News: Luongo retires, Vancouver hit with cap recapture penalty

[Frank Drebin]

I'm sorry if this has been answered already, but why is the recapture hit higher if the player retires later rather than earlier?

The total cap advantage for the team must be zero.

For simplicity sake lets say its a 5 year deal

10m
10m
10m
2.5m
2.5m

Total 35M, AAV of 7.0

In the first three years the team enjoys a cap advantage of 3 m per year. Or, +9m over 3 years. Cap advantage meaning they have a 10m player on their roster for a 7m hit.

Over the next two years they have a cap disadvantage (lower paid player on a higher hit) of 4.5 m per year, or -9m over 2 years. So they equal out.


If the team traded him after year 3 they enjoyed the cap benefit without the cap disadvantage, thus the entire 9m must be "paid back" over the years remaining in the contract. Its simple to a fault.

 

[clunk]

This penalty is amazing timing. Might actually save us from a long term crippling contract.

Thanks Luongo.

 

[HandshakeLineRespect]

For one thing Bud, everything I posted was a fact. And what's with this straw man argument crap? What I basically said was, how can Vancouver be mad about something they voted for or agreed to? And for the record kid, I'm 53 years old.

Dude you were arguing against things I never even said what don’t you understand about that. Go yell at some clouds.

 

[WHISTLERNATE]

This is a little blown out of proportion in my eyes. The Canucks have enough cap space for the next 2 years to work through this. Year 3 will be tougher, especially of the cap doesn't go up. Would have been way worse had Luongo played 2 more years and then retired.

The league will enforce this rule, and it will have a little, but not crazy impact on the Canucks. If they enforce this on Vancouver, then they are going to have to enforce the same penalty on Nashville when it comes up in a few years with Shea Webber. That is a possibly franchise crippling number. I think the league is digging their heals in on the wrong issue.

 

[SladeWilson23]

The total cap advantage for the team must be zero.

For simplicity sake lets say its a 5 year deal

10m
10m
10m
2.5m
2.5m

Total 35M, AAV of 7.0

In the first three years the team enjoys a cap advantage of 3 m per year. Or, +9m over 3 years. Cap advantage meaning they have a 10m player on their roster for a 7m hit.

Over the next two years they have a cap disadvantage (lower paid player on a higher hit) of 4.5 m per year, or -9m over 2 years. So they equal out.


If the team traded him after year 3 they enjoyed the cap benefit without the cap disadvantage, thus the entire 9m must be "paid back" over the years remaining in the contract. Its simple to a fault.

Thanks! Makes sense now!

 

[cowboy82nd]

Dude you were arguing against things I never even said what don’t you understand about that. Go yell at some clouds.

The clouds don't talk back .

 

[HandshakeLineRespect]

The clouds don't talk back .

Fair point. We still buds right.

 

[Beukeboom Fan]

The total cap advantage for the team must be zero.

For simplicity sake lets say its a 5 year deal

10m
10m
10m
2.5m
2.5m

Total 35M, AAV of 7.0

In the first three years the team enjoys a cap advantage of 3 m per year. Or, +9m over 3 years. Cap advantage meaning they have a 10m player on their roster for a 7m hit.

Over the next two years they have a cap disadvantage (lower paid player on a higher hit) of 4.5 m per year, or -9m over 2 years. So they equal out.


If the team traded him after year 3 they enjoyed the cap benefit without the cap disadvantage, thus the entire 9m must be "paid back" over the years remaining in the contract. Its simple to a fault.

Drebin - doesn't this artificially reduce the $'s available for the NHLPA though? In your example if the player retires after year 4, he was paid a total of $32.5 and his cumulative cap hit was $28M, with a resulting difference of $4M. By reducing team #1's cap by $9M, it seems like the NHLPA are "losing out" on the $5M difference. (I get that this $5M really just reduces the amount withheld in escrow, but it seems strange that the PA would agree to this.)

 

[Frank Drebin]

Drebin - doesn't this artificially reduce the $'s available for the NHLPA though? In your example if the player retires after year 4, he was paid a total of $32.5 and his cumulative cap hit was $28M, with a resulting difference of $4M. By reducing team #1's cap by $9M, it seems like the NHLPA are "losing out" on the $5M difference. (I get that this $5M really just reduces the amount withheld in escrow, but it seems strange that the PA would agree to this.)

As I understand it - if the player was to retire with the same team after year 4, the cap hit would be 4.5 M for the last year as they had the one year of cap disadvantage.

But if the player was traded to a different team after year 3 and retired after year 4 the cap hit would be 9m for the last year.

I'm certainly not an expert but this is what makes sense to me.

 

[Scott Stevens]

So some have been lambasting the Leafs(as usual) for giving up a 1st to get rid of a 6.25 million cap hit?

And Vancouver now has to pay 3+ million/per in cap penalty for the next three years?

Um.............lol.

LOL.

 

[bossram]

Quite obviously the NHL didn't accept it was within the spirit of the rules or they wouldn't have instituted a cap recapture rule.

Yes, they decided it was egregious that they decided to punish them 4 years later.

If they thought it was illegal, don't allow it. Might as well go back and give Buffalo the Stanley Cup for the foot in the crease then. It was "against the rules" so they should retroactively make it right, right?

 

[crobro]

Glad to see one of these contracts actually get punished.

Surprised he didn't go on LTIR.

Going on LTIR takes away a year of eligibility for HHOF induction is how Luongo is seeing it

 

[ThirdManIn]

Because in the current CBA, it has been put in that any previous contracts that circumvented the cap will be punished.

Come on guys...the CBA is a legal agreed upon contract, there's no "getting out of it".

Yep. Everyone knows that no contract has ever been broken, not fully-enforced by one of the signatories, or simply terminated and reworked. There is "no 'getting out of it.'"

 

[Liferleafer]

Yep. Everyone knows that no contract has ever been broken, not fully-enforced by one of the signatories, or simply terminated and reworked. There is "no 'getting out of it.'"

Well, i guess we shall see. I think you can rule out "terminated and reworked" when talking about the CBA. Vancouver could aporoach the NHL and ask for some kind of leniancy i suppose, but as it stands, that contract is binding....as such, recapture will happen.

 

[uncleben]

A little late to the party, but with the retirement, Luongo brings to end his own trade tree

 

[mouser]

Yes, they decided it was egregious that they decided to punish them 4 years later.

If they thought it was illegal, don't allow it. Might as well go back and give Buffalo the Stanley Cup for the foot in the crease then. It was "against the rules" so they should retroactively make it right, right?

Straw man - Wikipedia

They changed the rules at the next best opportunity--when the next CBA was negotiated.

 

[JThorne]

Christian Ehrhoff is a case of the contract becoming bad after the rule change. And the Sabres will be paying for another decade still.