Question regarding Buyouts, 35, and Cap hits..

[Street Hawk]

Circumvent

Thank you again.

So the benefits of buying out a guy with a 35+ contract are a) paying only 2/3 of the value over 2x years, b) getting the NHL contract back, and c) not having the stiff in the lineup.

That 35 year old rule thing was put in to prevent teams signing older players to long term contract so lower the cap hit.

So, if they signed a 5 year deal worth 25 million, they'd only get a 5 million cap hit, but could structure the deal to front load the contract as much as possible, thereby giving the player most of the money upfront, thereby allowing him to retire with 3 years left on the deal. Player gets his money and the team gets a lower cap hit.

But, I think the NHL could have done it a bit differently to prevent teams from circumventing the cap this way.

I was thinking that they should basically say that if you sign a 35 year old player to a multi-year deal, he has to earn the same amount each season. So, using the previous example, he can only be paid $5 million dollars each season. He can't go from 8 million, to 7 to 5 to 3 to 2. Has to be $5 million each year.

But, I really doubt that would change anything. Now, teams just want to make sure that older player is going to play those 2 or 3 years that he signed for.

 

[mouser]

Good point, and suggests a simple solution:

Do the same thing with regards to retirements that the CBA does for buyouts.

If a player retires "underwater" (has been paid more salary than the cap hit over the contract to date), then assign the difference to the team's cap over 2x the years remaining.

 

[Fourier]

Yes, I asked the NHL this exact question. I'd say I have a copy of the e-mail to back me up, but Verizon screwed up the e-mail account I was using at the time and decided anything older than 15 days could be purged even if I put it into a "save for reference" folder that was supposed to be a "DON'T EVER DELETE" folder.

And yes ... that's the benefit of buying out a "35 or older" player. It's happened three times - Shawn McEachern [BOS], Tie Domi [TOR] and Dallas Drake [STL].

Thanks again IB!!! I appreciate you taking the time to clear this up, as well as other posters bring this up again.

This issue come up on the Oiler board all the time with respect to Roli. I have always been under the impression that the cap hit stayed.