The NHL is reactionary, and new rules in new CBAs can often be traced directly to incidents in the past that they didn’t like and want to prevent. Chicago, Toronto and Arizona have all been front and centre over the life of the 2013 CBA using the LTIR rules in ways the drafters of those extremely complex rules never intended.
Joffrey Lupul, Marian Hossa, Chris Pronger, Stephane Robidas, David Clarkson and Nathan Horton have all passed through at least one of those three teams on LTIR at the end of their careers. All of them existed somewhere on the continuum of not exactly fully healthy to totally unable to play in Horton’s case. All of those teams, and others, created scenarios where they used the long-term injury relief from the cap hit of an injured player to help themselves while the player continued to be paid in full.
The dilemma is a real one, and the philosophical position that any of this is cap circumvention is one you can argue for hours. But teams can get very unexpectedly stuck with a player with a very large cap hit and/or salary and who may well want to retire (like Pavel Datsyuk seemed to) but doesn’t actually want to give up any of that guaranteed NHL salary (like Pavel Datsyuk, who has had a post-retirement KHL career lasting years). They might just have a player who they don’t want on their roster at all, and need to trade, and the Leafs know how much that costs.
When Marian Hossa was announced as an inductee in the Hockey Hall of Fame, he was already working in Slovakia in a management role, was still on the Coyotes payroll on LTIR, and had been subject to an NHL investigation of Chicago’s initial LTIR claim because the league weren’t convinced the medical reason was legitimate. None of that is the story the NHL wants around a star player good enough to enter the Hall.
Changing LTIR itself would be very difficult and contentious because finding the line on that continuum of health is very tricky. Making it against a rule to trade a contract on LTIR is often suggested, but the more teams you have trying to run at the upper limit all the time, and the tighter that upper limit is, the fewer members of the Board of Governors will agree to that. And two of them who will never agree are two of the most powerful teams in the NHL.
Coming in the backdoor to fix part of the problem indirectly with new 35+ contract rules is one way to limit the number of dead money contracts that will get traded around the NHL. The big losers are teams like Arizona and Ottawa who have tried to structure extremely low cash-payroll teams by letting an insurance company pay the LTIR contract they traded for. They get over the salary cap floor, but they don’t put a better team on the ice.
If that was the problem to be solved, raising the cap floor would do it. But to understand the full scope of the problem, Patrick Marleau is a better example. He didn’t want to retire or faux-retire and go to another league. He wanted to play this season in the NHL, and he may well play next as well. His contract held him back as much as it troubled the Leafs. It’s possible a less sensible GM than Kyle Dubas might have pressboxed Marleau for an entire season to make him quit. This is exactly what a not insignificant number of Leafs fans want to have happen to Cody Ceci. And that’s not what the NHL wants going on either.
They originally brought in the tough 35+ rules to avoid teams signing huge frontloaded deals for full term, to get the player paid most of his salary while he was still likely to play, while giving the team a lower cap hit by averaging it out over more years than anyone ever expected that player to still be capable for. The big penalty to put a stop to that was the total lack of cap relief in a multi-year deal if the player retired or was bought out. As we all learned with Marleau, the Leafs were stuck with it, until they paid Carolina to take the cap hit and solve the problem for everyone.
The new CBA Memo of Understanding contains a new rule that allows a player to sign a multi-year 35+ deal that is not front loaded, and they can retire if they want. The cap hit disappears when they do.
The new CBA MOU says this:
64. 35+ Year Old Rule for Cap Counting
CBA §50.5(d)(i)(B)(5) shall have no application to a multi-year SPC that has: (1) total compensation (Player Salary and Bonuses) that is either the same as or increases from one League Year to the immediately subsequent League Year, and (2) a Signing Bonus, if any, that is payable in the first year of the SPC only.
And the relevant CBA passage which is written in the form of a list of what does count against the salary cap:
All Player Salary and Bonuses earned in a League Year by a Player who is in the second or later year of a multi-year SPC which was signed when the Player was age 35 or older (as of June 30 prior to the League Year in which the SPC is to be effective), but which Player is not on the Club’s Active Roster, Injured Reserve, Injured Non-Roster or Non-Roster, and regardless of whether, or where, the Player is playing, except to the extent the Player is playing under his SPC in the minor leagues, in which case only the Player Salary and Bonuses in excess of $100,000 shall count towards the calculation of Averaged Club Salary ...
Parsing out the meaning of this change: As long as the 35+ contract meets the conditions in the MOU, it won’t count fully against the cap if the player is no longer on the roster. In other words, if they’ve retired or been bought out.
Players on 35+ contracts can be bought out, despite a common belief that they cannot be. Patrick Marleau’s deal was, in fact, bought out. The salary owed is reduced according to the buyout formula, and until now, the full amount of the AAV remained on a team’s salary cap calculation for the full term of the deal unlike with other buyouts.
Under these new rules, the Leafs still couldn’t have bought out Marleau because his deal had signing bonuses in all years. But under these rules, it’s entirely possible that contract would not have been formulated that way.
Has the NHL done much to really deal with the trading in dead money deals? Likely not a lot, at least not until all deals on the books were signed under these rules, with an eye to either accepting they’re buyout-proof by giving them a structure that doesn’t meet the conditions above, or to holding that option open if the player declines beyond his value before the contract ends by conforming to those conditions.
The thing about LTIR that makes it impossible to fix, to my mind, is that it is arguable where the line is between unfit to play in the genuine sense and just not all that great anymore. As we saw with Marleau, though, sometimes a buyout is exactly what the player needs to fulfill their own career goals. And if this new rule helps those players, then it’s a start on coming to terms with aging bodies and a hard salary cap.