More CBA
June 30th, 2008 by Jason ChenBob McKenzie at TSN has written an interesting article about the CBA. You can read it here.
It’s a long article, so I’ll just sum it up in short. The current CBA is in its fourth and final year. When the NHLPA and NHL agreed to this, it was only a 4-year agreement, and after the said time the two sides would then meet again to make whatever changes necessary for a new CBA. However, that’s not the biggest problem that plagues GMs this year. In the past three years, the CBA has allowed a “bonus cushion,” meaning that teams were allowed to award bonuses to players if the total amount didn’t exceed 7.5% of the cap. This bonus cushion only applied to players under entry-level contracts, over 35 and on a one-year contract, or veterans with 100+ days on the injured list last year on a one-year contract. This year, the bonus cushion is no longer there. Teams will be penalized if they spend over the cap, even if it was a bonus incentive.
This effectively means that teams will have to even provide a bigger cap cushion in emergencies. In the past teams have on average left $1.5-2m free to open the door to buyouts, trades, or injury replacements. This year, that number may expand to as much as $3-4m, specifically for teams that have a lot of players under entry-level contracts. The Coyotes, for example, will have Martin Hanzal, Peter Mueller, Enver Lisin, Kyle Turris, and Keith Yandle’s potential bonuses to consider in their cap structure. It’s conceivable that each of these players’ cap number could be upwards of $2m by the end of the season, and if the Coyotes don’t leave enough room to accomodate their bonuses, they would face disciplinary actions from the league.
What does this mean for some teams?
- Philadelphia is in a particularly tight bind, with only roughly $1.5m in cap space. Although they don’t have many players on entry-level contracts anymore, they will have to clear significant cap room ($2m+) if they wish to wish to sign a puck-mover like Mark Streit. They will most likely not be big players on July 1st.
- The Ducks are in a similar situation. By buying out Todd Bertuzzi, they have roughly $5.5m in cap room, and while it’s safe to say they don’t need to make a splash on July 1st, their biggest concern remains to be Corey Perry, who will no doubt be given an offer sheet. They have 20 players under contract, but Bobby Ryan and Drew Miller have yet to be signed, and if Teemu Selanne wishes to come back they’ll have to clear room too… for his salary and bonuses.
- The Stars don’t have a lot of money to work with either, and that may be why they’ve stayed relatively quiet in the weeks leading up to the draft and free agency. Brad Richards‘ contract put the Stars in a bit of a bind in their efforts to find secondary scoring, but they should be able to find some mid-range talent. Stu Barnes is still on the fence about retirement, and if he does come back, like Selanne in Anaheim, they’ll have to consider his base salary and potential bonuses into their cap structure.
11 Responses to “More CBA”
By Troy on Jun 30, 2008
Thank God the Bolts got out in time. But that’s the main problem with the salary cap. I like the “hard” system because the front office’s realize “Here’s the max we can spend, so what’s our budget going to be…”, but I do think teams should be allowed to exceed the cap on players whom they have drafted, a take-off of the NBA’s system. Do we all want to see Washington be a great team in the short-term just to inevitably lose Mike Green, or Alzner, or Semin?
I do, but I’m a Lightning fan
By Jason C on Jul 1, 2008
That’s an interesting part about the NBA system, I never knew that. I’m sure it’ll be a topic that Bettman will bring up in the next CBA negotiations, seeing how he is/was David Stern’s protege. However, if the NHL does adapt the NBA system it means more emphasis on drafting, and not necessarily player movement through trades or free agency, which was a large part of the NHLPA’s concerns during the lockout.
The Bolts have to be careful. Rumours are circulating that they’re shopping Boyle because they’d like to spend his money elsewhere, particularly in net, and that’s not taking into account Rolston’s potential contract, which could be around Malone’s. With the moves they’ve done this year it looks like they’re spending up to the cap. The Bolts have only roughly $10m left to spend to flesh out the rest of their roster, and if they retain Boyle and sign Rolston they’ll have very little to fill out the rest of their roster. Keep in mind that they have Alex Picard, Ranger, Lundin, Matt Smaby, and Tarnasky on entry-level contracts. And they still have Stamkos to sign, who is expected to crack the roster this season.
By Troy on Jul 1, 2008
Why the Bolts are shopping their top D-man on a team in need of good defenceman is confusing. What, Janne Niskala, the AHLer from Philly is going to come to the rescue? Matt Smaby, the top prospect before Stamkos was drafted?
The Bolts, as of 7/1/2008, have 11,095,277 in avaliable cap space for 2008-09. But, in the next 2-3 years, Stamkos, Ranger, Lundin, and Smaby will definitely be given larger sums of money once their entry-level deals are expired. Koules said they’ll be aggressive, I just hope they aren’t too aggressive.
Just to clarify, to anyone else reading, what I said in my previous post on the salary cap, if there was that provision in the CBA, that doesn’t mean Buffalo would’ve been able to exceed the cap to retain Briere and Drury. But they would be allowed to exceed to retain Miller or Pominville when they hit the RFA market next year. I do not think that provision would try inhibit the trading and free agency markets severly.
By Mike on Jul 1, 2008
Good article, and interesting discussion. Given the number of teams that aren’t willing to spend to the cap even now, having CBA provisions that allow teams to exceed the cap would only benefit the richest teams, in my view. I do like the idea of having a “Larry Bird exception” in the NHL, but I fear it would really only be exercised by the usual suspects- Rangers, Wings, Leafs, etc.
On the flip side, given the recent propensity of GMs signing their young players to very long contracts, a Larry Bird exception may not go far to achieving what it is designed to do- keep long-tenured players where they are.
By Troy on Jul 1, 2008
Yeah, factoring in the Mike Richards and Alex Ovechkin’s (players with 10+ year deals), it kind of loses its use. It’d be better for use on players comin off their entry-level deals at best. And you point out that only the big markets would consistently be able to exercise that option. Lord knows we don’t want the 1990s again in the NHL.
By Troy on Jul 1, 2008
I forgot to say, Happy Canada Day to all my fellow Canadians
By Jason C on Jul 1, 2008
I’m all for players staying with their respective teams long-term. There was much discussion on Hardcore Sports Radio about the amount of trades during the NBA draft, namely the ones in which players were picked but then automatically traded minutes after.
I think having a Larry Bird Exception in the NHL would be great for creating lasting fanbases.
Troy, I sometimes really do wonder, if the NHL today is better than the one in the 90s.
By Mike on Jul 3, 2008
I don’t understand why the NHL/NHLPA decided to have the fourth year different than the first three of the new CBA? I also wonder why both parties wouldn’t allow teams to pay additional monies on a players salary in order to promote flexibility in trades? I don’t see the point that allowing bonouses/one year contracts/ and all the rest only benifits the rich teams. Low level teams can do that same thing just as easily as the rich teams. The whole point of a salary cap weather it be soft or hard is to have all teams be equal in getting players signed. Players are only going to go to teams that have the potential to win or on the winning track. Hossa turned down 10 mil from Boston and 7.5 from Pitt to go to Det the class of the new NHL not for the money but the chance to win the CUP that Det is the odds on favorite to win it again.
Thoughts?
By Jason C on Jul 4, 2008
I really don’t understand why the fourth year doesn’t have the bonus cushion either. It was rather perplexing when I read McKenzie’s article, and he didn’t give a reason why the fourth year was different from the previous three either.
During the winter GM meetings last year, Burke had proposed that teams be allowed to trade money to even out trades where player salaries were the only hindrance to the deal getting done. Had the GMs been allowed to do so, it would facilitate the possibility of more player movement. Under the CBA, with the cap, it’s really hard to find a trading partner who has available cap space and assets to make a swap for a bad contract. Glen Murray will stay in Boston for the remainder of his contract, but had the rules be changed to allow for additional monetary payments he’d already been in another jersey. I thought it was a fantastic idea, even though the details would have to be fleshed out a little more. I’m not sure what happened, but apparently Bettman didn’t like the idea and it was put off to the side for more talk about goalie pads.
Mike, I’m not entirely sure what you mean by the bonus cushion benefiting only the rich teams?
By Mike on Jul 4, 2008
By Mike on Jul 1, 2008
Good article, and interesting discussion. Given the number of teams that aren’t willing to spend to the cap even now, having CBA provisions that allow teams to exceed the cap would only benefit the richest teams, in my view. I do like the idea of having a “Larry Bird exception” in the NHL, but I fear it would really only be exercised by the usual suspects- Rangers, Wings, Leafs, etc.
On the flip side, given the recent propensity of GMs signing their young players to very long contracts, a Larry Bird exception may not go far to achieving what it is designed to do- keep long-tenured players where they are.
Not Mike me but I don’t see how spending over the cap on bouus or whatever will only help rich teams is my point.
Why no reply on the Redden questions?
By Jason C on Jul 4, 2008
Ah, I got confused, I thought the two Mikes were one and the same.
Spending over the cap doesn’t benefit rich teams. Spending over the cap doesn’t benefit any team in any financial circumstance. Lamoriello was the first to be caught in this situation, when he still had Mogilny and McGillis under contract. He found a loophole and placed Mogilny on the LTI and buried McGillis in the minor leagues to cover up his mistakes. Many teams have followed suit, most notably Philadelphia with Mike Rathje and perhaps Hatcher this coming season.
The only way spending TO the cap may benefit rich teams is because they have the money to pay their players. Poorer teams, or teams that do not wish to spend to a certain amount, will have a hard-time deciding how much money to allocate to their players because of performance bonuses. They’re hard to predict, and many rookie contracts sign entry-level contracts that give outrageous bonuses because teams don’t expect them to reach them. In the odd case that they do reach them, however, they may get very, very expensive. Patrick Kane’s cap hit is 3.75 and not 0.875 because of performance bonuses, and had Toews won the Calder it’d be 3.75 too, but he didn’t so his cap hit’s at 2.8. Imagine if Kane and Toews were co-Calder winners? The Hawks would have to fork over almost a million extra to their players from their revenues. Had Stamkos been signed last year, the Bolts would’ve only had to make room for a 0.875 cap hit, but now that teams are not allowed to have performance bonuses put teams over the cap, Feaster would have to make as much as $4m in cap room for those bonuses.
I apologize, I may have missed it, but what was your question about Redden again?