Zetterberg admits cap circumvention

[The Shovel Penguin]

Funny, for a few years there, I used to always hear about how the Penguins had "too much money tied into too few players" -- in fact, I didn't hear many complaints about Crosby and Malkin's contracts or any accusations of cap circumvention prior to 2016. I wonder what changed?

 

[Henkka]

He is pretty much saying that he will play for 2 more years as well.

Rookie mistake of him not to mention his equipment allergy.

Those recapture penalties aren't bad. 5 million at maximum if he retires 1 or 2 years earlier. 2.9M if he retires after this season. Red Wings can easily live with that.

They can bring in ELC kid with 925k caphit + Zetterberg recapture 5.1M and it takes ~same as Zetterberg currently (6.1M).

 

[Henkka]

To me, any team that had to use these contracts to win it takes away from their accomplishments.

To me, the last two Penguins cups aren't that impressive and don't really count. They have two amazing players worth 11M a piece on cap circumventing contracts (Gives them easily 10M in capspace) playing against teams with their best players on 8 years deals with huge cap hits.

What comes to Detroit, they didn't use these contracts to win any Cups.

Zetterberg was on 2.65 million contract when they did win 2008 or did reach the finals in 2009.

Same for Franzen, he was on 942k deal at 2008 and 2009.


They got these tail-end deals after the success, and then the success was gone. No past 2nd round since they were signed.

 

[Henkka]

FWIW, Lecavalier was the first true circumvention contract. Franzen and Zetterberg were the 2nd and 3rd ones.

Kiprusoff was first one. It did set the model and there was also retirement before the last cheapest salary season. It caused same cap benefit as this speculated Zetterberg retirement.

***

Miikka Kiprusoff, signed October 10th, 2007. (last season 1.5M, retired before that. caphit benefit Flames got was ~1.0 million)

Vincent Lecavalier, signed July 18th, 2008. (caphit benefit Tampa Bay got was ~1.5M, bought out before the end)

Henrik Zetterberg, signed January 28th, 2009. (caphit benefit for Red Wings was ~1.0M per year, if he reties before those 2 last 1M seasons)

Johan Franzen, signed April 11th, 2009. (caphit benefit was ~0.7M)

Marian Hossa, signed July 1st, 2009 (caphit benefit was ~2.2M per year for Chicago, cropping out last 4 years with 1M)

Roberto Luongo, signed september 2nd, 2009. (caphit benefit ~1.4M, if cropping those 3 last cheap years)

Marc Savard, signed December 1st, 2009. (caphit benefit was ~2.5M, if cropping the 2 last 575k years of the 6-year deal)

***

Also looks like thosee Red Wings contracts were pretty mediocre in cap benefit. Others were more harsh.

 

[Henkka]

Isn't this proof of cap circumvention where the NHL will penalize the redwings?

We will take the cap recapture as a penalty. That's how the rules are at CBA.

Or do we need some extra punishment about this total brutality against mankind?

 

[Pi]

We will take the cap recapture as a penalty. That's how the rules are at CBA.

Or do we need some extra punishment about this total brutality against mankind?

The cap recapture doesn't apply if Zetterberg mysteriously can't play because of an equipment allergy right when he is making next to nothing like Hossa. He goes on LTIR and the Red Wings get away with it.

 

[nmbr_24]

Maybe it's just me but I have no problem with these cap circumvention contracts. Those were the rules, and teams used them to their advantage. How is that any different then what corporations do? Ever tried to get out of a traffic/parking ticket by finding little loop holes? What about going to a store and using a loophole to get something for cheaper, or using a tax break loop hole to your advantage? Literally all of us actively seek out, and do these things on a daily basis. Yet we look down on GMs for finding these loop hools and exploiting them.

The only thing I had an issue with when it came to these type of contracts was the league stepping in and implementing the amnesty buyout period or being allowed to waive certain penalties depending on the circumstance. If teams sign those contracts, they should have to make their bed then lie in it.

Just because people or corporations do things like that doesn't make it okay. We know corporations will violate the law over and over again because they make more money than the fines they get for breaking the laws. That doesn't make it right, it is still wrong.

Violating the spirit of the law or rule is still violating the law, finding ways to get around a rule or law is not desirable. It is a reality because there are many dishonest people who only care about what is best for them and nothing else matters.

The teams know what the intent of the rules were and they choose to violate their own rules that they had to make up to save themselves. It is really kind of ridiculous.

 

[Barrie22]

Just because people or corporations do things like that doesn't make it okay. We know corporations will violate the law over and over again because they make more money than the fines they get for breaking the laws. That doesn't make it right, it is still wrong.

Violating the spirit of the law or rule is still violating the law, finding ways to get around a rule or law is not desirable. It is a reality because there are many dishonest people who only care about what is best for them and nothing else matters.

The teams know what the intent of the rules were and they choose to violate their own rules that they had to make up to save themselves. It is really kind of ridiculous.

But there were no rules against what teams were actually doing though.

So if there are no rules against it, then how are they breaking the rules?

These contracts were actually just smart GM's using the cap contracts to there advantage.

The lecavalier contract was a very good contract until he fell off a cliff at the age of 32. Now tampa is paying him 1.7 million a year until the year 2027.

The problem is that teams started to push the boundries of what was good contracts to even the biggest homers can realize is not realistic. Kovalchucks blocked contract was a perfect example of going to far. Even his allowed contract was to far. Kovalchuck at the time of the blocked contract was 27 years old, he signed for 17 years. That contract would of brought him to 44 years old.

 

[ArGarBarGar]

The cap recapture doesn't apply if Zetterberg mysteriously can't play because of an equipment allergy right when he is making next to nothing like Hossa. He goes on LTIR and the Red Wings get away with it.

Unless they change the rules they can't do anything about that, nor should they.

The Wings will suck, anyway.

 

[H3ckt1k]

In 2 years will his back even allow him to play hockey? I dont think he needs to suddenly become allergic to his equipment...

 

[Mr Jiggyfly]

Crosby is on a cap circumventing contract. That's just a fact.

First a Leafs fan making accusations about the Pens having cap circumvention, now a Flyers fan. Here we have the two org with some of the most blatant circumvention moves since the cap was put into place.

You'd think Leafs and Flyer fans, of all fans in the league, would keep the stones in their pockets in regards to throwing accusations like this at other franchises.

It doesn't get any more comical and ironic than this.

 

[Price is Wright]

It would be a better league if the best players demanded max contracts, but they don't because they know there's a lot of endorsement money coming in. They can lose a few million on their contract and pick it up in a Gatorade commercial.

That's not cap circumvention. That's just taking less. Besides if Crosby did take Max it would have just meant Fleury being traded years ago.

 

[Henkka]

In 2 years will his back even allow him to play hockey? I dont think he needs to suddenly become allergic to his equipment...

There has been nothing wrong on his back after the surgery. Zero missed games on last 2 seasons. 5 missed games 3 seasons ago because of different minor injury.

 

[Lazlo Hollyfeld]

There has been nothing wrong on his back after the surgery. Zero missed games on last 2 seasons. 5 missed games 3 seasons ago because of different minor injury.

Playing a full season does not equal nothing wrong. Pre surgery Z played until the pain became intolerable.

I honestly don't know what the status of his back is presently but I would be surprised if there was nothing wrong with it. Most back problems never go away even with surgery.

Especially when you consider he's had the whole team strapped to his aching back for a while now.

 

[WesMcCauley]

...
this is actually such a dumb opinion

I agree he wrote it in a dumb way but he has a point. Cap space is extremely valuable in a hard cap NHL. When some teams were allowed to sign players to monster deals(cap circumvention deals) its a huge advantage for them because other teams arent allowed to do it now.

Duncan Keith, Zetterberg, Hossa etc

 

[tony d]

Got to think this sort of thing is going to be looked at strongly in the next CBA. As to what I'd like to see happen: Each team gets to sign 1 player, their star player, to a deal and it not count vs. the cap. Might prevent things like cap circumvention from happening.

 

[mouser]

Got to think this sort of thing is going to be looked at strongly in the next CBA. As to what I'd like to see happen: Each team gets to sign 1 player, their star player, to a deal and it not count vs. the cap. Might prevent things like cap circumvention from happening.

All they'd have to do is reduce the cap by $8m-$10m as well to offset that "capless" player.

TANSTAAFL

 

[Mount Suribachi]

Just because people or corporations do things like that doesn't make it okay. We know corporations will violate the law over and over again because they make more money than the fines they get for breaking the laws. That doesn't make it right, it is still wrong.

Violating the spirit of the law or rule is still violating the law, finding ways to get around a rule or law is not desirable. It is a reality because there are many dishonest people who only care about what is best for them and nothing else matters.

The teams know what the intent of the rules were and they choose to violate their own rules that they had to make up to save themselves. It is really kind of ridiculous.

As they say in F1, "there is no spirit of the law, there is just the law"

What Detroit (and Chicago etc) did was completely legal according to the NHLs rulebook. That was the NHLs first mistake

Their second was the completely over the top punishment of NJ for doing what everyone else was doing.

The 3rd was not changing the rule ASAP.

The 4th was introducing the Cap Recapture penalty, retrospectively punishing teams for signing contracts that were perfectly legal under the NHLs own rules.

 

[mouser]

As they say in F1, "there is no spirit of the law, there is just the law"

What Detroit (and Chicago etc) did was completely legal according to the NHLs rulebook. That was the NHLs first mistake

Their second was the completely over the top punishment of NJ for doing what everyone else was doing.

The flaw in this argument is the independent arbitrator agreed with the NHL that what NJ did wasn't legal.

The NHL/PA cut a deal not to arbitrate whether what Detroit, Chicago, etc did was legal. They might have been ruled legal, they might have been ruled circumventions.

The 3rd was not changing the rule ASAP.

The NHL can't unilaterally impose changes. Those changes have to be collectively bargained with the PA. It took the Kovalchuk arbitration win before the PA would agree to change the rules.

The 4th was introducing the Cap Recapture penalty, retrospectively punishing teams for signing contracts that were perfectly legal under the NHLs own rules.

What some see as punishment others see as holding teams accountable for those contracts.

 

[KingsFan7824]

The teams know what the intent of the rules were and they choose to violate their own rules that they had to make up to save themselves. It is really kind of ridiculous.

Not really that ridiculous. Even though there's a communist style cap, it's still a capitalist style results business. If you lose out on the player, you're more likely to be fired, so you do what you have to do to get/keep the player. During CBA negotiations, the owners have the upper hand, since they have the money. During individual contract negotiations, the players have more leverage, since they have the talent. The GM's get caught in the middle.

 

[Curufinwe]

First a Leafs fan making accusations about the Pens having cap circumvention, now a Flyers fan.

It's not an accusation. All the contracts that are subject to cap recapture penalties are, by definition, cap circumventing contracts.

https://sports.yahoo.com/blogs/nhl-...p-circumventing-contracts-153717517--nhl.html

As CapGeek put it:

In order to punish teams for signing “back-diving” contracts under the terms of the 2005 CBA, the NHL implemented a “cap advantage recapture” rule in the 2013 CBA. Back-diving contracts under the 2005 CBA typically had extra years with low salaries tagged on at the end with the purpose of bringing down the contract’s annual average salary/cap hit. The theory was players would retire and never play those low-salary years, meaning the player would have received more salary than the team was actually charged against the salary cap.

The cap advantage recapture rule effectively forces teams to “pay back” any “cap advantage” they received from these contracts, should the player retire or defect from the NHL before his contract expires. If the player fulfills his contract in full, there are no cap advantage recapture penalties. The 2013 CBA states that any long-term contract — defined as seven years or more — entered into on or before Sept. 15, 2012, is eligible for cap advantage recapture if a team received a “cap advantage” from it at the time the player retires or defects from the NHL.

 

[Riptide]

Crosbys deal is circumventing the cap, even if he left money on the table.

Malkins on the other hand just left money on the table.

It can only be cap circumvention if the player doesn't plan on playing out those seasons, and those years were only added to lower the cap hit.

However given that the years we're talking about are his 35th, 36th and 37th year old seasons, odds are good (health permitting) he will be playing those seasons out in full... which means all he's guilty of is giving the Penguins a very good deal and not circumvention. However if his plan is to retire at the end of the 21/22 season when he's 34 going on 35 years old... THEN you can ***** about how he signed a contract that circumvented the cap.

 

[Riptide]

Wait, hold up...

A Leafs fan is accusing the Pens and other teams of cap circumvention, when the Leafs traded Clarkson for Horton in a joke of a trade to circumvent the cap?

Nice hypocrisy.

At least the Crosby contract is actually legit, while the entire hockey world knows what the Horton-Clarkson deal was about.

The cap was suppose to take away the big revenue teams advantage, and low and behold...

As a Leafs fan, I'd be really careful about tossing stones at other teams in regards to cap circumvention.

Not to mention Marleau's new contract that just screams "waiving NMC, traded to a new team, then retiring - all after July 3rd of his 2nd season".

 

[Regal]

It's not an accusation. All the contracts that are subject to cap recapture penalties are, by definition, cap circumventing contracts.

https://sports.yahoo.com/blogs/nhl-...p-circumventing-contracts-153717517--nhl.html

As CapGeek put it:

No they're not. They're only punished if they're not played out and a team receives the advantage of a lower cap hit than salary paid out over the course of the deal. That's the whole point. Otherwise it's the same as a front loaded deal

 

[Riptide]

Can someone please explain to me why the yearly cap hit and actual salary paid are not the same?

Lets look at these two contracts. Both 7 yr 42 million dollar deals, both structured very differently. I'm going to ignore the signing bonuses as that's a different subject and just looked at the yearly compensation:

Lucic: 8m, 8m, 7m, 6m, 4m, 5m, 4m
RNH: 6m, 6m, 6m, 6m, 6m, 6m, 6m

So there's several reasons why it's advantageous to both the team (if they can afford it) and the player to receive more money up front and have it tail off towards the end of the contract.

1) Interest/investments - Lucic would have in the first 3 years earned an additional 5m that he's now getting interest on that will compound long term. If he's getting a 10% return, that's an extra $500,000* that RNH will never ever see - despite the fact that both have 7 yr 42m dollar contracts (assuming both invest the same way, yada yada yada). *Obviously not exactly - it's probably more, as the interest is done yearly, and would be compounded upon - but you get the idea.

2) Less risk to the team. Regardless of one's individual thoughts on these two players, some people look at RNH and his contract and think yuck - 4 years left at 6m AAV, and he's owed 24m over that span and he's not playing at a level worth that AAV. As long as the player performs, there's no issues, but if his play slips at all, moving a big contract gets harder to do with the more salary owed on it. Lucic for example in his final 4 seasons will only be owed 19m. So while contending/cap teams look at the AAV, every team has a budget, and ML having 5m less being owed to him (if both players are just as effective, yada yada yada) will make him easier to move down the road should they need to do it. Obviously there's a little more to it then just that (age, position, effectiveness, etc), but you can see how it could be a factor depending on where you're trying to trade him to.

3) Cheaper to buy out and more guaranteed money to the player if they are bought out. Again, looking at these contracts, if Edmonton for some asinine reason decided to buy out both contracts after 3 years (we'll pretend that RNH gets bought out at 66%), RNH would cost EDM 15.84m to buy out, while Lucic (ignoring signing bonuses and pretending it's straight salary) would cost 12.54m. Would still suck, but that's still money saved to make a problem go away.

So there's lots of reasons that are in both parties best interest to be allowed to have fluctuating contracts (aka back diving contracts) that have absolutely nothing to do with circumvention. Basically... every player should be pushing for these types of deals (regardless of length) and every team should want to sign contracts like this as long as their budget allows for it - as there's very little downside and several - abet minor advantages.