June 15-30 NHL Contract Buyout Period

Discussion in 'The Business of Hockey' started by FanSince2014, Jun 6, 2006.

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  1. FanSince2014

    FanSince2014 What'd He Say?

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  2. jkrdevil

    jkrdevil UnRegistered User

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    The buyouts count against the cap but it can be spread out across 2 seasons I believe.
     
  3. I thought it was half the salary over twice the period of time. Ie a 4 year 20 mil contract would be 5mil cap hit a year for 4 years or if you buy him out a 2.5mil hit over 8 years.
     
  4. kdb209

    kdb209 Registered User

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    Ordinary Buyouts (as opposed to the one time Complience Buyouts last offseason) are pretty much the same as they were under the old CBA:

    2/3's of the remaining salary (1/3 if player is under 26yo) paid out over 2x the remaining number of years on the contract.

    Buyouts do count against the cap, but it is not just a straight forward Buyout Dollars/Buyout Years, due to the way salaries are averaged over multi year deals for cap purposes. If the actual salary paid on the deal prior to the buyout is more than the cap averaged salary for those years (ie the averaging gave them a cap discount), then that discount is counted against the cap over the remaining life of the original contract in addition to the actual buyout dollars over the 2x term. The converse is true - if the amout paid was less than the averaged cap hit, they get a cap credit back against the buyout.

    For all the gory details see Article 50.5 (d) (iii) in the CBA:

     
  5. kdb209

    kdb209 Registered User

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    A couple of other Buyout related tidbits from the CBA:

    Complience Buyouts (50.9 (i)(ii)) one time deal last offseason - paid out over the remaining length (not 2x) and do not count against the team caps or players 54% share.

    Normally Ordinary Buyouts can only be made in the offseason (Regular Period). I assume that this is the 6/15-6/30 period referenced in the initial post. The leaked draft CBA does not contain Exhibit 16 (the Standard Players Contract). Under the old CBA the Buyout Period was from the end of the rgular season to July 1 - Buyouts could not happen during the season under the old CBA.

    Under the new CBA, a team may exercise a limited number of Buyouts outside the Regular Period. It is uncertain from the wording (and lack of Article 16 SPC) whether Buyouts would be allowed during the regular season, or only late in the offseason after arbitration awards (my guess):

     
  6. Irish Blues

    Irish Blues Still on hiatus

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    ;) You're a CBA junkie, you know that?
     
  7. FanSince2014

    FanSince2014 What'd He Say?

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    Wow, thanks for this response.

    I tried to follow along but got lost and can't figure out this simple question.

    What would the cap hit to a team be to buyout a player who has a one year left on a contract that paid $3M per season?

    Thanks.
     
    Last edited: Jun 7, 2006
  8. Jonjmc

    Jonjmc Registered User

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    2 million spread out over 2 years.... assuming the contract also averaged 3 million a year and the player is at least 26, so a cap hit of a million a year.
     
  9. FanSince2014

    FanSince2014 What'd He Say?

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    Is the lockout year included and what about the rollback?

    Let's use Aaron Miller as an example.

    In 2003, he signed a 4 year contract for $3.5M per season.

    He made $3.5M in 2003-04, was slated to make $3.5M for 2004-05, made $2.66M in 2005-06, and is slated to make $2.66M in 2006-07.

    If the Kings buy him out, what will be the cap hit for the Kings?

    Thanks.
     
  10. GSC2k2*

    GSC2k2* Guest

    He would be owed a total of $1.733 million. This would be paid at a rate of $866,500 per year for the next two years. That is the cap hit for each of the next two years.

    I believe ...
     
    Last edited by moderator : Jun 7, 2006
  11. kdb209

    kdb209 Registered User

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    You can ignore anything before the lockout. Existing contracts after the lockout were rolled back the 24% and then averaged over the remaining post-lockout years.

    In your Aaron Miller case - ignore the $3.5M in '03-'04 and the missed lockout season, and just average out the remaining years ($2.66M in '05-'06 and '06-'07, boy that was easy - $2.66M). If the Kings buy him out this offseson, since the actual dollars paid ($2.66M for '05-'06) match the averaged contract amount, there is no need to make any adjustments, so the buyout amount would be 2/3 x $2.66M (remaining salary) paid out over 2 years (2x the remaining term) = $890K/yr in '06-'07 and '07-'08.

    edit: with no rounding it comes to $1,773,333.33 over 2 years = $886,666.66 / yr.
     
  12. FanSince2014

    FanSince2014 What'd He Say?

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    Cool.
    Thanks for the lesson.
     
  13. Lunatik*

    Lunatik* Guest

    i really hate to revive a year old thread but this thread was linked in the CBA FAQ thread so i figured this was the place to ask my question...

    before a player can be bought out do they have to be put on and clear waivers? I have been having this debate with some friends and I am the only one that thinks they do have to be put on waivers before being bought out
     
  14. No One

    No One Registered User

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    Yes they do. (Exhibit 1, Section 13, subsection (a))

    However, players who have a NMC in their contract can reject waivers, and then be bought out.
     
  15. Dave Sparky Allison

    Dave Sparky Allison 2-22-1

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    Can a player still be bought out by his team? or is there only say a 2 week period where teams can buy out players?
     
  16. No One

    No One Registered User

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    There is a second buyout period which begins for a team on the third day after their last arbitration settlement/award. This period lasts for 48 hours. (Exhibit 1, Paragraph 13.c.ii) It is called Ordinary Course Buy-outs Outside the Regular Period. To use this buy-out, a team must have more than 1 arbitration case.

    However, a team is only allowed 3 of these buyouts during the course of the CBA. (Article 11.18)
     
    Last edited: Jul 8, 2007
  17. Mike Farkas

    Mike Farkas Grace Personified

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    Sorry to bring back such an old thread (it's from the CBA FAQ, so I thought it'd be remotely appropiate)...

    This is concerning Ordinary Course Buyouts Outside the Regular Period...

    The CBA says in 11.18
    To me (and I'm no expert), that says that a club with more than one arbitration hearing (I'm assuming that entails the contract actually being settled in arbitration) is eligible to pursue this type of buyout. Teams with 0 or 1 arbitration hearings may not.

    Now according to a recent Boston Globe article:
    Off the top of my head, the Bruins only have one arbitration case (Wideman) and if he settles, they would obviously have none...so, am I misinterpreting this clause or is there more to it in other parts of the CBA or... what's the deal here?
     
  18. kdb209

    kdb209 Registered User

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    Cut-and-Pasting from a post in a Goc elects arbitration thread:

     
  19. Tinalera

    Tinalera Registered User

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    Okay, more learning here for me :) So, according to that passage just quoted, that if a player isn't bought out during that time, then they cannot be bought out until the next buyout period.

    I always thought that a player could be bought out at anytime, but from the way I'm understanding it, that's not the case-that players who start the season on their respective team, if they have an NMC, can only be moved if they waive, but they can't be bought out until the next period?


    Hope I'm being clear.
     
  20. kdb209

    kdb209 Registered User

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    Correct - a player CANNOT be bought out during the season.

    The only two periods when a player can be bought out are June 16-30 (the Regular Period) and a 48 hr window starting 3 days after a teams last arbitration case is settled ("Ordinary Course Buy-Outs Outside the Regular Period").
     
  21. Tinalera

    Tinalera Registered User

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    And this second period can only be done if a certain amount of arbitration cases are going on with that team.

    Also team is only allowed 3 buyouts-and that's during the life of the current CBA?

    Now I see why it's not so easy to just "buyout all the players" one doesn't like.

    I used to just read the fan boards of the various teams. I've been getting into the business boards and it's fascinating to learn that it's not so simple when fans post "Buyout X amount player, get rid of him!" and other stuff that we'd like a certain team to do. It's not always that simple.

    Interesting having "peeked behind the curtain", I don't read the "nonbusiness" threads in the same way now. :)

    Thanks for being patient with a relative newbie to the business boards :)
     
  22. kdb209

    kdb209 Registered User

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    The second period is allowed in all situation where a team has an arbitration case - except in the case where the team has only one case and it was for a team-elected arbitration in lieu of extending a QO (under CBA Article 12.3(a)). See my post above clarifying why it is not "two or more arbitration cases" as has generally been assumed.

    The limit of three buyouts during the life of the CBA does not apply to all buyouts - only to buyouts during that second window ("Ordinary Course Buy-Outs Outside the Regular Period").

     
  23. Tinalera

    Tinalera Registered User

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    Thanks for the clarification.

    You sound like you know the CBA like the back of your hand-impressive :) Obviously you've done just a tad of research with it ;)
     
  24. rabi

    rabi Registered User Sponsor

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    Settle a bet: If a player is bought out June 16th, doesn't he have to wait til July 1st to sign with a new team?
     
  25. mouser

    mouser Business of Hockey

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    A bought out player immediately becomes a UFA, and therefore is free to sign with any team at any time. Buyout details are the CBA Exhibit 1, Standard Player Contract paragraph 13 [page 251] www.nhl.com/cba/2005-CBA.pdf

    To date I don't recall a team signing a bought out player until July, but I don't see any prohibition on doing so.

     

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