CBA Loophole

[RangerBoy]

From Ken Campbell of the Toronto Star

The NHL was very careful to close off any potential loopholes in the new collective bargaining agreement, but teams are already discovering they can find some extra room under the salary cap with some creative accounting.

Under the terms of the new deal, the salary a player is designated under the cap is not necessarily his actual salary for that season, but whatever the average salary is for the term of his contract. But what makes it interesting is that option years count in the average and that's where teams can conceivably create some breathing space for themselves.

The Keith Tkachuk contract, the poster boy for bad deals that were done long before the lockout, has emerged as a good example. After the 24 per cent rollback, Tkachuk is due $7.6 million this season as long as he doesn't get suspended again for being too fat. But the deal also calls for a $3.8 million team option next season the St. Louis Blues almost certainly will not pick up. The average of those two years is $5.7 million, so the Blues actually save almost $2 million in cap space.

There is a caveat, however. Teams are not allowed to sign a player to an option year at less than 50 per cent of the average of the guaranteed years

http://www.thestar.com/NASApp/cs/Co...8&call_pageid=1044442959412&col=1044442957278

So the Blues cap hit for 2005-06 is $5.7 million instead of $7.6 million and they are not hit with the other $5.7 million for 06-07 when the Blues don't pick up the option

Click to read more...

 

[Hawker14]

interesting.

i disagree with the article in that the blues won't pick up tkachuk's option at $ 3.8 million. he's still an excellent hockey player.

has there been anything from the blues that they may not pick up his option ? (honestly asking as i don't know)

 

[X8oD]

thats not really a loophole.

Its just going to effect players who are towards the end of thier career who sign long term deals.

there is no way you are going to get a young star to sign a long term deal, with a team option year worth half his yearly salary going in. But you can get a guy like Tkachuk, or Shanahan, or Roenick or countless other low to mid 30 aged players to do it.

 

[Steve L*]

I thought option years were not allowed at all in the new CBA so this will only be an issue for pre new CBA signed contracts.

 

[Resolute]

That was what I thought too.

Regardless, this is clearly a case of a preexisting contract conflicting with the new CBA. It is hardly a loophole, and I completely fail to see how this can be called "creative accounting" on the part of the Blues when they had to do no accounting at all.

 

[futurcorerock]

interesting.

i disagree with the article in that the blues won't pick up tkachuk's option at $ 3.8 million. he's still an excellent hockey player.

has there been anything from the blues that they may not pick up his option ? (honestly asking as i don't know)

If by excellent you mean fat, I totally agree

 

[boredmale]

you would assume that if the team doesn't pick up the option year, they would forward that extra cap expense to the next year(ie in Tkachuk's case, if they don't pick up that 3.8 million option, the Blues will be charged 2 million next year for the cap).

 

[Guy Legend]

From Ken Campbell of the Toronto Star



http://www.thestar.com/NASApp/cs/Co...8&call_pageid=1044442959412&col=1044442957278

So the Blues cap hit for 2005-06 is $5.7 million instead of $7.6 million and they are not hit with the other $5.7 million for 06-07 when the Blues don't pick up the option

The Blues not likely to pick up the $3.8 million option? Is Ken Campbell an idiot?

The Blues will pick up the option with out any hesitation. They could keep him for that price (a steal) or trade him.

 

[PecaFan]

So the Blues cap hit for 2005-06 is $5.7 million instead of $7.6 million and they are not hit with the other $5.7 million for 06-07 when the Blues don't pick up the option

Which is exactly why I said all along it's silly to average. If you pay someone $7.6, the cap hit should be $7.6. I've yet to hear a good reason why a team should have a cap hit of $5.7 twice, when in neither year they paid that, it's $2 mill over one year, then $2 mill under the other.

 

[Kimi]

If you can still have option years, I can see team giving a player a contract for how ever long thay want and then add a player option year to it. This would mean the team doesn't have to make a agreements with the player to not pick it up, and they get the player cheeper on the cap.

 

[McJadeddog]

arent options not allowed (player or team) under the new CBA?

 

[Steve L*]

arent options not allowed (player or team) under the new CBA?

From what Ive read, theyre not which means this isnt a a loophole for long.

 

[RangerBoy]

From what Ive read, theyre not which means this isnt a a loophole for long.

Could you provide the link to option years not being allowed in the CBA?I don't think that is the case

 

[RangerBoy]

The Blues not likely to pick up the $3.8 million option? Is Ken Campbell an idiot?

The Blues will pick up the option with out any hesitation. They could keep him for that price (a steal) or trade him.

Why is Campbell an idiot?Maybe Dave Checketts will want to start fresh and let Tkachunk walk.Campbell is one of the best hockey writers in the business

 

[RangerBoy]

Nolan's deal for the 2005-06 season is a player option and while Nolan's agent J.P. Barry exercised the option several weeks ago, the league voided all player options when the new collective agreement came into effect, decreeing they must be refiled by Thursday

http://www.thestar.com/NASApp/cs/Co...ageid=968867503640&col=970081593064&t=TS_Home

Barry refiled the Nolan player option for 05-06 and filed the grievance against Toronto.Team and player options are still part of the new NHL CBA

 

[victor]

http://www.thestar.com/NASApp/cs/Co...ageid=968867503640&col=970081593064&t=TS_Home

Barry refiled the Nolan player option for 05-06 and filed the grievance against Toronto.Team and player options are still part of the new NHL CBA

Prior options were grandfathered into the new CBA.

That said - it's pretty much a moot point, as I do not see Kovalchuk, Hossa, Iginla, et al., signing a freebie option year into their contracts.

 

[Steve L*]

Could you provide the link to option years not being allowed in the CBA?I don't think that is the case

Search HF, I cant be arsed.

 

[Burke's Evil Spirit]

Which is exactly why I said all along it's silly to average. If you pay someone $7.6, the cap hit should be $7.6. I've yet to hear a good reason why a team should have a cap hit of $5.7 twice, when in neither year they paid that, it's $2 mill over one year, then $2 mill under the other.

"What's that, Dominik? You're going to retire after this year? Well, I'll sign you to a 1-year deal worth $2.5 million, and give you, oh, 500 team options after at $1.25 million each. Sound like a plan?"

 

[HeavyD]

If this is true, then what it to stop 'player option' contracts being given to young stars with say 6mil/4 yrs, +2/yrs 3mil option. 5 mil hit, instead of 6. Instead of having that 500k guy, a team could now have a 1.5mil guy. Then renegotiating the contract when the 4 years are up.

 

[Resolute]

Logically, there is language in the deal that prevents that, otherwise there would have been several teams already who would have signed deals exactly like that, as it is a pretty obvious loophole.