That works out too well for SJ. Why should they have no cap penalty? They voided the contract without reasonable grounds. COVID protocols were (and a year later continue to be) an absolute shit show. Whatever Kane did to try to circumvent the ‘rules’ was at worst a fine. That’s not grounds for termination. They had a locker room problem and tried to ‘solve’ it by terminating the squeaky wheel with the COVID passport stuff being nothing but a convenient and flimsy excuse. That’s bullshit, and the NHLPA rightly filed a grievance. The NHL cannot afford to start letting teams terminate contracts willy nilly for whatever they deem to be reasonable grounds. This is a cap league, and should the arbitration go against SJ, they should absolutely be facing a cap penalty similar to what the buy out of the contract would have been. Anything less in not acceptable. Fans (not to mention owners and GMs) of other Pacific teams should be outraged if that happens.
You are 100% right. It sounds like a settlement would still result in a cap penalty for San Jose. It also sounds like the arbitrator has 2 options. They either decide it was terminated with cause and Kane hits free agency like normal or he wasn't as the contract is re-instated.
If Kane wins and the contract is re-instated due to a wrongful termination it would put San Jose over the cap. I don't think the sharks want to be in that position. Things could get very ugly as they don't want him and Kane doesn't want to be there. In theory, the Sharks could try and be sneaky and "welcome" Kane back knowing very well that he will refuse to report. I don't think they want to deal with all of that headache so they would likely find a trade. In this case they could trade his 7M x 3 year contract to a team like Edmonton (keep in mind Kane would get his NTC back). They would have to retain something (maybe 2M a season).
This may actually be a better move for the sharks than reaching a settlement, depending on what Kane is asking for. Even though Kane would essentially make more money by settling and then signing another contract. The magic number here would whatever the sharks think they would have to retain, would it not? In this example, the Sharks probably wouldn't settle in paying out anything more than 6M of the 23M he is owed because they can just take that contract and retain.
I don't see why the Sharks would want to settle for like 15M of the 23M and be on the hook for 5M for the next 3 seasons when they could just trade his contract and retain 2M a season. Right?