CBA Question

Discussion in 'The Business of Hockey' started by Ford Prefect, Jul 30, 2006.

  1. Ford Prefect

    Ford Prefect Registered User

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    Under the new CBA, are teams allowed to include cash considerations in a trade? The reason that I am asking, is that I'm wondering if that is what Lou Lamereillo might be planning. For instance, he may take a team such as the Pens that have tons of cap room and send them Mogilny and Malakhov (as well as cash considerations) as well as a high pick or two in return in for maybe some joutneymen players or marginal prospects they can send to Albany. NJ has incentive cause they get cap relief and may be able to keep Gomez and Gionta, whereas the Pens gain some draft picks without really having to increase their payroll. Whether it gets endorsement from the NHL is another question, but are these trades possible under the new CBA?

    N.B. You can substitute Pit with Washington, or any other team with a lot of cap flexibility. I'm not asking about them being ideal trading partners, just whether or not the mechanics are sound
     
  2. Irish Blues

    Irish Blues Worth waiting for :)

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    No - Article 50.8(b) specifically prohibits this.

    I'm actually working on a FAQ for the CBA to go on my website - but it's not ready just yet. When I have it done, it'll go up here as a sticky and then as people ask more questions, I'll edit accordingly.
     
  3. SJeasy

    SJeasy Registered User

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    I read through article 50 and did not find any reference to revenues affecting escrow when calculating the quarterly adjustment. Did I miss something?
     
  4. kdb209

    kdb209 Global Moderator

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    You appear to be correct - all of the adjustment's seem to be based on aggregarted Actual Club Salaries and the Adjusted Midpoint (which is based on the previous season's HRR).

    This is odd, since last year their were reports that the escrow %-age was adjusted down during the season, because actual revenues were exceeding the estimates.
     
  5. Irish Blues

    Irish Blues Worth waiting for :)

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    I think it was because while escrow was being withheld, it was already clear that the money was going to be returned to the players and the NHL and NHLPA agreed to reduce the percentage of withholding for future escrow during the year to prevent a massive repayment to the players.
     
  6. SJeasy

    SJeasy Registered User

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    The question then becomes one of whether they would make the same move again if circumstances warranted even without justification in the CBA.
     
  7. RTWAP*

    RTWAP* Guest

    I wonder how many of these side agreements will happen during the course of this CBA to fix or fine-tune it.

    Anyone have any suggestions for things they would like to see fixed?

    Personally, I would like to see a new rule for UFA eligible players. If a team signs a UFA to a one-way contract for less than $750,000 then that player does not need to pass through waivers on a recall.

    The intent of the rule would be to allow teams to have a little depth on the farm without worrying about losing it (and paying half the cost) on recall. The PA doesn't like team's burying players but if the player has already reached UFA status and choses to sign for near-minimum with a deep team then he knows he's a depth player. If the other option is $150,000 in Europe then I'm sure he'd rather make $750,000 splitting time between the AHL and NHL.
     
  8. Captain Ron

    Captain Ron Registered User

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    Well last year they were going on a blind budget and didn't really know how much in revenue the league would actually make. Going forward it seems the league is adjusting the escrow account based on the previous year's revenue. So the only way it could be a problem is if the revenue for the league dropped in the subsequent season.

    But you have to also take into account that at the beginning of the season all possible performance bonuses are taken into account when calculating the "Aggregated Adjusted Midpoint of the Team Payroll Range" . So this would inflate during the first 3 quarters of the season how much salary was actually being given to the players since the actual salary paid out to those players would probably be considerably less. As the season goes along and those bonuses are no longer achievable they will no longer be included in the "Aggregated Adjusted Midpoint of the Team Payroll Range". But since the league has already collected an escrow percentage on an amount that was never actually paid.....it gives the league a buffer zone.....in case there is a marginal decrease in league-wide revenue for the current season. If as the season was in progress the league believed there would be a considerable drop in revenue from the previous season they would probably meet with the heads of the NHLPA to discuss increasing the escrow account beyond just the excess of the "Aggregated Adjusted Midpoint of the Team Payroll Range".
     
  9. kdb209

    kdb209 Global Moderator

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    Actually the "Adjusted Midpoint of the Team Payroll Range" does not change during course the season. It is just the Midpoint based on the previous years HRR plus the 5% (or other) inflation factor.


    Section 50.5(b):
    The "total aggregated amount of all NHL Clubs' Actual Club Salaries" may change over the course of the season, but not by a lot, and it is more likely to increase, than decrease - the Long Term Injury Exception effects Averaged Club Salary, not Actual Club Salary - both the Injured player and any replacements both count in Actual Club Salary.

    The credit for unacheivable bonuses does not effect Actual Club Salary, instead they are compensated for seperately in the escrow percentage calculation 50.4(d)(iii):

     
  10. Captain Ron

    Captain Ron Registered User

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    You are correct kdb209......But the league can also implement a "catch-up payment". Where if at the beginning of the first quarter the projected actual salaries are below the "Adjusted midpoint of the payroll range" no escrow withholding would be necessary. But if at the end of the 1st quarter the actual salaries did in fact exceed the midpoint the league would withhold that difference from future payments to the players.

     

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