Salary Cap: Switching early from ELC to RFA?

[BoredBrandonPridham]

Hypothetical scenario, is it possible for a club to agree w/ a player to cancel a current ELC and sign an RFA contract immediately?

Obviously the player would like this more if it means they get paid more for a couple years of their ELC. A team could like it more if the player is willing to "stretch" the gains off the ELC over the duration of their contract.

Leafs aren't all *that* worried about cap space now, especially with so much coming off the books after this season, but they will start to have to crunch down when they're contending for the cup, and when Matthews, Marner, Nylander, Zaitsev, Brown are all into their RFAs.

By taking on extra salary earlier in their ELCs with a slightly cheaper (but longer duration) RFA contract where the player makes the same (or more money) than they would if they had stayed 2 more years on their ELC, you can dampen the cap burden for ~6 years on those 5 players. I'm not saying you'd want to do this for every player, but if you're confident a player will be worth the contract (e.g., Matthews, Marner...), is it technically possible?

Example:

Matthews following conventional 3yr ELC then an RFA contract:

ELC years 2 & 3 = 3.7 x 2 (cap hit 3.7)
RFA years 1 - 6 = 7.5 x 6 (cap hit 7.5)
= 52.4m over 8yrs

Matthews following an early ELC termination to RFA contract:

RFA years 1 - 8 = 6.55m x 8 (cap hit 6.55)
= 52.4m over 8yrs

Matthews makes the same money, he gets some of it earlier (better for him!), and Leafs shave $1m off the cap in years 3-8 when they presumably need it more than in the next 2yrs.

Click to read more...

 

[Duke Silver]

Not possible.

 

[Eternal Leaf]

Can't change contracts in such a manner.

 

[BoredBrandonPridham]

Can't change contracts in such a manner.

I think contracts have been mutually terminated before.

 

[WestCoastLeafs]

It's a nice idea, but consider the following:

- the ELC rule was added specifically to prevent highly touted young players from being able to sign big contracts based on hype. (Think of it as the Alexandre Daigle rule) When they put the rule in place, they chose three years as the time you needed to put in to prove yourself before being able to negotiate a contract. They would not have left a backdoor where you could get around the rule at will.
- if it were possible to do, it would already have been done. In fact for guys like Stamkos, Tavares, McDavid, etc., it would essentially be automatic - when you want a guy to play his whole career there, why wouldn't you invest a few extra million early on to make sure he's happy and sticks around?

So we'll need to wait the three years, and we might end up wasting a good chunk of cap space next year. First world problem though.

 

[Community]

I think contracts have been mutually terminated before.

They have, but you would have to mutually terminate his contract and then re-sign him. There are two issues I see with doing this.

1. Pretty sure if a mutual termination occurred he'd be a UFA. While I trust he would be a man of his word if they agreed to do this, as soon as this happened a team like Arizona would tell him, "before you sign with Toronto, we'll give you 8x10 to come home". Would be awfully tempting to go play in your home state for more money. His agent could also say, now that we have terminated the contract we're a FA and you have to pay me the big bucks to keep me.

2. The league wouldn't allow it. Just because something is mutually agreed upon by the two parties, doesn't mean its beneficial to the players association or owners to set a precedent and I think the league would revoke it and hand out some fines which would suck.

 

[BoredBrandonPridham]

- the ELC rule was added specifically to prevent highly touted young players from being able to sign big contracts based on hype. (Think of it as the Alexandre Daigle rule) When they put the rule in place, they chose three years as the time you needed to put in to prove yourself before being able to negotiate a contract. They would not have left a backdoor where you could get around the rule at will.

I kind of thought a bit about this, and thought perhaps the point would be moot given a termination of the contract would need to be mutual. Though I suppose if there becomes precedent for ELC to be circumvented, then I suppose it opens room for negotiation in the ELC years, and therefore a player could choose not to report to hold out for a "mutual" termination of ELC, similar to what happens in RFA scenarios.

 

[Warden of the North]

Not possible. Closed.