Devils 1st round draft pick forfeiture

[Fugu]

It still makes little sense to me that they would be given a break because the team and Kovalchuk decided to mutually terminate this deal. Clearly the Devils were ok with this. Their gain from this decision was a lot of money they did not have to pay out. Given the financial state of the franchise at the time I don`t see losing Kovalchuk as a massive negative.

Oh, I'm not saying they should get a break. I think they pushed the envelope, but in reality, were not the only team circumventing the intent of the cap system.

Yes, they benefited from Kovalchuk's retirement. That was not a good contract.

What I meant about Lamoriello taking the 29th pick this past season is that he might have believed he could get this year's pick back-- or at least, he's a bit of a gambler and didn't want to close that chance off completely.

 

[Fourier]

Oh, I'm not saying they should get a break. I think they pushed the envelope, but in reality, were not the only team circumventing the intent of the cap system.

Yes, they benefited from Kovalchuk's retirement. That was not a good contract.

What I meant about Lamoriello taking the 29th pick this past season is that he might have believed he could get this year's pick back-- or at least, he's a bit of a gambler and didn't want to close that chance off completely.

You may remember that I was very much of the opinion that the League should have acted wrt some of the other deals. I thought that they should have acted when the Kiprusoff deal was signed.

I agree Lou may have believed, and my still believe that he will get away with this. It is also possible that he felt that the new CBA would help in that regard. It does seem that there was an agreement that the old deals would not be investigated further, though they would be subject to the recapture rule. The problem is Lou managed to get around the recapture so I think the Devils should simply take their lumps and deal with it.

 

[Jack Bauer]

Nitpick: They were punished for attempted cap circumvention. They didn't actually circumvent the cap because the NHL rejected the contract.

Because the NHL has to approve every deal and make sure it's not circumvention.

This was and was punished.

You can nitpick and call it attempted if you like, but the fact is lots of teams attempted circumvention(Vancouver, LA, NJ to name 3) but only 1 was penalized for circumvention(NJ)

 

[Butch 19]

Because the NHL has to approve every deal and make sure it's not circumvention.

This was and was punished.

You can nitpick and call it attempted if you like, but the fact is lots of teams attempted circumvention(Vancouver, LA, NJ to name 3) but only 1 was penalized for circumvention(NJ)

LA?? which player had an "attempted circumvention" as you call it?

 

[billingtons ghost]

And how are Signing Bonuses "circumvention pieces"?

Signing bonuses are treated just like salary when w.r.t. cap hits and the max salary restrictions.

Signing bonuses may have side effects -
- they provided effective "Lockout Insurance" for some players.
- they may provide a UFA/Offer Sheet benefit to big market teams who can more afford to pay more $$$ upfront.
- they shaft other players, since no escrow is withheld from signing bonuses paid before the start of the season.

but cap circumvention is not one of them.

Being able to give out guaranteed money up front years ahead of 'salary', that doesn't translate to your salary cap?

Ok - here's your $100m signing bonus, Kovy, and your 17 year $1m/yr contract.

If the Parise/Suter doesn't violate 'the spirit' of a salary cap - I'm not sure what that spirit is, exactly.

 

[Fugu]

Being able to give out guaranteed money up front years ahead of 'salary', that doesn't translate to your salary cap?

Ok - here's your $100m signing bonus, Kovy, and your 17 year $1m/yr contract.

If the Parise/Suter doesn't violate 'the spirit' of a salary cap - I'm not sure what that spirit is, exactly.

I think Weber's offer sheet was probably one of the worst cases yet. Total value of $110 million and 14 year term. 25% paid out in the first 12 month period (at signing then July 1), or $28 million; 51% paid out in the first 3-4 yrs ($56 million); and 72% paid out by years 5-6 ($80 million).

What makes it especially tough on 'parity' is that much of that money is paid out in lump sum as a signing bonus-- $68 million in total of that $80 million.

 

[Alklha]

Being able to give out guaranteed money up front years ahead of 'salary', that doesn't translate to your salary cap?

Ok - here's your $100m signing bonus, Kovy, and your 17 year $1m/yr contract.

If the Parise/Suter doesn't violate 'the spirit' of a salary cap - I'm not sure what that spirit is, exactly.

Just to be clear, you do understand that signing bonuses count against the cap, yes?

Both Suter and Parise are signed until they are 40, the contracts are "only" 13 years and the final 4 years of the contract still make up over 10% of the value.

Trying to compare that to a 17 year contract taking the player until he is 44 and the final 6 years of salary making up a total of 3% of the contract is just insane. They aren't even comparable. There needs to be a line in the sand, and the expectation of a top player being capable of playing until he is 40 isn't exactly unreasonable in the modern NHL.

They broke the rules, they knew they were breaking the rules when the signed him to that contract and they knew the risk they were taking. For some crazy reason they didn't think the NHL would follow through on their warnings.

 

[tony d]

Yeah, the Devils dug their own grave on this 1. Looks like they'll have to forefeit a pretty high draft pick in the draft next year.

 

[rojac]

Being able to give out guaranteed money up front years ahead of 'salary', that doesn't translate to your salary cap?

Ok - here's your $100m signing bonus, Kovy, and your 17 year $1m/yr contract.

If the Parise/Suter doesn't violate 'the spirit' of a salary cap - I'm not sure what that spirit is, exactly.

I'm not sure what you mean when you say the bolded part.

Your example of a $100M signing bonus followed by 17 years of $1M/yr. would result in total salary of $117M over 17 years or a cap hit of $6.88M.

 

[Riptide]

I'm not sure what you mean when you say the bolded part.

Your example of a $100M signing bonus followed by 17 years of $1M/yr. would result in total salary of $117M over 17 years or a cap hit of $6.88M.

Also, completely ignoring the rules around contract variations. 100m signing bonus plus 1m in salary would result in a 101m salary for that year. Subsequent years cannot drop more than 35%, and lowest year must be at least 50% of highest year.

But I get what you're saying.

 

[kdb209]

Being able to give out guaranteed money up front years ahead of 'salary', that doesn't translate to your salary cap?

Ok - here's your $100m signing bonus, Kovy, and your 17 year $1m/yr contract.

If the Parise/Suter doesn't violate 'the spirit' of a salary cap - I'm not sure what that spirit is, exactly.

Signing bonuses do not give anyone money "up front years ahead of 'salary' ".

There is no, and cannot be any $100M signing bonus.

A signing bonus is nothing more than "salary" paid out in a lump sum (typically on July 1), rather than being paid out over the course of the season.

Signing bonuses are lumped together with salary and subject to the 20% of cap limit (and the total is also subject to the limitations on yr-to-yr changes).

As far as the cap is concerned, there is no real difference between Shea Weber getting the $14M/yr max salary for the first 4 years vs getting a $1M/yr salary and a $13M signing bonus paid each year on July 1. He gets the same money, he just gets it earlier in the year.

As I said, there are side effects to signing bonuses - but they are not cap circumvention.

 

[Wizeman*]

Devils made their own bed. They lie in it. No whining because they finally have to pay up. They were given an easy way out when they had the 29th pick and they chose to draft it anyways.

 

[Fugu]

Signing bonuses do not give anyone money "up front years ahead of 'salary' ".

There is no, and cannot be any $100M signing bonus.

A signing bonus is nothing more than "salary" paid out in a lump sum (typically on July 1), rather than being paid out over the course of the season.

Signing bonuses are lumped together with salary and subject to the 20% of cap limit (and the total is also subject to the limitations on yr-to-yr changes).

As far as the cap is concerned, there is no real difference between Shea Weber getting the $14M/yr max salary for the first 4 years vs getting a $1M/yr salary and a $13M signing bonus paid each year on July 1. He gets the same money, he just gets it earlier in the year.

As I said, there are side effects to signing bonuses - but they are not cap circumvention.

Sure they are if the lump sum is of a gargantuan quantity seeing one of the alleged intents of the cap is to make sure all teams are on relatively equal footing. In essence, Nashville paid its captain the entire year's worth of gate receipts in signing bonuses. Without the ability to massage his cap number with averaging and low paying years at the end, Philly could not have made the offer at all. It was a circumvention of intent in a couple of ways.

 

[kdb209]

Sure they are if the lump sum is of a gargantuan quantity seeing one of the alleged intents of the cap is to make sure all teams are on relatively equal footing. In essence, Nashville paid its captain the entire year's worth of gate receipts in signing bonuses. Without the ability to massage his cap number with averaging and low paying years at the end, Philly could not have made the offer at all. It was a circumvention of intent in a couple of ways.

But that is a completely separate issue than a Signing Bonus - it would be the same whether the Flyers offered $14M salary or $1M salary + $13M bonus. It wasn't fundamentally any different than any of the other pre-Lockout "circumvention" contracts - falling within the legal bounds of the post-Kovy amendments.

The bonuses weren't circumvention. They were more RFA Offer Sheet poison pills (designed to stress Nashville's cash flow and deter them from matching) - similar to the Joe Sakic offer sheet in '97 ($21M/3yrs including a $15M signing bonus) or the Sergei Federov one '98 ($38M/6yrs including a $14M signing bonus and $12M team performance bonus for reaching the Conference Finals in '98).

 

[Fugu]

But that is a completely separate issue than a Signing Bonus - it would be the same whether the Flyers offered $14M salary or $1M salary + $13M bonus. It wasn't really any different than any of the other pre-Lockout "circumvention" contracts - falling within the legal bounds of the post-Kovy amendments.

The bonuses weren't circumvention. They were more RFA Offer Sheet poison pills (designed to stress Nashville's cash flow and deter them from matching) - similar to the Joe Sakic offer sheet in '97 ($21M/3yrs including a $15M signing bonus) or the Sergei Federov one '98 ($38M/6yrs including a $14M signing bonus and $12M team performance bonus for reaching the Conference Finals in '98).

It was the entire structure and amount in play over first 4-6 years of a 14 year term. The benefit to the Flyers was that they could use their financial muscle to offer massive lump sum payments, which clearly would be more difficult for Nashville, combined with inflating that number to the max allowed then further reducing the actual cap hit by adding extra years at the paltry $1 MM levels.

These contracts were all very creative and legal within the rules as written at that time -- as was NJD's SPC to Kovalchuk.