Cap Question Re: Belfour

Discussion in 'The Business of Hockey' started by RTWAP*, Mar 7, 2006.

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  1. RTWAP*

    RTWAP* Guest

    Would this work?

    June 25th: Toronto declines Belfour's option for next year and pays him the $1.5M he is due.
    June 26th: Toronto trades Belfour's rights (still under contract for this year until July 1?) to another team.
    July 1: Belfour becomes a UFA and signs somewhere else

    The question is, would the $1.5M for Belfour for next year be assigned to Toronto's cap, or to the team he was traded to?

    If the team Belfour is traded to has cap space they won't be using then something like this might let convert that space into an asset coming back from Toronto.

    Likewise, Toronto would be able to convert a prospect into $1.5M of valuable cap space.
     
  2. kdb209

    kdb209 Registered User

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    My guess is that it won't work.

    It all depends upon the wording of the option clause in Belfour's contract, when the payment in lieu of exercising the option is due and what his status is if the option is declined.

    If the payment isn't due until July 1, then he is already a UFA and cannot be traded. He could be traded before then, but then his new team would be responsible for both the cap hit and real $$$'s for the payment - and that is the situation that you are trying to avoid. In order for a team to pick up both the $1.5M cap hit and $1.5M in real cash, the Leafs will have to sweeten the deal for the other team.

    Under the standard SPC buyout clause, when a player is bought out, he immediately becomes a UFA. If Belfour's clause is similar, he may immediately become a UFA and untradable once the option is declined.

    Also, there is very likely a window specified in the contract when the clause can be exercised, and we don't know what that is.

    Given that the CBA cap hits are based on actual dollars paid out by teams, it is likely that if Toronto pays the $1.5M, it counts against their cap.
     
  3. mooseOAK*

    mooseOAK* Guest

    I think that once Toronto declines the option then they don't have any rights to trade.

    Based on what I have read the buyout cap hit can be split into two years if needed.
     
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