The Leafs did not structure a contract to take a higher hit in year 1 so that they would have a lower hit in the out years. You don’t seem to understand what the in-year adjustment is.
The in year adjustment is design to not incentivise a team to force a hold out in such a way that they can lower the players cap hit in year 1. Therefore, by inflating the in-year cap hit proportionately to the number of missed games, it causes the players cap hit to be exactly the same in year 1 as it is in all other years despite signing in season.
Since cap accrues daily and Nylander wasn’t on the roster until Dec 1, the inflation in year 1 causes Nylander to have exactly a $6.96m cap hit in year 1.
The reason the AAV ($6.96m) in years 2-6 looks less than the dollars earned is because Nylander didn’t earn the amount of salary proportional to the number of games he missed.
There is no loophole here. The number $7.5m has 0 relevance no matter how you look at this. It doesn’t represent how much money Nylander earned yearly on average (that number is 6.96), it doesn’t represent how much he cost on the cap in year 1 (that number is 6.96), and it doesn’t represent how much he costs on the cap in years 2-6 (that number is $6.96).
The only number that matters is 6.96 / 8.8% of cap.
Really?
If an RFA signs after the season starts, how is their cap hit calculated?
When a restricted free agent signs a contract after the NHL season has already begun, their cap hit for the first year is greater than the contracts annual average, and similarly the cap hit of the remaining years is less than that of the annual average.
A notable aspect of the following calculation is that the sum of the cap hit values is greater than if the contract was signed before season start (and used the normal AAV calculation; monetary value of the contract divided by the total years)
The cap hit of the years after the first year of the contract is calculated first:
Cap hit after the first year = (First year salary × season days remaining / total season days + contract value remaining) / contract years
The first years cap hit is then calculated:
First years cap hit = cap hit after the first year × total season days / season days remaining
Example:
Hampus Lindholm of the Anaheim Ducks signed a $31,500,000 contract on Oct 27, 2016 in the 2016-17 season. There were 164 days remaining in the season on this date. The contract break down was as follows:
2016-17: $3,000,000
2017-18: $6,000,000
2018-19: $6,750,000
2019-20: $5,250,000
2020-21: $3,750,000
2021-22: $6,750,000
Total: $31,500,000
Annual Average: $5,250,000
The cap hit values are calculated as follows:
Cap hit (2017-18 to 2021-2022) = ($3,000,000 × 164 / 180 + $28,500,000) / 6 = $5,205,556
Cap hit (2016-17) = $5,205,556 × 180 / 164 = $5,713,415
The cap hit breakdown is therefore as follows:
2016-17: $5,713,415
2017-18: $5,205,556
2018-19: $5,205,556
2019-20: $5,205,556
2020-21: $5,205,556
2021-22: $5,205,556
Total: $31,741,294
Average: $5,290,216
Why don't you try working it out if they only paid Willy $5M the first season instead of $12M. Thanks for educating me.
