FanPost

Fixing tail deals in the salary cap

Posted this on a mega thread, but thought I'd fanpost it.

Note, I didn't invent this one, I just like it.

1) Any player retires, their cap always stays on the books, BUT,

2) you can deduct what you would have been paying them from that year off from their cap hit (without taking it below zero).

So lets say player A gets paid 5M per year, flat rate, for 10 years, but retires after 5. His cap hit is normally 5M, but for each of those retired years it is 5M (regular hit) minus 5M (salary due), so his cap hit is nothing. Player and GM both have full flexibility they could ever expect, fair to all, and there is no issue with cheating the cap.

Now let’s say player B frontloads his contract at 10M for each of the first 5 years, and then 1M for each of the last 5. Total cap hit: 5.5M per year. If he retires after 5 years (which would be the old cap-circumventing trick), his cap hit for those years becomes  5.5M (regular hit) minus 1M (which they would have paid him) = 4.5 M. So the team gets some relief, but not a whole heck of a lot. The more his contract says he gets paid at the end of the contract, the more relief his team gets, but then the less front loaded the contract is anyway, meaning it circumvents less of the cap.

 

So the Kovy deal would be funkygroovy, but if he retired in one of those min contract years, the Devils would still be left with 5 M+ in cap hit for each of the remaining years, and nobody to blame but themselves. And this way, no arbitrator would have to make tricky decisions about 42 vs. 44 years old, you wouldn't need complicated formulas about how much your payment could vary per year, etc. In all it's a very simple and elegant solution that nicely chops out all the judgment calls and wrangling.

So full flexibility for straight $ per year contracts, and a penalty to even things out for teams that attempt to circumvent the cap with front loaded deals (unless the player plays out the entire contract, in which case there is no cap circumvention to worry about and the whole issue is moot).


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