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Custance suggests that owners are engaged in protracted battle regarding lifetime deals’ cap hits

According to ESPN’s Craig Custance (in an Insider-only blog, regrettably), the NHL’s owners are engaged in something of a scrap regarding the ways by which long-term contracts’ salary cap hits are determined, with some owners wanting to come down particularly harshly upon teams that have utilized the current CBA’s method of determining cap hits (based upon the “annual average value” of salaries over the term of the contract) to “bury” high-salary years and signing bonuses over the long haul of lifetime contracts:

It’s still fairly early in CBA negotiations, but some teams are pushing for a restructuring of the way salary-cap totals are calculated. Part of the motivation is to limit future Kovalchuk-like contracts. However, a desire to punish the teams that pushed the limits with past massive long-term contracts must also be fueling the drive.

One suggested solution is that annual salary-cap hits become the actual salary in that season rather than the average salary over the life of the contract. Another solution would be to average the first five seasons or five highest-salaried seasons of these long-term deals to come up with their salary-cap number.

“There are teams nervous this is going to happen,” said one NHL source.

In it’s purest form, calculating salary-cap totals using actual salaries would create a cap crisis for so many teams that it doesn’t seem realistic. For starters, consider that Shea Weber’s front-loaded new contract with the Predators—by itself—would account for nearly 20 percent of the current projected cap of $70.2 million. And that projected cap ceiling will almost certainly decline under the new CBA.

Said one agent, “The fallout from it would be so draconian, it wouldn’t make sense.”

I can’t quote any more of Custance’s article, but he suggests that some owners wouldn’t mind witnessing “amnesty buyouts” of players on long-term deals, but a combination of salary rollbacks and, let’s say slightly less vicious methods of calculating cap hits so that teams with players on lifetime deals are penalized but not forced to buy out the players they’ve attempted to lock up for the balance of their deals (Custance’s example involves cap hits being counted at something like 75% of the actual salary on a given year).

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Comments

HockeytownOverhaul's avatar

How about averaging the previous, current and following year, every year to calculate the cap hit.  Seems pretty fair to me and as the player ages his cap hit starts coinciding with his value on the team.. potentially, unless they’re still kicking ass, then it’s a steal IF they were locked up on lifetime contracts.

Posted by HockeytownOverhaul on 08/20/12 at 07:25 PM ET

George Malik's avatar

Even given my distaste for the Weber deal, I would much rather see the NHL honor its current contracts under the parameters by which their cap hits are currently determined.

The new CBA should not retroactively punish teams for entering into valid contracts with players. That’s stupid and it encourages the kind of de-facto dispersal draft via buyouts which followed the previous CBA’s implementation.

Posted by George Malik from South Lyon, MI on 08/20/12 at 07:43 PM ET

Avatar

amen, George. 

i dont understand the sense of punishing teams for abiding by the rules their owners penned and the NHL approved.

Posted by ryan on 08/20/12 at 10:47 PM ET

tuxedoTshirt's avatar

The new CBA should not retroactively punish teams for entering into valid contracts with players.

The principle of reliance.

Posted by tuxedoTshirt from the Home of the 1937 World Champions on 08/21/12 at 02:45 AM ET

Avatar

The Wings took advantage of these long term deals with Zetterberg and Franzen. !2 year deals for players in their early 30s just isn’t right. Everyone knows these guys won’t be playing in their 30s.

Posted by Johnny M from here on 08/21/12 at 01:49 PM ET

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Paul Kukla founded Kukla’s Korner in 2005 and the site has since become the must-read site on the ‘net for all the latest happenings around the NHL.

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