Pseudo-restructuring?

Discussion in 'Fugu's Business of Hockey Forum' started by sparr0w, Jul 20, 2005.

Thread Status:
Not open for further replies.
View Users: View Users
  1. sparr0w

    sparr0w Registered User

    Joined:
    Apr 14, 2005
    Messages:
    16,406
    Likes Received:
    8
    Trophy Points:
    114
    I didn't see a thread (in this section anyway) about this and I'm curious.

    http://www.thestar.com/NASApp/cs/Co...7&call_pageid=1044442959412&col=1044442957278

    I say pseudo-restructuring, because the existing terms don't change but what happens if you add extra years at a different value to a contract by way of an extension? The players would still receive what is owed them but the cap impact changes.

    Obvious examples would be Lidstrom, Sakic, and Sundin among others. These are guys expected to finish out their playing days with their existing teams and all three no doubt will be paid less with their next contracts. Could a multi year extension at a lower amount lessen the cap impact of the existing year?

    Example a 3 year $12M extension on Lidstrom's existing $7.6M deal would lower his cap figure to just below $5M for this year BUT obviously raise it over the $4M for the next three years. This "double-edged sword" quality makes it not a cap loophole, but since the actual payments don't change also not a restructuring.

    Would this work? Because I think this is an avenue a select few GMs with a select few cases ought to be able to utilize.
     
  2. Phil333

    Phil333 Registered User

    Joined:
    Dec 26, 2003
    Messages:
    997
    Likes Received:
    0
    Trophy Points:
    0
    Location:
    New York City
    As far as I can tell, this is not possible. Only old contracts will be dealt with this way. Once a player signs an extension, it is a new contract. The NHL will probably treat it as even if a player signs an extension, it is basically them playing out their old contract under those terms then getting a new contract with pre arranged figures as soon as the old one "runs out." It won't actually run out, but this is how it will probably work for cap purposes.
     
  3. sparr0w

    sparr0w Registered User

    Joined:
    Apr 14, 2005
    Messages:
    16,406
    Likes Received:
    8
    Trophy Points:
    114
    So an extension is an entirely new contract and not an addition to the old one? If that is a technical difference, yeah it makes sense why it wouldn't work. But if it isn't a technical difference...
     
  4. WalterSobchak

    WalterSobchak Blues Trololol

    Joined:
    Mar 11, 2004
    Messages:
    11,652
    Likes Received:
    0
    Trophy Points:
    124
    Occupation:
    Don't Judge Us
    Location:
    Where men chunder
    Home Page:
    You beat me to it.

    Contract Average to count against Cap

    --------------------------------------------------------------------------------

    I wonder, is this going to work so that it works for the length of the contract or is it figured on a year by year basis.

    If it is the entire length of the contract, it would probably work retro-active...which sucks for my Blues and Their Weight/Tkachuk contracts.
    ____________________________

    Restructuring is creating a new contract. In the regular world, you can renegotiate a loan, but it becomes a new loan. I think same principle
     
  5. ColoradoHockeyFan

    ColoradoHockeyFan Registered User

    Joined:
    Feb 17, 2005
    Messages:
    9,368
    Likes Received:
    0
    Trophy Points:
    94
    Location:
    Denver area
    Did you gather that from the article norrisnick referenced? Because that certainly doesn't seem to be specified. If it's not the case, then norrisnick makes a pretty good point about a possible strategy.
     
  6. sparr0w

    sparr0w Registered User

    Joined:
    Apr 14, 2005
    Messages:
    16,406
    Likes Received:
    8
    Trophy Points:
    114
    Well, that might not actually matter (unless of course contract extensions are banned along with contract restructurings). It doesn't really matter if it is a new contract provided that all four years (in my adding 3 years to Lidstrom's contract example) are included in the new deal and would still average out to just shy of $5M.

    If it is kept differentiated as two consecutive contracts it wouldn't work, but if they combine as one (either added to the old one or rewritten as a new one) it ought to work.

    Unless this is a scenario the league/'PA wanted to keep out of the CBA but I don't really see why. It isn't a loophole since you can't change the values to beat the system, and if you unbalance it too much you end up with a $5M cap impact on a $1M contract.
     
  7. coolguy21415

    coolguy21415 Registered User

    Joined:
    Jul 17, 2003
    Messages:
    9,285
    Likes Received:
    0
    Trophy Points:
    0
    I would think that extensions will work the same as they do in the NFL, where if you have x years left on your contract, and you sign a y year extension, the x years become null/void? This might only work in the NFL because they can cut without compensation (and therefore the 'extension' would effectively be a new contract), but I don't see why an extension would be seen as a new contract. There's no advantage to it for anyone really.
     
Thread Status:
Not open for further replies.

Share This Page

monitoring_string = "358c248ada348a047a4b9bb27a146148"