made? So in this case, even though the Oilers had lots of banked space, they tried to make their average salary for *that exact day* as close to $71.4M as possible (with the Laleggia and Pitlick callups since the Draisaitl callup would've put them over $71.4M on that day only), essentially disregarding their accumulated payroll room?

Yes, the LTIR relief allowed is determined on the day that the LTIR Exception is exercised. So they could have machinated to get as close to the cap ceiling as possible before exercising.

 

[nullmeatbag]

I guess I'm misunderstanding how any accumulated payroll room can be used ('banked' space as I called it in my previous posts). When you mention that Draisaitl's $3.4M couldn't fit under the cap at that point, doesn't the previous month (where they were generally around ~$70M, or accumulating $1.4M of room per day) allow them to fit that $3.4M hit?

 

[mouser]

They would be accumulating $1.4m divided by the # of days in season each day.

Another way to look at it, if the Oilers had been averaging $70m all season, then at the end of October (5/6ths of season remaining) then could have had room to add a contract of $1.4m * (1/(5/6)) = $1.68m. At the midway point of the season that would be $2.8m, and at the trade deadline (1.33 months remaining) around $6.3m.

 

[nullmeatbag]

Edited:

Sorry for the many questions - I think (or thought) I understood the daily pro-rating part, but my calculations still aren't coming out right.

My flawed understanding is as follows: even with the bonus cushion excess applied here, the Oilers were hovering around $68.2M per day for the first 22 days of the season. This comes out to ~$400K in accumulated payroll room. Adding Draisaitl (at an aggregate cap cost of $3.4M, or an ~$18K daily cap cost) would put them over the $71.4M upper limit and start eating into their banked space at a pro-rated amount of $0.2M ($68.2M + $3.4M puts them at $0.2M over the cap every day). So every day, their banked space would diminish by ~$1K ($0.2M * (1/186)), which would take roughly 400 days for the banked space to reach zero. Therefore, the Oilers could've afforded Draisaitl's full cap hit (even without the bonus cushion protection) for the remaining 164 days of the season by reason of the space they banked for the first 22).

I'm obviously missing something here, I just can't figure out what.

 

[LadyStanley]

http://www.sportsnet.ca/hockey/nhl/30-thoughts-canadian-teams-will-be-busy-on-deadline-day/

Interesting "flexing" of TML's financial "muscle"

Interesting window into another way Toronto can flex its financial muscle in a cap world. Last week, the organization flew goaltender Garrett Sparks from AHL Toronto to ECHL Orlando so he could make a start. Then, they flew him back.

Don’t imagine that happens too often, but it got him some needed work.

TML = big bucks in the bank

 

[LadyStanley]

So, Chicago trades player with retained salary, and they take some, and going the other way, hiding some in AHL....





Didn't know about the max two teams retaining salary.

 

[mouser]

The max of two salary retentions on a single contract is spelled out clearly in the CBA. So a player could be theoretically traded twice with a cumulative 75% retention. 50% the first time and 50% of the remaining 50% in the second trade.

 

[Northern Dancer]

Quick question, may be in here somewhere but what they hey?

If Milan Michalek does not make the Leafs out of training camp next September and is assigned to the Marlies, do the Leafs get 100% cap relief?

 

[LadyStanley]

Quick question, may be in here somewhere but what they hey?

If Milan Michalek does not make the Leafs out of training camp next September and is assigned to the Marlies, do the Leafs get 100% cap relief?

Only $925K.

 

[Northern Dancer]

Only $925K.

Thanks, so then how about someone like Josh Leivo who was on the Marlies this year except for a brief call-up. If he doesn't make the team does the same rule apply?

 

[Eric Sachs]

Thanks, so then how about someone like Josh Leivo who was on the Marlies this year except for a brief call-up. If he doesn't make the team does the same rule apply?

Doesn't matter where they played in the past.. you can no longer bury contracts over 925k without a cap charge (which is the cap hit - 925k).

Since Leivo has only a 792k cap hit, he can be completely buried in the AHL with no cap charge.
Michalek would have a cap charge of 4M - 925k = 3.075M

 

[member 96824]

I'm on the hunt right now, but curious to see if anyone knows off the top. I'm recalling seeing that teams have the ability to release exclusive negotiating rights to drafted players, but I'm having a little trouble finding the section where this is under.

Example of when a team would do this: Team approaching the 90 player limit, releases a failing unsigned 7th round pick to stay under.

Am I misremembering this?

 

[LadyStanley]

I'm on the hunt right now, but curious to see if anyone knows off the top. I'm recalling seeing that teams have the ability to release exclusive negotiating rights to drafted players, but I'm having a little trouble finding the section where this is under.

Example of when a team would do this: Team approaching the 90 player limit, releases a failing unsigned 7th round pick to stay under.

Am I misremembering this?

Teams can "remove from 90 player" list any time. They become UFAs (and/or go back to draft, based on age).

I recall the Sharks making an announcement that they would not sign two draftees (twins, actually). The two were in college, so 3 or so years after being drafted. (I think it was more a matter of ending relationships with talented, but character-flawed, players that did not have the fortitude/discipline to ever make a good player, rather than needing those spots on the depth chart.)

 

[Killion]

Teams can "remove from 90 player" list any time. They become UFAs (and/or go back to draft, based on age).

I recall the Sharks making an announcement that they would not sign two draftees (twins, actually). The two were in college, so 3 or so years after being drafted. (I think it was more a matter of ending relationships with talented, but character-flawed, players that did not have the fortitude/discipline to ever make a good player, rather than needing those spots on the depth chart.)

Strikes me you know more about this subject... have an opinion... not speaking... and... politically incorrect?... you need to voice LS...

 

[boredmale]

The Islanders signed Ladd on a bonus heavy contract. Basically he gets a large chunk of his money on July 1, then 1M during the season for the bulk of the deal. In the final year he gets a 3M bonus(July 1) + 1M . If the Islanders traded him on July 2 that last year, how would the caphit be distributed that season? Would the team picking him up get dinged the entire caphit since it's viewed he played the entire season there or would the Islanders get dinged 75% of the caphit because they paid 75% of his salary that year?