NHLPA offers remedy for back-loaded contracts | Hockey | CBC Sports

Hockey Night in CanadaNHLPA offers remedy for back-loaded contracts

Posted: Wednesday, November 21, 2012 | 02:42 PM

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One of the biggest issues the NHL wanted to address in any new CBA was long-term, Kovalchuk-esque contracts. The NHLPA did address these in its latest proposal, but it was hard to find an exact example.

So, here's some clarification.
One of the biggest issues the NHL wanted to address in any new CBA was long-term, Kovalchuk-esque contracts. The NHLPA did address these in its latest proposal, but it was hard to find an exact example.

Here's some clarification.

Note that the NHLPA is proposing these measures only for contracts of at least nine years in duration that are signed under the new CBA (so existing contracts would be "grandfathered" and not subject to the new rules).

What the players offered was a rule that would require teams to take any "cap benefit" gained and charge it against their own cap. (There is also an option for clubs to spread it over twice the number of remaining seasons in the offending contract. So, if the player retires with two years left, the proposal allows the team to apply the penalty over four.)

So, let's assume you're a GM and sign a player to a 10-year, $55-million deal. The breakdown is easy: $10 million in year one, down to $1 million in year 10. The cap hit is $5.5 million each year. So, in year one, your benefit is $4.5 million, in year two it's $3.5 million, year three is $2.5 million, four is $1.5 million, five is $500,000, six is minus-$500,000, seven is minus-$1.5 million and eight is minus-$2.5 million.

Then your guy retires. Add all of those up and you're plus-$8 million overall when he quits. The team would then have a choice: it can take that $8 million cap-hit medicine over two years (four million per season) or four years ($2 million per season).

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