Salary vs. Cap Hit

Discussion in 'Fugu's Business of Hockey Forum' started by Danger Zone, Feb 15, 2011.

  1. Matt Riddle bro

    Matt Riddle bro Bro

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    Why are they sometimes different?
     
  2. jacklours

    jacklours Registered User

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    If I give you a 2 year contract of 4m the 1st year and 2m for the second. Then the average is 3m which is also your cap hit, yet you never earn exactly 3m any given year.
     
  3. Matt Riddle bro

    Matt Riddle bro Bro

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    The salary changes from year to year, and the cap hit is the average salary over the length of the contract. Makes sense. Thanks!

    EDIT: I'm an idiot, I already knew this but somehow I was reading figures on player contracts and it didn't register in my head at the time. Why else would there have been such a big deal about Kovy's contract and the Devils cap circumvention? I have to restrict posting before 9am. :facepalm:
     
  4. Agalloch

    Agalloch EliteProspects

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    Seriously, salary and cap hit should be the same...
     
  5. Matt Riddle bro

    Matt Riddle bro Bro

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    Yeah, I don't see why it isn't. All this circumvention stuff wouldn't be an issue if it was.

    If there's needs to be a cap on something, cap the length and value of the contracts. No more of these Yashin and DiPietro debaucles.
     
  6. vofty

    vofty Registered User

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    It also allows teams like Dallas who are in temporary severe financial restriction to back load contracts in the hopes that by the time the pay increases for those new contracts come due they will be in a better place financially.

    On the other hand front loaded contracts that have a lower salary towards the end are more attractive trade targets for teams that have salary restrictions but aren't anywhere near the cap. Michael Rozsival was an example of this for the Coyotes. Rangers wanted him off the books because of his high caphit and because his salary was lower than his pretty high caphit he was a good option for Phoenix.
     
  7. Matt Riddle bro

    Matt Riddle bro Bro

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    Interesting perspective. Sounds like those situations should be agreed to on a case-by-case basis though. Allowing backloading league-wide seems like it's what put so many teams into cap trouble and shortening rosters on game days. I know all of these cases have to be reviewed and approved by the league, but it doesn't seem like there's much scrutiny on them and that the owners are allowed a little too much freedom in what's supposed to be a structured sports league.
     
  8. boredmale

    boredmale Registered User Sponsor

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    I wonder if the league will push that so we don't get front loaded deals anymore
     
  9. RangerBoy

    RangerBoy The Rebuild Is Over. The Build Continues.

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    The Rangers front-loaded Rozsival's contract because it made him easier to trade at the back end of the deal or assign to the AHL. Rozsival wanted $5M per. They were concerned about Rozsival's health at the end of the contract. He was coming off hip surgery when the Rangers gave Rozsival 4 years/$20M. Rozsival has had two knee surgeries. ACL and a minor one. If benefitted him to get 65% of the contract in the first two years.

    $7M
    $6M
    $4M
    $3M
     
  10. tarheelhockey

    tarheelhockey Highest Boss

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    The problem with making cap hit equal to salary is that it allows teams to play even more games to squeeze players under the cap. The current system was supposed to prevent circumvention, but ended up getting abused due to the frontloading loophole.

    Unfortunately the GMs just aren't grown-up enough to operate on an honor system.
     

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