Sep 032010
 

I’ll go on record here that I don’t oppose the idea of adding a defined maximum contract length in the next CBA. I think it goes without saying that long-term deals such as the ones given to Marian Hossa, Roberto Luongo, Henrik Zetterberg, Johan Franzen, Duncan Keith and others carry a bit of risk, and IMHO, should be looked at during the next round of negotiation sessions. What I don’t agree with though is the idea that the current CBA – the one that has governed every move, every signing and every trade that every NHL GM has made in the last 5 years – can be changed on a whim.

A well placed source reports that the league has informed the Players’ Assn. that the league will grandfather the recently submitted Kovalchuk 15-year, $100M contract, Luongo’s 12-year, $64M deal that is entering its second season and Hossa’s 12-year, $63.3M deal that also is entering its second season into the CBA under the following conditions:

1. That the cap hit on future multi-year contracts will not count any seasons that end with the player over 40 years of age. The cap hit would be calculated on the average of the salary up through age 40 only.
2. That the cap hit on future contracts longer than five years will be calculated under a formula granting additional weight to the five years with the highest salary.

I understand the NHL’s desire to close the obvious loophole in the CBA. While you can argue as to whether or not some teams are guilty of willfully circumventing the cap, there’s no doubt that these long-term contracts do lower the cap hits for these players, and in some cases by a significant amount.

In that respect, the first point may be enough to deter teams from entering into a long-term contract with a player through his 40′s. (Though looking at these stats from quanthockey.com, perhaps they should lower the threshold further from 40 years of age to 39, when less than 1% of players continue to play.) Looking at current contracts, this amendment would only affect a select few: Hossa, Luongo, Zetterberg, Franzen, Chris Pronger and Dwayne Roloson. Interestingly, Roloson’s cap hit would actually be lower ($2.0 million vs. $2.5 million) if it goes through.

On the other hand, the second point changes the game drastically for all teams. In the last 5 years, GMs have signed 56 players to long-term contracts of 6 years of more (all numbers via CapGeek). Of these players, 46 have a cap hit that is different from their actual salaries; and obviously, the cap hit of their top 5 years is higher than the cap hit their teams are currently charged with.

PlayerTotal SalaryContract LengthCurrent Cap HitCap Hit of Top 5 YearsDifference
Savard28.0574.00714295.41.392857143
Vanek5077.1428571437.440.297142857
Bourque2063.3333333333.50.166666667
Kiprusoff3565.8333333336.70.866666667
Staal57.7578.258.850.6
Ward37.866.36.560.26
Keith72135.5384615387.852.311538462
Nash62.487.87.960.16
Eriksson24.664.14.280.18
Zetterberg73126.0833333337.651.566666667
Franzen43.5113.9545454555.21.245454545
Horcoff3365.560.5
Hemsky24.664.14.220.12
Booth25.564.254.40.15
Olesz18.7563.1253.410.285
Weiss18.663.13.360.26
Kopitar47.676.87.120.32
Brown19.0563.1753.320.145
Havlat30655.20.2
M. Koivu47.2576.757.290.54
Gomez51.577.3571428578.30.942857143
Erat31.574.55.150.65
Legwand2764.54.70.2
Elias42766.40.4
Redden3966.56.80.3
Lundqvist41.2566.8757.2250.35
Spezza497781
Michalek2664.3333333334.60.266666667
Briere5286.581.5
M. Richards69125.757.21.45
Hartnell25.264.24.40.2
Timonen3866.33333333370.666666667
Pronger34.4574.9214285716.681.758571429
Meszaros24644.30.3
Fleury35755.60.6
Heatley4567.580.5
Lecavalier85117.727272727102.272727273
St. Louis31.565.255.50.25
Malone31.574.55.30.8
Ohlund25.2573.6071428574.450.842857143
Phaneuf3966.56.70.2
Hamhuis2764.54.550.05
Ovechkin124139.538461538100.461538462
Backstrom67106.77.30.6
Luongo64125.3333333337.37162.038266667
Hossa63.3125.2757.92.625

Now I realize that most of the above players’ contracts aren’t being investigated for cap circumvention. I did want to illustrate however that other teams (aside from the Canucks and the Blackhawks) have given other players (aside from Luongo and Hossa) multi-year deals with lower salaries in some years; and of course, this lower their cap hits. If the second proposed amendment goes through, GMs, all of whom have planned and operated for 5 years under the guidelines of the current CBA, may now be asked to act differently within the same CBA. A couple of years ago, Tampa Bay was able to re-sign UFA franchise center Vincent Lecavalier (well at least he was supposed to be a franchise center) to an 11-year contract with a sharp diveback in salary in the last 3 years that significantly lowers his cap hit. Under the same CBA next year, Washington may not be able to do the same with Alexander Semin, nor Dallas with Brad Richards, nor Boston with Zdeno Chara. Similarly last year, Chicago re-signed RFA and eventual Norris Trophy-winning defenseman Duncan Keith to a 13-year contract with much lower salaries in the later years that softens his cap hit. Under the same CBA next year, Nashville won’t have the same luxury with their own franchise defenseman, RFA-to-be Shea Weber. Same CBA, different pile (or something like that).

The point is, the league and the players both agreed on the cap formula – after a year-long lockout no less – and both parties have agreed to continue with it to date (at least neither side has asked for the CBA to be terminated) – so why change the rules now? Or at least why cram through such big, game-changing rules with as many as 2 years left in the current agreement? If the NHL had a problem with the Hossa and Luongo contracts when they were signed more than a year ago, why did they register them anyway, conditionally or otherwise? They rejected Kovalchuk’s contract this summer – why didn’t they just reject Hossa’s and Luongo’s? Further, why did they let Hossa play one full year with a contract they thought could be illegal and allow him to play for the eventual Stanley Cup champions? If they void these contracts now, is the league prepared to face the resulting PR and legal backlash? And if they change the CBA mid-term, how do they explain to their GMs that their asset management and planning over the last 5 years is as worthless as the CBA it’s based on?

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