The NHL has a BIG problem (Cap Circumvention via LTIR)

[Ted Hoffman]

I'm not sure what "non-solution" means, right now there are a couple of specific circumstances where teams are allowed to exceed the salary cap. If those exceptions are removed, they will simply have to act within the new confines of the cap.

Non-solution is fans screaming I THINK THERE'S A PROBLEM where there isn't one and demanding a "fix" to it, which in turn creates real problems they never thought about because they were too focused on fixing what they thought was a problem.

Perfect example: contract lengths weren't a problem. Forcing teams to eat shit when those contracts went bad was a problem. The popular, much-touted "solution" was to arbitrarily, one-size-fits-all shorten contract lengths, which drove up cap hits and left teams with less cap space than they might have had if they could have thrown on a few more years at a lower price. Oh, and it still didn't force teams to eat shit when the contracts went bad because they could still get pawned off on someone else. But, we'll give players incentive to stay with their current teams by letting them sign for an extra year if they stay - which was great for the "teams should be able to retain their own players" crowd and not great for the "players never change teams, we never have a chance to attract premier free agents because they never leave whoever drafted them" crowd. [I eagerly look forward to a debate between those two sides one day. It'll be fascinating.]

Even now, people want to shorten contracts because they think it's dumb some guy got a 6-year, 7-year contract. So what? You shorten contract lengths, it will drive up cap hits as players go for every dollar they possibly can because they've lost the chance to have longer-term security. Trades will become more difficult to swing. Player movement will be more limited as a result. It won't fix anything. It'll make things worse. It will put more cap dollars in the hands of fewer players and further price out the middle class of hockey players, though, so ... (golf clap)

If the current rule structure remains in place, you will continue to see fans suspicious of injuries, frustrated at what other teams are getting away with, and unhappy with the lack of parity. To me, it's no different than when the Rangers buried Wade Redden in the AHL and the rest of the league realized that that was just cheating, and changed the rules.

Again, the Rangers weren't "cheating" by burying Redden in the minors. They gained no cap advantage; his salary was his cap hit for every year of the contract. The Rangers didn't "gain cap space" for the first two years of that deal that they never had to pay back. I know, well, they were paying him $6.5 million per - and, he gave them precisely $0.00 in NHL value while playing in Hartford. There was no advantage to the Rangers with respect to the salary cap.

The solution from demasses of dumbasses, though? Come up with a contrived method to force the Rangers in a similar situation to eat $5.6 million or so on the cap after they had realized $0 NHL benefit, when the $ they paid to the Redden while he was in the NHL = the $ he incurred against the cap. Were the current rule on buried players in place and assuming the compliance buyout still happened as it did, Redden would have been paid $13 million for his NHL services and incurred a little over $24 million against the cap, plus the charge for the buyout. It was a non-solution to a non-problem ... or better yet, it was a shitty solution to a misidentified problem that created more problems than it solved.

What the solutions should have been? (A) Reword the definition of Group V free agency to give a player on a 1-way contract and assigned outside the NHL a one-time chance in his career to void his contract and become UFA and find another team, (B) force teams to eat any cap savings they had realized on a contract when they sent the player off their NHL roster, and/or (C) put a limit on when/how often a 1-way contract could be assigned to the minors before the contract was voided and the player automatically became UFA, even if that meant the team had to take a cap charge due to accrued cap savings. All of those would have accomplished a hell of a lot more, kept the cap system in balance, and still removed incentives for teams to "load up" on players and then bury them elsewhere when they were no longer convenient, especially if they started counting more against the cap than they were making.

 

[Ted Hoffman]

plenty of loopholes for some of those from some perspectives,

Again, I haven't thought these out for pros/cons and loopholes.

 

[ChaoticOrange]

You shouldn't be upset that this rule exists, you should be upset that only a small handful of GMs are smart enough to exploit it. Most of the teams in this league are run by dinosaurs that haven't had a creative solution cross their mind in two decades.

 

[Ted Hoffman]

Daily cap hit of their salary in a regular season game, projected to post season. I think you might be purposefully obtuse at this point.

I'm not being obtuse. I'm trying to get you to think about how the salary cap works and what might be different about

• the regular season (which has a fixed number of days, so "daily cap hit of their salary in the regular season" x "# of days in the regular season" = "total [regular-season] cap hit for the player"), and
• the postseason (which has an unknown number of days except perhaps if we use "maximum possible length" which may or may not be realized, but in any instance "daily cap hit of their salary in the regular season" x "# of days in the postseason" will most assuredly not equal "total [regular-season] cap hit for the player", and might well give a team way more cap space than people really intend them to have)

And no, pro-rate the regular-season cap to however long the postseason is is not a viable solution for a reason I mention above.

 

[Blackjack]

Non-solution is fans screaming I THINK THERE'S A PROBLEM where there isn't one and demanding a "fix" to it, which in turn creates real problems they never thought about because they were too focused on fixing what they thought was a problem.

Perfect example: contract lengths weren't a problem. Forcing teams to eat shit when those contracts went bad was a problem. The popular, much-touted "solution" was to arbitrarily, one-size-fits-all shorten contract lengths, which drove up cap hits and left teams with less cap space than they might have had if they could have thrown on a few more years at a lower price. Oh, and it still didn't force teams to eat shit when the contracts went bad because they could still get pawned off on someone else. But, we'll give players incentive to stay with their current teams by letting them sign for an extra year if they stay - which was great for the "teams should be able to retain their own players" crowd and not great for the "players never change teams, we never have a chance to attract premier free agents because they never leave whoever drafted them" crowd. [I eagerly look forward to a debate between those two sides one day. It'll be fascinating.]

Even now, people want to shorten contracts because they think it's dumb some guy got a 6-year, 7-year contract. So what? You shorten contract lengths, it will drive up cap hits as players go for every dollar they possibly can because they've lost the chance to have longer-term security. Trades will become more difficult to swing. Player movement will be more limited as a result. It won't fix anything. It'll make things worse. It will put more cap dollars in the hands of fewer players and further price out the middle class of hockey players, though, so ... (golf clap)

I don't care about contract lengths except for the fact that teams were using fake years at the end to cheat the cap. Limiting the number of years helps solve that, but you can also solve it by making sure that teams that enjoy the cheap early years of a long term contract suffer the expensive late years of a contract as well.

Again, the Rangers weren't "cheating" by burying Redden in the minors. They gained no cap advantage; his salary was his cap hit for every year of the contract. The Rangers didn't "gain cap space" for the first two years of that deal that they never had to pay back. I know, well, they were paying him $6.5 million per - and, he gave them precisely $0.00 in NHL value while playing in Hartford. There was no advantage to the Rangers with respect to the salary cap.

That's semantics. Obviously the rest of the league felt it was unfair for the Rangers to get out of a bad contract by removing the player from their roster. Allowing teams to do that defeats both of the ostensible purposes of the salary cap: cost control and competitive balance, because the Rangers were continuing to pour money into player salaries beyond their fair portion.

The solution from demasses of dumbasses, though? Come up with a contrived method to force the Rangers in a similar situation to eat $5.6 million or so on the cap after they had realized $0 NHL benefit, when the $ they paid to the Redden while he was in the NHL = the $ he incurred against the cap. Were the current rule on buried players in place and assuming the compliance buyout still happened as it did, Redden would have been paid $13 million for his NHL services and incurred a little over $24 million against the cap, plus the charge for the buyout. It was a non-solution to a non-problem ... or better yet, it was a shitty solution to a misidentified problem that created more problems than it solved.

Actually the solution worked perfectly, as we saw when the Leafs were unable to properly manage their cap and forced to trade a first round pick to rid themselves of Marleau's contract. I'm sure Dubas would have been perfectly happy sending Marleau down the Marlies and keeping his 1st round pick.

What the solutions should have been? (A) Reword the definition of Group V free agency to give a player on a 1-way contract and assigned outside the NHL a one-time chance in his career to void his contract and become UFA and find another team,

Players already have this ability, you may have noticed that it happened with Nikita Gusev this year. Turns out that players that are signed to lucrative contracts are not always so keen on tearing them up.

(B) force teams to eat any cap savings they had realized on a contract when they sent the player off their NHL roster, and/or (C) put a limit on when/how often a 1-way contract could be assigned to the minors before the contract was voided and the player automatically became UFA, even if that meant the team had to take a cap charge due to accrued cap savings. All of those would have accomplished a hell of a lot more, kept the cap system in balance, and still removed incentives for teams to "load up" on players and then bury them elsewhere when they were no longer convenient, especially if they started counting more against the cap than they were making.

Again, this is unnecessarily convoluted. If a team signs a player to an SPC, the contract should count against the cap until the contract expires, is traded, or bought out.

 

[LTIR Trickery]

I'm definitely rooting for Tampa Bay to win the cup, maybe if they roll through the league with $105 million worth of players, fans of other teams will wake up and demand reform.

I think LTIR needs to be scrapped entirely, and salary retention as well. Cap hit should equal player compensation for the year (salary + bonus) or simply require contracts to have equal payouts in all years.

Absolutely zero chance and not even a good plan.

 

[Dicky113]

So if you ended up in a hospital for an extended amount of time you would say that you were quite literally being paid to not be at work?

I think the point is, if you then got out of the hospital and were fit as a fiddle, but your boss said “stay home until June because while your were sick we hired a bunch of guys to replace you and now we don’t have anywhere to put you as they are all using your office. But don’t worry, once June gets here we can find room for all of you”. Then you would be paid to stay at home.

 

[Dicky113]

You shouldn't be upset that this rule exists, you should be upset that only a small handful of GMs are smart enough to exploit it. Most of the teams in this league are run by dinosaurs that haven't had a creative solution cross their mind in two decades.

Well, to really exploit it you have to be willing to pressure healthy players to sit out and lie. Not sure “smart” or creativity are really the best descriptors. Also not sure we should be “upset” that more GMs aren’t prepared to do this

 

[Warden of the North]

Can someone who understands it more please explain how a luxury tax to allow teams exceed the cap is bad for the league? Or full ticket buyouts whenever you want them? Or star player exceptions that dont count against the cap?

 

[nhlfan9191]

I want to be really mad at Tampa for this Kucherov situation. But I’d be lying if I said I wasn’t jealous that my team isn’t in a situation where it could just tell a star player of that calibur to take the regular season off and have little to no repercussions for it. It’s crazy how deep that team is. That said, I think it makes no sense that the salary cap disappears in the the playoffs.

 

[paulhiggins]

It's not a perfect league but I think they have worse problems than that right now:

1. game management and how it makes games look fixed, whether or not they are.
2. taxation differences between states/provinces: how it affects salaries and and its relationship to subsidies given by the strong teams to the weak sisters of the league.
3. salary imbalances between the highest paid and lowest paid players. Do you have someone sitting beside you at work doing the same job as you but making 10x what you make?
4. Covid-19

 

[madinsomniac]

Can someone who understands it more please explain how a luxury tax to allow teams exceed the cap is bad for the league? Or full ticket buyouts whenever you want them? Or star player exceptions that dont count against the cap?

so lets say tgey go luxury tax... and sayvthe pens billionaire owner ron burkle decides he wants a cup so he gives every player they want a ten million dollar contract, money be damned... that bumps up the market for equivalent players, especially with arbitration on the table, and that starts the same spiral that was bankrupting half the league last time...

Look the cap structure is fair and it keeps teams with a natural regional advantage from monopolizing talent, which is good for the health of the league

it stops stupid owners with stupid money from breaking the economic structure

 

[Bevans]

13 pages of "I don't understand collective bargaining".

Almost every suggestion forwarded would take cap away from teams, which takes jobs away from players.

13 pages of asking NHLers to play Russian Roulette with a loaded pistol, all so that armchair fans can say the word "fair" a bunch.

 

[Warden of the North]

so lets say tgey go luxury tax... and sayvthe pens billionaire owner ron burkle decides he wants a cup so he gives every player they want a ten million dollar contract, money be damned... that bumps up the market for equivalent players, especially with arbitration on the table, and that starts the same spiral that was bankrupting half the league last time...

Look the cap structure is fair and it keeps teams with a natural regional advantage from monopolizing talent, which is good for the health of the league

it stops stupid owners with stupid money from breaking the economic structure

OK, thats fair, however I meant say a 10% cap on luxury tax. Not unlimited. What would be the big harm in that?

 

[Warden of the North]

13 pages of "I don't understand collective bargaining".

Almost every suggestion forwarded would take cap away from teams, which takes jobs away from players.

13 pages of asking NHLers to play Russian Roulette with a loaded pistol, all so that armchair fans can say the word "fair" a bunch.

Most of us are just sports fans. Not business majors.

 

[Ted Hoffman]

I don't care about contract lengths except for the fact that teams were using fake years at the end to cheat the cap.

Then the solution wasn't "limit contract lengths for guys down to 21." It was

making sure that teams that enjoy the cheap early years of a long term contract suffer the expensive late years of a contract as well.

Let me know how the league has done accomplishing that.

Obviously the rest of the league felt it was unfair for the Rangers to get out of a bad contract by removing the player from their roster. Allowing teams to do that defeats both of the ostensible purposes of the salary cap: cost control and competitive balance, because the Rangers were continuing to pour money into player salaries beyond their fair portion.

I can't help that teams (and fans) don't understand that in a cap system that's in balance, $ paid for a player's service to his team = $ incurred against the cap. Again,

1. The solution to the "problem" was not to come up with non-solutions that created more problems
2. The Rangers - and Leafs and all the other high-revenue teams - could still "pour money into player salaries beyond their fair portion" because people have a misguided notion of what's fair. Life isn't fair.
3. Even now, teams can still "get out of a bad contract by removing the player from their roster." The penalty for it can be (in cases, grossly) disproportionate to the cap benefit gained when the contract wasn't bad, but ... hey, <MissionAccomplished.jpg> somewhere.

Actually the solution worked perfectly, as we saw when the Leafs were unable to properly manage their cap and forced to trade a first round pick to rid themselves of Marleau's contract.

This is like saying you crashed your car into the neighbor's house and you got it to stop raining.

Players already have this ability, you may have noticed that it happened with Nikita Gusev this year. Turns out that players that are signed to lucrative contracts are not always so keen on tearing them up.

That completely misses the point I was trying to make - namely, that with Gusev it required the Devils to consent and there can be (are) instances that a team may not consent. Not to mention that even in doing this the Devils still gained a cap advantage. But, go ahead and run with it.

Again, this is unnecessarily convoluted. If a team signs a player to an SPC, the contract should count against the cap until the contract expires, is traded, or bought out.

It doesn't even work that way right now. Lots of players are signed to SPCs that don't count against the cap. You probably should re-word this (a lot) to get it closer to right. Probably start back with understanding what a cap system is actually intended to do. I might have posted some notes on it along the way.

 

[Ciao]

I don’t think anyone is questioning if these players ARE injured or not, it’s more these teams dragging out these injury’s to their benefit.
I think LTIR is great, it serves a worthwhile purpose.
What isn’t great is on the first day of the playoffs, the salary cap that you had to stay compliant for the whole regular season is thrown out the window like it never existed.

So?

 

[Ciao]

I don't think the players get paid in the playoffs.

Once the playoffs start, the actual payroll of every team is exactly the same: zero.

 

[Mr Positive]

I don't think the players get paid in the playoffs.

Once the playoffs start, the actual payroll of every team is exactly the same: zero.

Which is why there is no cap. And the defense to this is that you cannot add new players, so the need for a cap in the playoffs has never been considered needed. Extending the cap consequences to the playoffs would only be done for LTIR returns. Even then, there would have to be a totally different, rethought rule. You would have teams over the cap with no method of getting back under

That is the fundamental flaw in the LTIR system. You are supposed to be able replace injured players but it's not like you can just return them after the other guy gets back

 

[Ted Hoffman]

13 pages of "I don't understand collective bargaining".

Almost every suggestion forwarded would take cap away from teams, which takes jobs away from players.

13 pages of asking NHLers to play Russian Roulette with a loaded pistol, all so that armchair fans can say the word "fair" a bunch.

I want to uncontrollably love this post.

Can someone who understands it more please explain how a luxury tax to allow teams exceed the cap is bad for the league? Or full ticket buyouts whenever you want them? Or star player exceptions that dont count against the cap?

It's mainly that it's bad for the players, so start from their POV.

No matter how much money gets spent on player salaries, no matter what cap structure is in place, they [currently, and for the future as far as we can see, will] get 50% of HRR. Period. Every proposal offered up that lets teams somehow "permissibly" exceed the cap is a direct levy on the players, because every excess dollar spent is a dollar that comes out of the pockets of the players as a whole. If teams get to overspend the cap with a luxury tax, full ticket buyouts and player exceptions that don't count against the cap and it's say $300 million in a year, the players get to pay back that $300 million via escrow. The benefits accrue to a very few players relative to the size of the NHLPA, meaning the vast majority of the rank and file pay for the upper-upper class to have more. (Comparison to current society omitted.)

(Theoretically, this could be set up to levy the players that benefit, but then they're basically being asked "do you want $6 million, or do you want $9 million less $3 million that we're going to take away" and ... ah, never mind, I can see players saying yeah, gimme that $9 million! and never catching on to the shell game being played.)

Now ... This requires the NHLPA to understand that all of those ideas would come at their expense, though. I argued back as far as 2008 that escrow was going to be a problem for the NHLPA and they should push to shift some of the onus of overspending back on the owners. Donald Fehr got them high quality bath towels and a specified number of various weights instead. The chances of it now are higher, but I still think they'd see $ and reach for it not understanding the actual implications for them and they'd think just cap escrow would fix everything and be confused when years later they owe a shitload of money to the owners and try to beg for debt forgiveness.

From the owners POV: it's pretty clear who's going to benefit from these ideas, and it's not Arizona, Florida, Columbus, Winnipeg, Ottawa, Nashville or even up to St. Louis, Vancouver and Calgary. There's enough of them that won't benefit that they'll form at least a majority, and I think there's enough others who'll see the competitive advantage gained by a select few teams at their expense that they'll object because they don't want their franchise relegated to 2nd-tier status, even if they get a cut of the luxury tax proceeds. (I'll bet that goes to the bottom half of teams in league revenues.) Not to mention, teams that pay luxury tax will want that money getting spent instead of going right into someone else's pockets and the recipient teams won't want to be told what to do with the money they're getting.

 

[Ted Hoffman]

That is the fundamental flaw in the LTIR system. You are supposed to be able replace injured players but it's not like you can just return them after the other guy gets back

That's not a flaw. That's by design. Basically (yes, I know it's not 100% accurate but it's accurate enough for the purpose of explaining here), your Active Roster has to fit under the cap given what you've spent year-to-date + what you're expected to spend on the Active Roster the rest of the year forward. The flaw is that you can LTIR a guy all season, then add him back in the playoffs and never have to account for him.

[Cue post #1 in this thread, start time in a circle]

 

[Weezeric]

Then the solution wasn't "limit contract lengths for guys down to 21." It was

Let me know how the league has done accomplishing that.


I can't help that teams (and fans) don't understand that in a cap system that's in balance, $ paid for a player's service to his team = $ incurred against the cap. Again,

1. The solution to the "problem" was not to come up with non-solutions that created more problems
2. The Rangers - and Leafs and all the other high-revenue teams - could still "pour money into player salaries beyond their fair portion" because people have a misguided notion of what's fair. Life isn't fair.
3. Even now, teams can still "get out of a bad contract by removing the player from their roster." The penalty for it can be (in cases, grossly) disproportionate to the cap benefit gained when the contract wasn't bad, but ... hey, <MissionAccomplished.jpg> somewhere.


This is like saying you crashed your car into the neighbor's house and you got it to stop raining.


That completely misses the point I was trying to make - namely, that with Gusev it required the Devils to consent and there can be (are) instances that a team may not consent. Not to mention that even in doing this the Devils still gained a cap advantage. But, go ahead and run with it.


It doesn't even work that way right now. Lots of players are signed to SPCs that don't count against the cap. You probably should re-word this (a lot) to get it closer to right. Probably start back with understanding what a cap system is actually intended to do. I might have posted some notes on it along the way.

Are you proposing that players should just able to void their contracts?

 

[Mr Positive]

That's not a flaw. That's by design. Basically (yes, I know it's not 100% accurate but it's accurate enough for the purpose of explaining here), your Active Roster has to fit under the cap given what you've spent year-to-date + what you're expected to spend on the Active Roster the rest of the year forward. The flaw is that you can LTIR a guy all season, then add him back in the playoffs and never have to account for him.

[Cue post #1 in this thread, start time in a circle]

What I'm not seeing talked about is how a team is expected to get under the cap after the trade deadline and in the playoffs. That's what I meant by saying the whole rule would need to be rethought

 

[Filthy Dangles]

You shouldn't be upset that this rule exists, you should be upset that only a small handful of GMs are smart enough to exploit it. Most of the teams in this league are run by dinosaurs that haven't had a creative solution cross their mind in two decades.

This is silly.

So GM's just need to be more "creative" in convincing their banged-up star players to milk an injury until playoffs come?

This has nothing to do with being creative. Most teams aren't rich enough to survive without a Kucherov for ~50 plus games and still comfortably make the playoffs. And I would think most star players aren't down with sitting out for the playoffs to help their team's salary cap situation. Kucherov just won a stanley cup and has played a ton of hockey, so he probably doesnt mind.

It's a rich team (in terms of their talent and depth) taking advantage of a nuanced situation.

 

[Ted Hoffman]

Are you proposing that players should just able to void their contracts?

I'm proposing as a one-time thing in a player's career, a player on a one-way contract sent outside the NHL a 2nd time (twice in different years) on that contract could void their contract upon the 2nd designation for assignment and become UFA.

Would any player use it? Don't know. Not my problem to dwell on. When Group V free agency actually existed pre-2005, there were 1-2 players a year that elected it. I'd expect it about that often here. I stress the one-time part, though: if you manage to get yourself to a 2nd multi-year contract and underplay expectations on it too and get sent outside the NHL twice under it as well, ... that's on you now, you figure out how to step up your game or deal with it.

What I'm not seeing talked about is how a team is expected to get under the cap after the trade deadline and in the playoffs. That's what I meant by saying the whole rule would need to be rethought

OK, then yes I agree with you. Whether the teams see it the same way, ... well, we'll find out. I'm merely saying when (if) they decide it's a problem, I'm pretty confident they won't think out a logical solution and they'll try slamming a square peg into a round hole and call it a success, like they've done with other times when they've tried to "fix" a "problem" that created new problems I'm pretty sure no one ever thought about.