Buyout Question

[Ford Prefect]

In reading Kings fans' disgust with the Dubois contract and talking about a 1/3 buyout, it made me think of an option, but I'm not sure if it violates any CBA/league rules. Let's suppose the Kings trade Dubois to team B for the purpose of buying out the contract. Can LA retain 50%, and have Team B buy him out, thus spreading his buyout across both teams? So in years 27-28 to 29-30 when the cap hit is ~3.8 million, they would each be on the hook for 1.9 instead (subject to the adjustment made for the Kings benefit of receiving cap relief this year on actual salary/aav). I'm not asking the price or if any team would want to have dead space on their books for the next 14 years. I'm just wondering if it's legal. (can obviously be used in any buyout scenario, not just this one).

Seems like it's right up @mouser alley.

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[mouser]

This would be completely legal. There’s no restriction on Team A retaining on a player and later Team B buying out the player.

If Team B decides instead they want to keep PLD at 50% rather than buy him out after the trade then LA would have no grounds for complaint. Teams can’t include conditions in trades dictating or restricting what the new Team B later does with the player—including a requirement to buyout the player.

 

[Ford Prefect]

This would be completely legal. There’s no restriction on Team A retaining on a player and later Team B buying out the player.

If Team B decides instead they want to keep PLD at 50% rather than buy him out after the trade then LA would have no grounds for complaint. Teams can’t include conditions in trades dictating or restricting what the new Team B later does with the player.

Thank you for response. Informative as always!

Can you theorize why teams don't do this? Not on a seven year contract, but one of those 1-2 year remaining deals? For teams that want to weaponize cap space?

 

[mouser]

Thank you for response. Informative as always!

Can you theorize why teams don't do this? Not on a seven year contract, but one of those 1-2 year remaining deals? For teams that want to weaponize cap space?

Team B's frequently "weaponize" their cap space to take on cap dump contracts with 1-2 years remaining.

But Team A's looking to dump a bad contract with 1-2 years remaining are the "Sellers" in this marketplace and prefer not to retain salary if possible. Or sometimes willing to pay extra not to retain salary to dump the player contract--allowing Team A to free up the maximum possible cap space. If Team A doesn't retain salary then it doesn't make a difference to them whether or not Team B buys out the player.

 

[jd22]

A similar case happened with the OEL buyout. When Benning The Incompetent acquired OEL there was 12% retention on him; a couple years later, Canucks bought him out. Arizona now has a minor cap hit from OEL until 2031 after Vancouvers buyout of OEL.

Bit of a flaw with the various NHL cap trackers is that they only show the cap hits of their longest-contracted active player - I couldn't find any that actually show the Coyotes cap commitment to OEl until 2031.

A breakdown here: How the Canucks’ OEL buyout affects (and kind of screws over) the Arizona Coyotes