Waived: Ville Leino for purposes of Compliance Buy-Out

[Mit Yarrum]

The breakdown of the $7,333,333 payout, according to capgeek.com:

– 2014-15: $1,722,222

– 2015-16: $2,222,222

– 2016-17: $2,222,222

– 2017-18: $1,222,222

– 2018-19: $1,222,222

– 2019-20: $1,222,222


Question.....

If it doesn't count against the cap, and it's purely money out of Pegula's pocket, why does the money owed need to be paid out like that? Why can't Pegula just write a check for the 7 mil. and pay him off this summer? I'm obviously missing something.

My first thought is that it makes it easier on the team. Some teams don't have a liquid 7 mil laying around, thus prohibiting them from using the compliance buyout.

 

[Zip15]

The breakdown of the $7,333,333 payout, according to capgeek.com:

– 2014-15: $1,722,222

– 2015-16: $2,222,222

– 2016-17: $2,222,222

– 2017-18: $1,222,222

– 2018-19: $1,222,222

– 2019-20: $1,222,222


Question.....

If it doesn't count against the cap, and it's purely money out of Pegula's pocket, why does the money owed need to be paid out like that? Why can't Pegula just write a check for the 7 mil. and pay him off this summer? I'm obviously missing something.

Why would he want to do that? Present value of money. Pegs could put that money aside in an investment account and, in all likelihood, reap huge interest from that money.

 

[26CornerBlitz]

No claims on Ville?

 

[vcv]

Why would he want to do that? Present value of money. Pegs could put that money aside in an investment account and, in all likelihood, reap huge interest from that money.

Plus it counts against the books, so they don't want a nice fat $7M sitting on there affecting their bottom line.

 

[Jacob582]

Question.....

If it doesn't count against the cap, and it's purely money out of Pegula's pocket, why does the money owed need to be paid out like that?

CBA rules

 

[Jamie Walker]

nhl.com reporting sabres used 1 compliance buyout on leino. now its done.

 

[MayDay]

http://www.nhl.com/ice/news.htm?id=722919&navid=nhl:topheads

"Free agency starts first of July, and we'll go from there," Leino's agent, Markus Lehto, told the Buffalo News, adding Leino was not surprised by the buyout. "His priority is to play in the NHL. He knows he's a very good NHL player. Obviously, the past two seasons have been just average, I would say, but I'm not going to go and try and analyze what happened. I mean, we'll just look forward."

0 goals in a full NHL season is "just average." Golly, I would have been fascinated to see Leino if he were producing at a below average clip.

Always fascinating to see player agents try to put the best possible spin on what is basically a tire fire.

 

[Mit Yarrum]

Happy days

 

[dotcommunism]

The breakdown of the $7,333,333 payout, according to capgeek.com:

– 2014-15: $1,722,222

– 2015-16: $2,222,222

– 2016-17: $2,222,222

– 2017-18: $1,222,222

– 2018-19: $1,222,222

– 2019-20: $1,222,222


Question.....

If it doesn't count against the cap, and it's purely money out of Pegula's pocket, why does the money owed need to be paid out like that? Why can't Pegula just write a check for the 7 mil. and pay him off this summer? I'm obviously missing something.

First off, that breakdown as presented is not what he actually gets paid for a buy-out, it's what his cap hit would have been if it had not been a compliance buy-out. Leino gets the same $1,222,222 in actual money (this would also be the case if it weren't a compliance buy-out).

The terms of a buy-out are dictated by Paragraph 13 of the Standard Player Contract (Exhibit 1 of the CBA):

(d) If the Club elects to terminate this SPC pursuant to this Paragraph 13, it shall be obligated to pay to the Player, in equal semi-monthly installments, to be paid in accordance with the payroll payment schedule applicable to the Club's Active Roster, over twice the remaining term of the SPC (the "Buy-Out Period"):
(i) if the Player is under 26 years of age at the time the termination is effective, an amount equal to 1/3 of, or
(ii) if the Player is 26 years of age or older at the time the termination is effective, an amount equal to 2/3 of the total fixed amount of the Player's Paragraph 1 NHL Salary, for the unexpired fixed-term of this SPC, reduced by any advance payment of Paragraph 1 Salary received by the Player prior to the date the termination is effective.

Now as for why it's written up that way, I don't have any specific answers. There might have been something written about it back when the 2005 CBA came out (I am not aware if the present buy-out option existed prior to then). If I had to speculate, however, with the lowering of the yearly payment in exchange for a longer term, the purpose is to both reduce the yearly salary obligations for the club due to a buy-out and also to reduce the amount it counts against the Players' Share. With the latter point, however, we're getting into relatively esoteric things like escrow and such, that I won't pretend to have put the effort into understanding.

 

[SundherDome]

The breakdown of the $7,333,333 payout, according to capgeek.com:

– 2014-15: $1,722,222

– 2015-16: $2,222,222

– 2016-17: $2,222,222

– 2017-18: $1,222,222

– 2018-19: $1,222,222

– 2019-20: $1,222,222


Question.....

If it doesn't count against the cap, and it's purely money out of Pegula's pocket, why does the money owed need to be paid out like that? Why can't Pegula just write a check for the 7 mil. and pay him off this summer? I'm obviously missing something.

That is what doesn't add up...that's close to 10 mil

 

[VaporTrail]

Na na na na......Na na na na.....Hey hey hey goooooooodbye ! ! !

 

[dotcommunism]

That is what doesn't add up...that's close to 10 mil

Again, this is not the buy-out payment. That is what Leino's buy-out cap hit would have been if this had been a regular buy-out, rather than a compliance buy-out.

 

[pyroxen]

I really wanted him to suceed with the Sabres, but yeah...

 

[Chainshot]

http://www.nhl.com/ice/news.htm?id=722919&navid=nhl:topheads



0 goals in a full NHL season is "just average." Golly, I would have been fascinated to see Leino if he were producing at a below average clip.

Always fascinating to see player agents try to put the best possible spin on what is basically a tire fire.

There is spin and then there is spin! Average.... Wow.

 

[Jacob582]

There is spin and then there is spin! Average.... Wow.

Total spin when you compare to average NHler. Close to truth when you compare to Sabres forward last year!

 

[Wisent42]

http://www.nhl.com/ice/news.htm?id=722919&navid=nhl:topheads



0 goals in a full NHL season is "just average." Golly, I would have been fascinated to see Leino if he were producing at a below average clip.

Always fascinating to see player agents try to put the best possible spin on what is basically a tire fire.

If 0 goals in a full season is "just avarage", what kind of superstar does that make John Scott?

 

[Tsujimoto]

RIP Ville...

 

[1point21Gigawatts]

Now who will be the whipping boy?

 

[Bobby Bottle Service]

Is it irony that Leino and Richards were both bought out? If we had signed BR instead of VL, would we be buying Brad out now?

 

[Chad Thundercock]

Is it irony that Leino and Richards were both bought out? If we had signed BR instead of VL, would we be buying Brad out now?

Definitely, and he'd easily be the whipping boy here.

At least with Leino, many of us hated the signing from the start.

 

[hizzoner]

With one shoe dropped, will there be another? I am surprised by the number of reporters who point to Myers as a possibility.

 

[Paxon]

RIP Ville...

Wow. 10/10 for concept, 10/10 for execution

 

[SackTastic]

Again, this is not the buy-out payment. That is what Leino's buy-out cap hit would have been if this had been a regular buy-out, rather than a compliance buy-out.

Whomever at Capgeek entered Leino's buyout must have clicked the wrong button at first if that was how it looked.

It's since been corrected to $1.2M per for the next 6.

 

[SackTastic]

Now as for why it's written up that way, I don't have any specific answers. There might have been something written about it back when the 2005 CBA came out (I am not aware if the present buy-out option existed prior to then). If I had to speculate, however, with the lowering of the yearly payment in exchange for a longer term, the purpose is to both reduce the yearly salary obligations for the club due to a buy-out and also to reduce the amount it counts against the Players' Share. With the latter point, however, we're getting into relatively esoteric things like escrow and such, that I won't pretend to have put the effort into understanding.

There was no buyout prior to 2005. The only option back then was mutually agreed contract termination.

I recall the general consensus at the time being that the stretched term was more for the club's benefit than anything else. It makes sense all around really. It allows the club to not have to cut a single huge check, helps the player by really allowing them to have that income locked up, and go get another deal.

 

[Sabre the Win]

Too bad you couldn't sign certain players as Pay-as-you-Play type incentive. The worse you are the lower your paid but if you constantly play like a Superstar you would making good money. This would light a fire under every players ass.