What determines the max payroll amount that can be offered in a front loaded deal?

Discussion in 'The Business of Hockey' started by joshjull, Jul 16, 2007.

  1. joshjull

    joshjull Moderator

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    What determines the max payroll amount that can be offered in a front loaded deal?

    Is it the average cap hit or the actually salary?

    Could a team offer a deal that in actual salary exceeds the max amount but the cap hit for the deal is in compliance?
     
  2. Irish Blues

    Irish Blues Worth waiting for :)

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    The maximum salary in any one year that can be offered is 20% of the Upper Limit in the League Year that the contract is being offered. In other words, for any contract offered between now and June 30, 2008 the most any one year's salary can be is $10.06 million, regardless of whether or not the Upper Limit will go up (or down) in any future League Year.

    So ... no - a team couldn't offer more than the maximum allowable salary but have the Averaged Salary be in compliance. (There's an example of this in the CBA.)
     
  3. joshjull

    joshjull Moderator

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    Thanks for the info.
     
  4. Blue Dragon

    Blue Dragon Registered User

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    How about bonuses though IB? I hate to sound like an idiot, but I may here. For example, could a team offer a UFA a $20mm signing bonus for a 10-year contract paying $2m each year, making it a $4m cap hit plus giving trade flexibility late in the deal?
     
  5. Irish Blues

    Irish Blues Worth waiting for :)

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    Bonuses (even performance bonuses) count toward that yearly max - so no, a team couldn't give a player a $2 million salary but a $10 million signing bonus so he'd get $12 million in a year, thus getting around the current $10.06 million yearly maximum.

    However ... in your scenario, it would work - because the signing bonus is spread out over the life of the contract, and thus payable yearly over the life of the contract and not all at once. [Because if it were all payable at once, it would have to be counted in the current year's salary ... and thus would be in violation of Article 50 as described above.]
     

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