Kukla's Korner Hockey
by George Malik on 01/07/13 at 10:51 PM ET
ESPN's Pierre LeBrun has released a second set of nuts-and-bolts information about the new collective bargaining agreement, and there's a strange twist to what he's calling the "Luongo Rule"--a.k.a. punitive penalties retroactively imposed upon teams that issued "lifetime" contracts to retain their own players, especially if said players are eventually traded:
This is another rule from the league aimed at hammering current back-diving deals (front-loaded, "cheat deals." However, this has changed from its original form when the NHL first proposed it in October.
In the original formula, if a player like Roberto Luongo was traded and retired before the end of his deal, the Canucks (the team who signed him to the contract) would assume his remaining $5.33-million cap early hit in retirement. The new rule in this tentative agreement is different. Now, for any contract in excess of six years, both teams involved in a trade on a contract like Luongo’s would be penalized if he retired before the end of his deal.
To wit: let’s say the Canucks trade Luongo soon. Luongo has played two years of his 12-year contract, the Canucks paying him $16.716 million in salary but only absorbing a $5.33 million cap hit each year. That’s a cap savings of $6.056 million over two years so far for Vancouver. Under this new rule, should the Canucks trade him now and he retires with three years left on his contract, Vancouver would be charged that $6.056 million in cap savings over the final three years left on his deal from 2019 to 2022. However, let’s say for argument’s sake Luongo gets traded to Toronto, the Maple Leafs also would be subject to cap penalties if Luongo retires before the end of his deal.
To wit, part 2: If Luongo were to play the next seven years of his deal in Toronto before retiring, the Leafs would be paying him $43.666 million in salary but only counting $37.31 million against the cap over those seven years, a cap savings of $6.356 million. So if Luongo retires with three years left on his deal (because his salary falls to $1.618 million in the 10th year and then $1 million in the last two years of the deal), the Leafs would get charged that $6.356 million on their cap spread evenly over the remaining three years of his deal.
And obviously, if players under these back-diving deals are never traded, but retire before the end of their deals (Marian Hossa in Chicago), their current teams get charged the cap savings spread evenly over the remaining years of the deal.
Continued, and LeBrun reports that between the draft and June 30th, teams will be able to "interview" unrestricted free agents-to-be, too..
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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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