Contract question

Discussion in 'Fugu's Business of Hockey Forum' started by LeHab, Dec 3, 2005.

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  1. LeHab

    LeHab Registered User

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    First Scenario :

    Let say a player signs a 2 year contract

    1st year he is making $ 5M
    2nd year he is making $ 1M

    According to the new CBA, it would mean $ 3M/year on the salary cap.

    If the team decides to trade the player after one year, does the other team has to allocate $3M for the salary cap or is it just $ 1M ?


    Second Scenario :

    Same type of contract

    But this time after one year the team "feels generous" and decides to renegotiate the remaining year. Let say instead of paying $ 1M, they want to pay him $ 6M.

    Do they have to allocate $ 6M for the salary cap or is it $ 5M (difference between the old and new new) + $ 3M (from the old contract) = $ 8M ?
     
  2. kdb209

    kdb209 Registered User

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    The player's new team only has to pay him $1M, but will still have a cap hit of $3M.
    Contracts cannot be renegotiated under the new CBA.

    From the NHL New CBA FAQ:

     
  3. LeHab

    LeHab Registered User

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    In that case I'm assuming it is impossible to buy out a contract anymore ?

    thanks for the info
     
  4. Flukeshot

    Flukeshot Hextall Activate!

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    Contracts can still be bought out. It is a protective issue for in case a team really is over the cap and has no option but to buy-out players.

    I believe that a player can be bought out at 2/3 his contract, but this still counts against the team's cap count. However I think it is done in a different way than just straight up counting against it. I think it was something like over 3 years? Someone else will have to clarify that.
     
  5. kdb209

    kdb209 Registered User

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    The buyout terms under the new CBA are the same as those under the old one.

    A player under 26 yo gets 1/3 of the total dollars reamining on the contract.
    A player 26 yo or older gets 2/3 of the total dollars remaining.
    The money is paid out over 2x the term remaining on the contract.
    The player must clear waivers before the Buy Out can be offered.
    Buyouts can only occur during the offseason (normally a July 1 deadline).

    This year was a special case - there was a week long buyout window in July - and any buyouts did not count against the cap. Any future buyouts will count against the cap, although with a lower annual cap hit - 2/3's the salry paid out over 2x the years.

    A contract buout is not any form of contract renegotiation. All of the buyout terms are included as part of the Standard Players Contract.
     
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