Could the NHL ever have contracts that were a minimum value + % of the cap?

[Merrrlin]

Not possible under CBA. Considering how little NHL actively looks to grow the game on HRR side(BAM tech deal not HRR) beyond incrementally, I don’t know why a player would want that kind of deal.

No, because NHL cap rules don't allow a player's cap hit to change from one year to the next.

The player's cap number is the Average Annual Value of the contract, or AAV. A fixed number.

NFL contracts though, their cap number is based on the contract value of each season individually. The reason they can do this? Their contracts are not fully guaranteed.

They do have "guaranteed" stipulations that get put into contracts, but it's very rare that NFL players get the full value of the contracts they sign, unlike the NHL.

The player's salary doesn't have to be fixed, but his cap hit does.

Ie, a three year contract could break down as such: $2m yr1, $3m yr2, $4m yr3. Cap hit for all three seasons would be $3m.

I meant could we see it one day as a plausible option.

 

[Hockey4Lyfe]

What? No.

Basically, when you sign a new deal you don’t sign it for $Xm a year but you sign it for X% of the cap. Your Crosby’s of this world will sign for 10/15% or whatever it turns out to be, your JJ’s get 4/5%.

And like I said, that won’t ever work. No one will ever see themselves on an equal playing field as another player.

 

[1865]

And like I said, that won’t ever work. No one will ever see themselves on an equal playing field as another player.

I'm not sure i understand what you mean. Right now players go into contract negotiations and make comparisons against existing players and contracts to justify their demands. That's why it's always a negotiation. Settling on a financial figure is a direct comparison to others signed recently on that amount as it is, this would change nothing to that regard.

What it would do is make negotiations more straight forward and give a little cost certainty to all GMs. It'd be tougher to run into cap trouble if you're working to a % than a dollar amount.

 

[Hockey4Lyfe]

I'm not sure i understand what you mean. Right now players go into contract negotiations and make comparisons against existing players and contracts to justify their demands. That's why it's always a negotiation. Settling on a financial figure is a direct comparison to others signed recently on that amount as it is, this would change nothing to that regard.

What it would do is make negotiations more straight forward and give a little cost certainty to all GMs. It'd be tougher to run into cap trouble if you're working to a % than a dollar amount.

Yeah. You are saying a bunch of words but saying nothing on how they would go about figuring out the percentage of cap a certain player would actually get or any type of formula for it all.

 

[Just Linda]

For a large part, agents do negotiate based on a percentage. You hear it all the time when analysts talk about contract negotiations. Agent said X player made this certain percentage of the cap, my player should make similar to that. Arbitrators consider it as well. Its a fair negotiation tactic.

So if my team had an elite sniper, the agent would try to find comparables eh. An agent would of course bring up Ovi as a comparable, he makes roughly 9.5 million per year but the agent is going to look at the 16ish% of the salary cap that his contract took of that year. So the agent would instead say that an Ovi comparable should make 13+ million per year. Obviously my math is weak but yeah.

So is it possible to have straight up % of cap contracts? No but we do have them negotiated as if they are.

 

[Merrrlin]

For a large part, agents do negotiate based on a percentage. You hear it all the time when analysts talk about contract negotiations. Agent said X player made this certain percentage of the cap, my player should make similar to that. Arbitrators consider it as well. Its a fair negotiation tactic.

So if my team had an elite sniper, the agent would try to find comparables eh. An agent would of course bring up Ovi as a comparable, he makes roughly 9.5 million per year but the agent is going to look at the 16ish% of the salary cap that his contract took of that year. So the agent would instead say that an Ovi comparable should make 13+ million per year. Obviously my math is weak but yeah.

So is it possible to have straight up % of cap contracts? No but we do have them negotiated as if they are.

This is true, but I find the idea of a ironclad link to the cap to be really interesting. I think the NHL should look at it in the future.

 

[tarheelhockey]

Yeah. You are saying a bunch of words but saying nothing on how they would go about figuring out the percentage of cap a certain player would actually get or any type of formula for it all.

Same as any other contract, they’d negotiate it. Maybe a lower-end guy is worth 1% of the cap, but he can get 1.3% if he signs longer term. Maybe a superstar is worth 12% but he’ll take 11.5% to play on a contender.

They’d sort it out, there’s no expectation of a specific formula telling players what they can and can’t earn.

 

[Hockey4Lyfe]

Same as any other contract, they’d negotiate it. Maybe a lower-end guy is worth 1% of the cap, but he can get 1.3% if he signs longer term. Maybe a superstar is worth 12% but he’ll take 11.5% to play on a contender.

They’d sort it out, there’s no expectation of a specific formula telling players what they can and can’t earn.

So you are arguing doing the exact same thing that they do now but just say it’s a percentage of the cap instead of dollars?

 

[tsujimoto74]

Just absolutely outrageous and crazy that they would do that for that long. They have to have an out.

With how freaky injuries can get in the NFL, imagine having dead money on your salary cap for 7-8 years because some stupid shit happened to your QB and he had to retire. That would be franchise crippling.

The NFL doesn't have guaranteed contracts like the NHL does. Plus, I'm sure a large portion of the contract is tied to roster bonus, i.e., he has to be on the team to get paid.

 

[Hockey4Lyfe]

The NFL doesn't have guaranteed contracts like the NHL does. Plus, I'm sure a large portion of the contract is tied to roster bonus, i.e., he has to be on the team to get paid.

Lol he will be on the team throughout his contract. I can guarantee that unless of injury.

Also, something like $150 million is guaranteed for injury. The NHL will never come anywhere close as to the money and salary that American football has in it.

 

[tarheelhockey]

So you are arguing doing the exact same thing that they do now but just say it’s a percentage of the cap instead of dollars?

Basically, yes. The idea is that a player’s contract would calculate his pay rate as a percentage of the cap. What he actually gets paid would go up (and potentially down) based on where the cap gets set each year.

Under the proposed system, on an $81.5M cap a $3M contract would translate to something like a “3.7% contract”. If the cap were rising a little each year, my 3.7% contract would pay out like this:

81.5M cap = $3.00M
84.0M cap = $3.09M
87.5M cap = $3.22M

As long as revenues are going up, I’ll make more and more money. But if a coronavirus situation happens and the cap freezes, so does my paycheck.

This would be a huge benefit to owners (cost management) and GMs (cap management). It would keep the league out of trouble in emergencies, and it would probably reduce the number of bad contracts in the league by keeping GMs from making dumb gambles about how the cap will look in the future.

If the players are smart, they could use this as a lever to get rid of escrow. Tie the percentages to the cap, not to actual revenue. Get a full paycheck on time, every time. That might be worth giving up the potential for a few guys to score bloated cap-busting contracts.

The biggest hurdle is simply that the current CBA won’t allow it, followed closely by the fact that such a system can only work if all contracts are set up this way. So it would take a complete re-build of the CBA to make it happen, and historically that has meant a bunch of collateral damage as they duke it out.

 

[tarheelhockey]

Lol he will be on the team throughout his contract. I can guarantee that unless of injury.

I mean, Cam Newton got cut at age 30, only 4 years after winning league MVP.

Mahomes’ contract runs 10 years, to age 34. A lot can happen, especially injury. If anything it’s a lot more likely he cashes in on that injury bonus than on the roster bonus.

 

[Hockey4Lyfe]

I mean, Cam Newton got cut at age 30, only 4 years after winning league MVP.

Mahomes’ contract runs 10 years, to age 34. A lot can happen, especially injury. If anything it’s a lot more likely he cashes in on that injury bonus than on the roster bonus.

And Newton was cut because of injuries. Like I said in the original post.

 

[Lil Sebastian Cossa]

Basically, yes. The idea is that a player’s contract would calculate his pay rate as a percentage of the cap. What he actually gets paid would go up (and potentially down) based on where the cap gets set each year.

Under the proposed system, on an $81.5M cap a $3M contract would translate to something like a “3.7% contract”. If the cap were rising a little each year, my 3.7% contract would pay out like this:

81.5M cap = $3.00M
84.0M cap = $3.09M
87.5M cap = $3.22M

As long as revenues are going up, I’ll make more and more money. But if a coronavirus situation happens and the cap freezes, so does my paycheck.

This would be a huge benefit to owners (cost management) and GMs (cap management). It would keep the league out of trouble in emergencies, and it would probably reduce the number of bad contracts in the league by keeping GMs from making dumb gambles about how the cap will look in the future.

If the players are smart, they could use this as a lever to get rid of escrow. Tie the percentages to the cap, not to actual revenue. Get a full paycheck on time, every time. That might be worth giving up the potential for a few guys to score bloated cap-busting contracts.

The biggest hurdle is simply that the current CBA won’t allow it, followed closely by the fact that such a system can only work if all contracts are set up this way. So it would take a complete re-build of the CBA to make it happen, and historically that has meant a bunch of collateral damage as they duke it out.

To make this happen, bye bye 2020-2021 season or 2021-2022 season... whenever the next full season would be set to go.

 

[tarheelhockey]

And Newton was cut because of injuries. Like I said in the original post.

Right, I read that, but injuries are part of life in the NFL. Saying "I guarantee he'll be on the roster unless he gets hurt" is like saying "I guarantee I'll keep my job unless I get laid off". You're casually eliminating the main reason that it would turn out the other way.

Combine the likelihood of creeping injuries with the fact that he'll carry a $60 million cap hit at age 31, and it's very easy to see a future where even just a series of small dings could make him a question mark to stay on the roster past 30. It seems unlikely right now when he's at his moment of stardom, but 5 years ago we were talking about the future belonging to Cam Newton, Andrew Luck, RGIII, and Colin Kaepernick.

If Mahomes has a normal career with normal injuries and a normal aging process, he's at least as likely to cash in on that $150M injury bonus as he is to make it to the full $337M roster bonus.

 

[North Cole]

Basically, yes. The idea is that a player’s contract would calculate his pay rate as a percentage of the cap. What he actually gets paid would go up (and potentially down) based on where the cap gets set each year.

Under the proposed system, on an $81.5M cap a $3M contract would translate to something like a “3.7% contract”. If the cap were rising a little each year, my 3.7% contract would pay out like this:

81.5M cap = $3.00M
84.0M cap = $3.09M
87.5M cap = $3.22M

As long as revenues are going up, I’ll make more and more money. But if a coronavirus situation happens and the cap freezes, so does my paycheck.

This would be a huge benefit to owners (cost management) and GMs (cap management). It would keep the league out of trouble in emergencies, and it would probably reduce the number of bad contracts in the league by keeping GMs from making dumb gambles about how the cap will look in the future.

If the players are smart, they could use this as a lever to get rid of escrow. Tie the percentages to the cap, not to actual revenue. Get a full paycheck on time, every time. That might be worth giving up the potential for a few guys to score bloated cap-busting contracts.

The biggest hurdle is simply that the current CBA won’t allow it, followed closely by the fact that such a system can only work if all contracts are set up this way. So it would take a complete re-build of the CBA to make it happen, and historically that has meant a bunch of collateral damage as they duke it out.

Went back and forth with another poster on the trade boards about floating contract values. It has benefits but I'm not sure they outweigh the issues.

Wouldnt locking in as a % of cap and removing escrow result in a lower cap? Escrow covers the owners ass spending near the cap each year, if HRR falls short, they get money back. Otherwise teams are just spending a 15% premium on your wages. I dont see why the owners wouldnt calculate HRR and set the cap at the current adjusted midpoint, rather than dole out extra money.

Players obviously try to get more money upfront because the contract loses value over time (unless the cap goes the other way). McDavid signs at X% in year 1 with the expectation that it will be a lower % in year 8. But under the new system, the assumption (not necessarily yours) is that the player would sign for less value today because the contract appreciates against the cap as it rises, so they are protected.. I dont think that assumption is credible. There is forecast risk associated with projecting the cap 8 years out. Although the system benefits the player by reducing salary and escrow in the future if something like Covid happens, it also incentivizes players to take larger % contracts, because it will protect their salary against downturns. So while some people might say - "you're guaranteed more money as the cap goes up", the player might want to guarantee more money as the cap decreases, especially with escrow out the window - because now their wage is their wage.

I'm not convinced it's good for the UFA market, players would now want to sign for as much term as possible, and in situations where the majority of contracts remain on the books - teams near the cap stay there. Hard to replace players, even depth if 85% of your contracts rise in value each year. Normally you might get some breathing room for schedule A bonuses, etc, if the cap goes up 2 million. Not in this case.

It may be cost certainty, but from a cash flow perspective, it's not exactly fixed outflows. I'm not exactly sure how close the signing bonus payout and cap announcement dates are. Elimination of escrow would probably make the accounting for "personal holding companies" easier. I just dont know how they eliminate escrow but keep the cap 15% above the midpoint.

Idk, the logistics of it seem nearly impossible and the other poster just made a bunch of assumptions that he never qualified, claiming if you didnt get it you were too dumb. Not your fault, but I do see some distinct issues with the system, and like you said, its not even possible in the current CBA

 

[tsujimoto74]

Lol he will be on the team throughout his contract. I can guarantee that unless of injury.

Also, something like $150 million is guaranteed for injury. The NHL will never come anywhere close as to the money and salary that American football has in it.

Your original post specifically mentioned injuries, as if an NFL team is stuck with dead cap whenever a player gets hurt to the point their playing ability is permanently harmed. I'm just responding to what you wrote.

 

[danpantz]

This hasn't been mentioned yet but the Chiefs have an out clause in every year of this contract. There's a date ever year where they can cut off the rest of the contract but it guarantees the next year of the contract.

 

[LuckyDay]

The NFL also has the Roughing the Quarterback rule which they call on a dime now, so they have one set of rules for the quarterback and another set of rules for everyone else. Its similar to goaltender interference but far more strict. Its more like if there was another set of rules for star forwards that scrubs were deliberately trying to injure.

 

[1865]

Yeah. You are saying a bunch of words but saying nothing on how they would go about figuring out the percentage of cap a certain player would actually get or any type of formula for it all.

You’re weirdly aggressive.

The only bit I don’t know is the transition period. It would be difficult to go from $ value to % value, but i don’t really understand your opposition.

The % negotiation would work exactly the same way it currently does. Right now a player comes to the table with his agent and says “I want $X over X years” and that figure is calculated based against the cap limit. Hence the biggest deals going up in dollar value as the cap has risen. All this would do is set it in stone.

 

[Bandit]

Rumors of a % were false.

But god damn 140 Mil injury guarantee

Pretty insane. This dude could buy my house that I have a 30 year loan on in cash with a fraction of a paycheck. I picked the wrong career...

 

[LeapOnOver]

I doubt he would get the 140m injury guarantee with an injury like that, that was sustained in a non football way.

Alright, I'll slam it in the door of my locker until it's mangled and unusable.

 

[TaLoN]

Basically, yes. The idea is that a player’s contract would calculate his pay rate as a percentage of the cap. What he actually gets paid would go up (and potentially down) based on where the cap gets set each year.

Under the proposed system, on an $81.5M cap a $3M contract would translate to something like a “3.7% contract”. If the cap were rising a little each year, my 3.7% contract would pay out like this:

81.5M cap = $3.00M
84.0M cap = $3.09M
87.5M cap = $3.22M

As long as revenues are going up, I’ll make more and more money. But if a coronavirus situation happens and the cap freezes, so does my paycheck.

This would be a huge benefit to owners (cost management) and GMs (cap management). It would keep the league out of trouble in emergencies, and it would probably reduce the number of bad contracts in the league by keeping GMs from making dumb gambles about how the cap will look in the future.

If the players are smart, they could use this as a lever to get rid of escrow. Tie the percentages to the cap, not to actual revenue. Get a full paycheck on time, every time. That might be worth giving up the potential for a few guys to score bloated cap-busting contracts.

The biggest hurdle is simply that the current CBA won’t allow it, followed closely by the fact that such a system can only work if all contracts are set up this way. So it would take a complete re-build of the CBA to make it happen, and historically that has meant a bunch of collateral damage as they duke it out.

Such a system would benefit star players, hurt much of the rest salary-wise. No way would the NHLPA vote for this.

 

[Oddbob]

10+ years and $400 million+

There’s too much money in America

And all that to play a measly 16 games a year and maybe less than a handful of playoff games! That is 2 mil a game if you add 4 playoff games per year and more if you don't! CRAZY!

 

[Syckle78]

Yeah. You are saying a bunch of words but saying nothing on how they would go about figuring out the percentage of cap a certain player would actually get or any type of formula for it all.

What are you talking about? it would be the same thing as actual dollars except change dollars to a percentage. It's not as complicated as you're imagining.