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Lose The Guaranteed Contract

from Jesse Spector of The Sporting News,

Say the Montreal Canadiens want to get out from under the final two years and $9 million on Scott Gomez’s contract. Let them do it. Who is going to complain other than Gomez, who has made $23.5 million over the past three seasons in Montreal, and scored 21 goals?

But if teams can break contracts just because they aren’t getting fair value, so can players. David Desharnais had 60 points in a breakout 2011-12 season, but his contract for 2012-13 is only worth $950,000. Why shouldn’t Desharnais be allowed to negotiate new terms with the Canadiens, or find another team that will pay him market value?

If Desharnais’ step forward last season proves to be a fluke, no worries, his new contract is non-guaranteed. If he winds up being a star, he will be paid like one.

Setting up a free-for-all system in which anyone on either side of a contract can walk away from their obligations at any time would lead to chaos, so some restraints would have to be included, and the NHL and NHLPA would have a chance to implement changes that would be financially beneficial on a long-term basis.

Global soccer already has a successful model in place with its system of transfer fees, the lion’s share of which go to the club losing a player, with cuts for agents and the players themselves.


Filed in: NHL Talk, NHLPA, | KK Hockey | Permalink


LivinLaVidaLockout's avatar

Transfer fees as seen in European soccer has no relation to reality for any American sports league.  If you want that to be possible, forget about trades, and forget about small market teams being competitive within the current system.  The soccer system works because there is cooperation between international leagues.  If you want it to work, start a cooperative operation with Slava Fetisov’s KHL and give KHL teams the right to pay the Capitals $50M for the transfer rights of Ovechkin.  You have to have a relegation system as well where if a team like the Coyotes can continually develop young talent but then sells their players for transfer fee money and finishes in last place, they are relegated to the AHL and your AHL champion gets bumped up to play in the NHL.

This would be amazing if this could actually happen IMO but it’s also impossible without any hockey leagues on par with the NHL in terms of viewership (ha!) or skill level.  Talking about “oh, this should be like European soccer!” is great, but it’s also a waste of time based on how our league is set up.  Every major country in Europe seems to have their own soccer league, and each of those have multiple tiers of competitive ball.  Until hockey has enough competitive players, teams and even leagues where you can no longer keep track of how many there are of each, this system would never work.  I’ll keep on dreaming it is possible though.

Posted by LivinLaVidaLockout on 12/10/12 at 07:22 PM ET

George Malik's avatar

No. This is not football, and if Spector hasn’t read the previous CBA, there’s a wee little note that paying any transfer fees to other leagues on a player-by-player basis is considered grave circumvention of the CBA.

In fact, it’s the LAST thing the NHL wants. The KHL has absolutely dreamed of setting up a per-player transfer fee (see: lawsuits about Ovechkin and Malkin’s rights), but the NHL isn’t interested. And with few players of the Ovechkin or Malkin quality popping up in the KHL, SM-Liiga, Eliteserien, DEL, Czech, Slovak, Austrian, Swiss or French leagues, any such system would be counterproductive.

It’s also not interested in the returns of the haves and have-nots, and while being a big-market fan of a team that paid over $70 million in salaries in 01-02, I certainly enjoyed it when the Red Wings could out-spend everybody, I don’t think those days are going to return.

Posted by George Malik from South Lyon, MI on 12/10/12 at 11:02 PM ET

bezukov's avatar

Say the Montreal Canadiens want to get out from under the final two years and $9 million on Scott Gomez’s contract. Let them do it. Who is going to complain other than Gomez, who has made $23.5 million over the past three seasons in Montreal, and scored 21 goals?

... Said someone who doesn’t understand why the players unionized in the first place.

Posted by bezukov from the kids are alright. on 12/11/12 at 12:32 AM ET

Nathan's avatar

Contracts are guaranteed for a reason. The shelf life for most players is short. The guaranteed money is essentially their insurance. Sure, some guys can go on to do TV or radio commentary. Some guys will have gone to a good college instead of playing in junior, and will be able to spin their bachelor’s in business admin along with their sorta-famous name into a steady job. But really, unless you are one of the real top-tier talents, you aren’t going to live off endorsements and appearances and book signings, etc. etc.

Even if we look at the NFL, we can see what happened—high draft picks kept demanding more and more bonus money that’s guaranteed since the salaries are not. And NFL clubs haven’t been scared off of players for signability issues on these big guaranteed bonuses. Someone will sign these players… if signability concerns push a player down, teams like the Leafs, Habs, Rangers, or Wings will sign them and give them those guaranteed bonuses. And if it didn’t happen, you can be sure that then we’d just end up seeing a collusion case against the owners.

Posted by Nathan from the scoresheet! on 12/11/12 at 10:23 AM ET

LivinLaVidaLockout's avatar

Contracts are guaranteed for a reason. The shelf life for most players is short. The guaranteed money is essentially their insurance.

I actually wouldn’t be completely against a system where teams can buy-out players for somewhere between 50 and 100% of their remaining contract.  A team can fix their mistakes when they signed someone for too much for too long and gives the players the security of still earning a large portion of that money.  A prime candidate for a buyout would be DiPietro or Wade Redden.  If you’re convinced DiPietro will not remain healthy and you’d like you to move in another direction, buy him out for 2/3 of his remaining contract.  If you paid a Wade Redden too much and now he needs to play in the minors so you can bury his cap hit, buy him out and let him earn a new contract with another team.

The one problem I see this presenting is it would encourage unhappy players to sandbag and demand buyouts, possibly earning more with their combined buyout+new contract when they shouldn’t be awarded for such action..

Posted by LivinLaVidaLockout on 12/11/12 at 10:54 AM ET

redxblack's avatar

Making contracts open for renegotiation so often would be negating the contracts. We’d have a league of perpetual free agency, and we saw with the Parise/Suter sweepstakes that these team owners can’t adequately deal with free agency in its limited form.

Posted by redxblack from Akron Ohio on 12/11/12 at 11:32 AM ET

J.J. from Kansas's avatar

I would be in favor of allowing teams to cancel contracts if a player clears unconditional waivers first (meaning no team in the league wants that player at that salary).

If he clears, he becomes a UFA.

The biggest concern about a system like this would be collusion. If all 30 owners work together, they can kill off specific contracts simply to force a guy to take less.  I don’t particularly think that’s a strong concern, just that it’s the biggest.

Posted by J.J. from Kansas on 12/11/12 at 11:49 AM 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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