In case you missed the news yesterday, the NHL and NHL Players Association (NHLPA) have agreed to terms on a new collective bargaining agreement (CBA). The NHLPA is expected to vote on and ratify the agreement later this week, at which point it will officially go into effect for the next five seasons.
Among the changes to player contracts in the league’s new CBA is the new rule concerning cap recapture penalties on what the NHL calls “back diving” contracts. Okay… so what does this mean exactly?
You may recall that the Vancouver Canucks got dinged $3 million against the salary cap when Roberto Luongo retired from the Florida Panthers. Because Luongo’s 12 year contract (signed by the Canucks) was structured in a way that he’d receive most of his money up front the NHL retro-actively decided that it was a form of cap circumvention. After all, the last few years of the 12 year deal were set up so that Luongo would receive just $1 million in salary, while he received $10 million in its first season.
So what the NHL did was create penalties for contracts like this that effectively stipulates that the team who signs the contract must be on the hook for the entire amount against the salary cap for the duration of the contract, whether or not the player retires or not. In the Canucks’ case, the Canucks still have two more seasons at $3 million+ with Luongo on the books.
That’s a hefty price to pay, but it pales in comparison to potential cap recaptures for Shea Weber, Zach Parise and Ryan Suter. In Weber’s case he could put the Predators at risk of facing an incredible $24 million annual cap hit if he retires in 2024. Ouch.
Parise and Sutter would be looking at a combined $19 million cap hit if the pair were to retire in 2025. Double ouch.
HOWEVER… changes to the NHL’s new CBA stipulate that teams can only be dinged with a maximum amount that equates to a players’ annual average salary if/when he decides to retire early. Say what!?
Weber’s salary is $7.8 million. If and when he retires the Preds cannot be dinged with a cap hit higher than $7.8 million. In the Canucks’ case, because Luongo’s salary was $5.3 million and the recapture is just over $3 million, the Canucks will receive no cap relief.
Clear as mud?