Shea Weber's Cap recapture

[BigFatCat999]

Ages Shea Weber were to retire:
Age: 40 Cap Recapture (0M)
Age: 39 Cap recapture (0M)
Age: 38 Cap Recapture (.715M)
Age: 37 Cap Recapture (2.762M)
Age: 36 Cap Recapture (3.286M)
Age: 35 Cap Recapture (3M)
Age: 34 Cap Recapture (2.674M)
Age: 33 Cap Recapture (2.674M)
Age: 32 Cap Recapture (2.572M)


I keep hearing, “My Gawd, we can’t trade Weber. Cap recapture!†More and more I kept hearing this and wondering how big a penalty it is? After perspective and thinking about this and researching, I might just punch the next person who says anything about Shea Weber’s cap recapture. Either in the throat or in the junk. Or both. Why? Other than the fact it might be fun? The fact that it’s like the Spanish Inquisition threating you with the comfy chair. What would the penalty be? At most? 3.286 million of cap penalty. Not cash penalty. Cap hit. The Preds would not be paying 3.286 million in cash but be PREVENTED from paying 3.286 million dollars of cash, IF they are a cap max team. Now, this could be annoying but as a penalty, meh. Also it has to be when Weber retires, not injury, not after he’s traded, but retires. Let’s break this down point by point.

When Shea Weber retires the team that holds his contract will suffer recapture.

First off, the contract is till he’s 40 years old. Ok, if he retires from 40 and before. Wait a minute, there is not an actual penalty if he retires at age 40 or 39. If he retires at age 38, the cap recapture is .715 million for 3 years. That’s nothing, the Preds have .9 million in buyouts right now. So for 3 years of the contract the cap recapture penalty is none or minimal. Let’s say Weber retires at age 37, possible, the cap recapture is 2.762M for 4 years. What are the 4 years? 2022-2026. Seriously. That’s not a penalty, that’s an annoyance. Poile will not be the GM of the Preds. Lavy will not be the coach of the Preds. This is not a problem to be concerned about.

But what if Shea retires before 36?
That aint gonna happen. Period. Shea Weber is a very talented defenseman and should have a useful NHL career till his late 30’s. That’s why he’s a valuable trade chip. He should play till 37.

What if he does retire at 35?
First off, the only reason why he might leave the NHL is if he is injured. That would be bad for him but if he does have an injury early he will be Prongered. He will stay and cash out his contract to be LTIR’d. Cap recapture will not be an issue. Shea gets his cash for nothing, (Hell, he might replace Pronger in DOPS.)

But it’s 3 million dollars!
Ok, 3 million dollars. But 3 million dollars in 2020. The NHL has it’s own inflation rate called the salary cap. When the cap increases, the value of the cap dollar goes down. Let’s look at how the cap has gone up over the years.
In 2007-2008 the salary cap was 50.3 Million. Thus, a 3 million cap hit would be 6% of the cap….in 2007-2008. In 2008-2009 the cap jumped up to 56.7 Million. That’s a 13.3% increase, or a 13.3% inflation rate on the salary cap. 2009-2010, 56.8 million. .2% increase but 3 million would only be 5.3% of the cap. Annoying but not debilitating.. 2010-2011, 59.4 million. 4.6% increase. 2011-2012, 64.3 Million, 8.3% increase. After the lockout, the teams could spend to 70.2 Million. 9.2% increase. The salary cap right now is 68.4 million. What is 3 million compared to the cap? 4.4% of the cap. But this is in 2015-2016 dollars. Frankly, the 3 million hit, not cash, will be paid in 2020-2021 cap dollars and 3 million might but less than 3% of cap by that time. But even this would be moot.
Why?
Why? Because the Preds don’t ever max out their cap, the most they have ever been to the cap ceiling is 1 million but they usually average 5-8 Million under the cap ceiling. And once again, that’s in 2015-2016 dollars. Currently, the Preds are 9.5 Million under the cap now.
So, if the Preds were to suffer the penalty it would be deflated because of the NHL’s internal inflation rate, not cost the Preds any money, be taken off from their internal cap gap so it’s an asset they never use will be used, and might help the Preds RIGHT NOW to get in the playoffs and possibly win the cap.
Short term, cap recapture is no penalty. Medium term (3-5 years), chance for a penalty but minimal. Long term (6-9 years) zero to no penalty.

BUT…BUT…BUT, what would the defense look like?
I thought I answered all your questions. OK, just to humor you:
Josi-Ellis
Ekholm-Jones
Jackman-Granberg/Bartley/Bitetto/Aronson This will be minimized by increasing the top 2 pairing TOI leaving these guys 6-10 minutes.

Click to read more...

 

[glenngineer]

Where did you get your numbers from? I thought if he retired at 39 or. 40 the recapture was in the tens of millions against us.

 

[BigFatCat999]

http://www.broadstreethockey.com/20...talk-a-reminder-about-cap-advantage-recapture

Based on the chart provided. The scary top number is the "advantage" received between the cap hit vs the salary hit. The number below is the "penalty". That is how I'm reading it.

 

[Byrddog]

Im pretty sure all of this is from Phillys POV for there part of the recapture.

 

[glenngineer]

Read this article and it reads much differently.

http://sports.yahoo.com/blogs/nhl-p...p-circumventing-contracts-153717517--nhl.html

 

[glenngineer]

Here's some more on how to calculate the figures.
Following is a step-by-step look at how these penalties are calculated for each team that received a “cap advantage†from a player’s contract, upon the player’s retirement or defection from the NHL:

Calculate Total Payment: the total actual salary and bonuses paid to the player while with the team
Calculate Total Cap Charge: the total number of cap dollars charged against the team’s salary cap for that player
Calculate Cap Advantage Recapture: Subtract Total Cap Charge from Total Payment.
Calculate Annual Cap Advantage Recapture Penalty: Divide Cap Advantage Recapture by number of league years remaining on the contract.

 

[glenngineer]

Say we trade Weber after this season, let's see what the recapture looks like.

$56 million for total salary with the team.

Cap charge is $7,857,143 times 4 for a grand total of $31,428,572

Subtract cap charge from total salary and we get $24,571,428

Divide that number by 10 years remaining on the contract and we are on the hook for $2,457,142.80 per year for the next 10 years.

Anyone want to corroborate this for me? Does it appear I've done this correctly?

 

[glenngineer]

If we trade him after year 6 the cap hit for the next 8 years is $4,107,142.75 for that time period.

If we move him after year 10 the cap hit for the next 4 years is $6,357,142.50 for that time period.

Honestly, if we're thinking of moving him I would say the sooner the better. Yes, we're shelling out money for the next 10 years but if he retires before the end of his contract, even if it's towards the end of his deal, we get hammered big time.

If we waited til after year 12 of the deal and he retires the cap hit is $7,857,154 but only for two years. That could be crippling depending on where we're at at that time.

Here's a question, what if we moved Weber and then reacquired him towards the end of his deal, would a recapture penalty still be in play since he's back with the team that originally signed him to his deal? That way we don't get hit and the team that acquired him and traded him back to us don't get hit with the penalty. Anyone? Bueller?

 

[Bringer of Jollity]

If we trade him after year 6 the cap hit for the next 8 years is $4,107,142.75 for that time period.

If we move him after year 10 the cap hit for the next 4 years is $6,357,142.50 for that time period.

Honestly, if we're thinking of moving him I would say the sooner the better. Yes, we're shelling out money for the next 10 years but if he retires before the end of his contract, even if it's towards the end of his deal, we get hammered big time.

If we waited til after year 12 of the deal and he retires the cap hit is $7,857,154 but only for two years. That could be crippling depending on where we're at at that time.

Here's a question, what if we moved Weber and then reacquired him towards the end of his deal, would a recapture penalty still be in play since he's back with the team that originally signed him to his deal? That way we don't get hit and the team that acquired him and traded him back to us don't get hit with the penalty. Anyone? Bueller?

The recapture penalty is going to hit us regardless of what team he plays for when he retires. The recapture penalty applies to any team that derived a cap advantage from the player (e.g. cap number being lower than actual salary)--which we have. No matter where he plays for the duration of his career (and that includes with us), we will have the likelihood of the cap recapture penalty looming over us.

The reason we can't trade him is not because we won't incur the cap recapture if he stays in Nashville, but the notion that he'd be less inclined to screw our cap by retiring early is he ends up being a lifelong Pred (a reasonable assumption IMO). In all likelihood we are going to wind up eating part of that penalty, the question is for how many years and how much.

If we were to trade him now, we would miss about $8M worth of cap recapture penalty, but still be on the hook for ~$24M, which we have derived an advantage from thus far.

 

[glenngineer]

The recapture penalty is going to hit us regardless of what team he plays for when he retires. The recapture penalty applies to any team that derived a cap advantage from the player (e.g. cap number being lower than actual salary)--which we have. No matter where he plays for the duration of his career (and that includes with us), we will have the likelihood of the cap recapture penalty looming over us.

The reason we can't trade him is not because we won't incur the cap recapture if he stays in Nashville, but the notion that he'd be less inclined to screw our cap by retiring early is he ends up being a lifelong Pred (a reasonable assumption IMO). In all likelihood we are going to wind up eating part of that penalty, the question is for how many years and how much.

So if we're going to take the hit regardless, if he's moved, doing it sooner than later is actually beneficial to us. That also depends on if he retires early or not.

If we trade him after this year and he retires after year 12 of his deal we are on the hook for over $12,000,000 a year for two seasons if I'm doing this correctly. The numbers I've posted are under the assumption we traded him and he retires right away. I thought those numbers didn't look quite right.

Where is 101 when I need his accumen for this sort of thing.

 

[Byrddog]

Glenn your figures look correct. And Duke is correct as well. The recapture was set to penialize teams with long contracts from escaping like they did in the past. When Poile inked this contract the team was bound even though the new provision was months away. The recapture penalty per year never exceeds the players avg cap for the contract so reguardless the Preds are exposed until the end of the contract. If traded the team that has him endures a smaller hit and I think that is what BIGCAT posted. It would be the part Philly would incur if Weber had been traded to them when they did those figures.

Could Weber still be traded sure and yes it could be costly after he retires for a couple years if he does not play until age 40. It would not be the biggest determining factor in a decision to trade him. That would be the return for what has already been paid to Weber. Chances are now Weber will not return enough. The problem I see would be Weber demanding a trade in the next three years. His value falls with each year of age so at 32 or 33 the GM will not get the haul he could have got when Weber was 27 or 28 but the recapture for those late years is still there.

 

[101st_fan]

So if we're going to take the hit regardless, if he's moved, doing it sooner than later is actually beneficial to us. That also depends on if he retires early or not.

If we trade him after this year and he retires after year 12 of his deal we are on the hook for over $12,000,000 a year for two seasons if I'm doing this correctly. The numbers I've posted are under the assumption we traded him and he retires right away. I thought those numbers didn't look quite right.

Where is 101 when I need his accumen for this sort of thing.

I'm drinking heavily and not in the mood to do math.

Maybe tomorrow ... sometimes family stuff trumps hockey numbers.

 

[glenngineer]

I'm drinking heavily and not in the mood to do math.

Maybe tomorrow ... sometimes family stuff trumps hockey numbers.

Thanks dude. Enjoy the family time. Happy holidays to you guys.

 

[101st_fan]

Thanks dude. Enjoy the family time. Happy holidays to you guys.

Times like this are when I miss capgeek and their calculators.

Thanks ... enjoy the holiday starting tonight.




If only my family stuff were happy this time.

 

[Bringer of Jollity]

So if we're going to take the hit regardless, if he's moved, doing it sooner than later is actually beneficial to us. That also depends on if he retires early or not.

If we trade him after this year and he retires after year 12 of his deal we are on the hook for over $12,000,000 a year for two seasons if I'm doing this correctly. The numbers I've posted are under the assumption we traded him and he retires right away. I thought those numbers didn't look quite right.

Where is 101 when I need his accumen for this sort of thing.

You are correct Glenn. If we are going to trade him or he is going to retire early, it is most beneficial for the organization from a financial standpoint for it to happen now.

One other possibility is that he goes LTIR instead of retiring, which I believe still allows us to exceed the cap by the amount of the player's cap hit. I expect they try to close that loophole sooner or later though (again, thank you to Philadelphia for that).

 

[jwhouk]

If only my family stuff were happy this time.

Been there, gonna do that this week.

 

[triggrman]

https://www.reddit.com/r/hockey/comments/3ctmu2/the_cap_recapture_penalty_what_it_is_and_why_it/

The max it can be for Shea is 6.9M.

 

[101st_fan]

The CBA does a terrible job of detailing how a cap recapture is applied after a trade. Using the Luongo example, the Preds could potentially have a $30mil+
net advantage for recapture if we were to trade him.


Basically, if Weber stays a Pred and retires early we take a couple million dollar cap hit no matter what. There is such a substantial cap advantage over the first six years that it never disappears, even with the $1mil salaries at the end. $24.5mil of advantage over the first four years ... $32.8 over six.

 

[BigFatCat999]

I agree with you 101, the CBA sucks. I'm reading it for the 6th time. Frankly, there are a lot of bad interpetations out there. It's finals week and I'm going to study for that. I'll re-read the CBA one more time when I get the chance. Fact is this, we are missing the human element. WHEN do you think Weber is going to retire? Does the advantage reset after every season? (AKA, do you lose a year's worth of advantage after eveery year Weber is on the team?), also there are multiple factors that cancel any threat of trading Weber. Taking percentages of contracts. LTIR, taking on bad contracts. Fact is, the main question is this. When is Weber going to retire?

 

[NSH615]

I agree with you 101, the CBA sucks. I'm reading it for the 6th time. Frankly, there are a lot of bad interpetations out there. It's finals week and I'm going to study for that. I'll re-read the CBA one more time when I get the chance. Fact is this, we are missing the human element. WHEN do you think Weber is going to retire? Does the advantage reset after every season? (AKA, do you lose a year's worth of advantage after eveery year Weber is on the team?), also there are multiple factors that cancel any threat of trading Weber. Taking percentages of contracts. LTIR, taking on bad contracts. Fact is, the main question is this. When is Weber going to retire?

If I remember correctly from how cap geek had it, every year his salary is higher than his cap hit, the recapture goes up, and then once his salary starts to decrease below the caphit and stays there, the recapture decreases and goes down each year.

As far as total dollars go, I am not sure on, but think of it like accrued cap advantage vs accrued cap disadvantage.

 

[Paranoid Android]

I get that the risk is still there, but the cap recapture penalty just seems like a non-issue to me. History shows us players either play until their contact is over, or go on LTIR because they can no longer play. You pretty much never see players leave money on the table and retire before their contact is up.

Even if by some rare occurrence he retires early, a $2-3M penalty is nothing to this team considering we never spend to the cap anyway.

 

[NSH615]

I get that the risk is still there, but the cap recapture penalty just seems like a non-issue to me. History shows us players either play until their contact is over, or go on LTIR because they can no longer play. You pretty much never see players leave money on the table and retire before their contact is up.

Even if by some rare occurrence he retires early, a $2-3M penalty is nothing to this team considering we never spend to the cap anyway.

Under this GM. In 8 years we will likely have a different GM who may operate differently and 2-3M could be the difference in landing a top free agent.

 

[Pred303]

if we want to be a weaker team for the next 4 years or so, we trade weber now. if not, we don't.

 

[triggrman]

if we want to be a weaker team for the next 4 years or so, we trade weber now. if not, we don't.

This.

There's only one player like him in the NHL right now.

 

[van22]

It's easier to see the numbers in a table. Methodology is described in post #6 and #7 by glenngineer above and also in article 50.5 of the CBA (starts at page 266).

In short: [Sum of salary paid with the team] less [Total cap hit with the team] gives the total penalty. That amount is then spread over the remaining years. With the team: cap hit and salary paid while with another team do not affect Nashville.

His new team will have all the incentive to force him to retire early if he is no longer worth his cap hit as they will only incur a limited penalty, if any. See article in OP/link in post #3 which only looks at the Flyers part of the recapture - the penalty becomes negligible for his new team because at some point they are going to be paying him significantly less than his cap hit and therefore reducing their penalty (not Nashville's) until it becomes nil. The only way for Nashville to reduce their penalty in case of a trade would be to retain salary.

[table="head;width=900]Nashville situation|Salary paid|Tot cap hit|Total recapture|2022|2023|2024|2025
remaining salary| | | | 6M| 3M |2M |1M
Never traded||||6.4M x 4y|6.9M x 3y|6.9M x 2y|6.9M x 1y
Traded in 2016| 56M|31.4M|24.6M|6.1M x 4y| 8.2M x 3y| 12.3M x 2y| 24.6M x 1y
Traded in 2017| 68M|39.3M |28.7M |7.2M x 4y| 9.6M x 3y |14.4M x 2y |28.7M x 1y
Traded in 2018| 80M|47.2M|32.8M| 8.2M x 4y| 11.0M x 3y| 16.4M x 2y| 32.8M x 1y
Traded in 2019| 86M|55.0M|31.0M |7.7M x 4y| 10.3M x 3y| 15.5M x 2y| 31.0M x 1y
Traded in 2020|92M|62.9M|29.1M| 7.3M x 4y| 9.7M x 3y |14.6M x 2y| 29.1M x 1y
[/table]