Front Loaded Retirement Contracts

CupfortheSharks

Registered User
Sponsor
Mar 31, 2008
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San Jose
I know the league was cracking down on these type of contracts and some rules, or at least precedents, were set. I’m hoping someone here knows the specifics.

Joe Pavelski will be UFA after this season. He will will be able to sign an under 35 contract. So, he can retire early and it will have no effect on the Sharks cap. If the Sharks wanted to sign him to a long term but front loaded deal to minimize his cap hit, how far could they go?

For example: Could the Sharks sign him to an 8 year deal with salaries of 10, 8, 6, 4, 2, 1, 1, and 1? That’s $33M for 8 years with a cap hit of 4.125. If Pavs retires after 4 years he will be paid 28M and his cap hit will go away. Is that the best way to break it down? Is there any benefit to signing bonuses and performance bonuses vs salary?
 

VikingAv

Mediiic!!
Jun 18, 2006
3,859
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Norway
I know the league was cracking down on these type of contracts and some rules, or at least precedents, were set. I’m hoping someone here knows the specifics.

Joe Pavelski will be UFA after this season. He will will be able to sign an under 35 contract. So, he can retire early and it will have no effect on the Sharks cap. If the Sharks wanted to sign him to a long term but front loaded deal to minimize his cap hit, how far could they go?

For example: Could the Sharks sign him to an 8 year deal with salaries of 10, 8, 6, 4, 2, 1, 1, and 1? That’s $33M for 8 years with a cap hit of 4.125. If Pavs retires after 4 years he will be paid 28M and his cap hit will go away. Is that the best way to break it down? Is there any benefit to signing bonuses and performance bonuses vs salary?

No, this is not possible anymore. Believe it was changed during the last lockout. Iirc, the year with the smallest salary can't be less than 50% of the year with the highest salary/bonus.
 
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StreetHawk

Registered User
Sep 30, 2017
25,607
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I know the league was cracking down on these type of contracts and some rules, or at least precedents, were set. I’m hoping someone here knows the specifics.

Joe Pavelski will be UFA after this season. He will will be able to sign an under 35 contract. So, he can retire early and it will have no effect on the Sharks cap. If the Sharks wanted to sign him to a long term but front loaded deal to minimize his cap hit, how far could they go?

For example: Could the Sharks sign him to an 8 year deal with salaries of 10, 8, 6, 4, 2, 1, 1, and 1? That’s $33M for 8 years with a cap hit of 4.125. If Pavs retires after 4 years he will be paid 28M and his cap hit will go away. Is that the best way to break it down? Is there any benefit to signing bonuses and performance bonuses vs salary?
I know that the last cba the recapture rule was for contracts that had already been signed before the current cba went into effect. If the dea was longer than 6 years your team was subject to recapture.

So kipper in Calgary who was on a 6 year dea ended up retiring without playing his final year which was to pay him $1 million. No cap recapture for the flames.

But in terms of contracts being signed with the current cba they have imposed stricter limits on the difference between annual compensation. No more $1 million only in the final year for example (total not just salary).

I think that any money that you have been paid over and above your cap hit was to be taken. Not certain on that, but since they imposed the 8/7 year limit the nhl doesn’t want teams to get around paying players more than the cap hit they have taken and let the difference just go away.
 

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