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The NHL, NHLPA, and the new CBA: Making it up as they go along (again) |
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As I was working on my 2013 Blues Preview on Tuesday, I noticed that there was sudden chatter over an agreement between the NHL and NHLPA regarding compliance buyouts and the situations involving Wade Redden and Scott Gomez. Instead of both guys being sent home for the season but getting paid in full so that their respective teams could buy them out at season’s end, now both can (will) get bought out immediately as one of the two compliance buyouts allowed to each team – along with some new rules that the NHL and NHLPA hurriedly agreed to in order to allow it.
I only have two simple questions – the first two in a slew of questions I’m going to ask in the months ahead as more details on the new CBA are released and the final document is published for everyone to read:
1. Did no one ever think about how guys who might be subject to compliance buyouts were going to be treated this season?
2. Does anyone think, “gosh – maybe there’s an easier way they could have handled stuff like this?”
The first part was entirely predictable. I didn’t post on the subject of the CBA after details started rolling out about a new agreement – mainly because information was incomplete, and actual work had me busy doing things. However, one of the first thoughts I had upon hearing “teams get 2 compliance buyouts” and how various rules had been written to handle 1-way contracts buried in the minors was that “someone’s going to get buried at home for a buyout this summer.” The fact that the NHLPA was shocked that a team might consider this is in and of itself shocking – but then again, we’re talking about the same entity that thinks “if you pay me $65 and I have to give you $15, I’m better off than if you pay me $50 and I have to give back none of it.”
Of course teams were going to send guys home. They weren’t going to risk a player getting hurt and having to shell out even more money and have the guy continue to eat up cap space when he wasn’t wanted. How the NHLPA didn’t think about this – especially given the report during one of the negotiating sessions that Gary Bettman told the players something to the effect of, “there’s lots of bad contracts the owners would love to get rid of” – I … well, I know why they didn’t. Arrogance, greed, and a rush to get a deal done no matter how half-assed it were more important than critical thinking and using foresight.
The second question is a little less obvious, and it goes back to discussions about “what is cap circumvention?” The entire cap system as it was drawn up in the 2005 CBA (and arguably as it’s designed to work now) is that at the end of a player’s contract, the dollars paid to a player while he was in the NHL and playing should equal the dollars teams incurred against the cap. As long as that happens, in my opinion there’s no cap circumvention. So, if a player had a 5-year, $20 million contract but counted $18 million against the cap over those 5 years because he was outside the NHL or suspended at some point, if he was in fact paid $18 million during those 5 years then there was no cap circumvention – even if salary didn’t equal cap dollars incurred for any of those 5 years.
In the case of Redden, people will argue the Rangers were “circumventing the cap” because his $6.5 million cap hit wasn’t on the books while in the AHL – but his salary was a flat $6.5 million per year for all years of the contract, so it’s not like the Rangers had gained a cap benefit in the early years of the contract. In my opinion, that’s not cap circumvention; however, the way the NHL and NHLPA had agreed to define the term (a player is outside the NHL, and has a 1-way contract? ZOMG, circumvention must be at hand!), it was – and so Redden was going to count $5,600,000 against the cap even if not in the NHL. In other words, if you agree that “cap circumvention” is as I outline above, the Rangers never circumvented the cap (they just flushed cash into the toilet by putting Redden in the AHL) – but, in the new system, they would have incurred significant dollars against the cap and so at the end of Redden’s deal, the amount he would have counted against the cap would have greatly exceeded the salary he received while in the NHL under that contract.
(Note: I know some people will make an argument against teams putting any 1-way contracts in the NHL, and at some point “not all teams can afford to do it” will come up. Yes, not all teams can afford to do it. Not all teams can afford to spend to the cap, either. Not all teams can afford to give a player $12 million per year, even for 1 year. There’s a phrase that comes to mind: life isn’t fair. Some teams will just have advantages over others, no matter what you try to do. Besides, I suggest a fix for the “bury the guy in the minors” problem down below.)
Gomez was different; he was originally signed by the Rangers to a front-loaded contract, and over the last 5 seasons received $41.5 million in salary while only counting $36,785,714 against the cap. That means teams (both the Rangers and Canadiens combined) saved $4,714,285 against the cap. (By team, the Rangers saved $3,285,714 while the Canadiens saved $1,428,571.) However, had Gomez been stuck outside the NHL this season the Canadiens would have incurred a cap hit of $6,457,187 – or more than the amount of cap savings realized in the first 5 years of the contract from both teams combined. Oh, and the Rangers would have picked up none of that.
I’m not saying that Gomez shouldn’t have counted against the cap at all. Clearly, both teams gained a cap advantage they shouldn’t have had – but is it really equitable to charge the Canadiens almost 4.5 times what they saved against the cap in the 3 years they had him, while the Rangers get off scot-free? Had Gomez been around for ’13-14, that’s even more money the Canadiens would have incurred against the cap above what they had saved, while the Rangers continued to skate away for free.
What should have happened? Two things:
1. The NHLPA should have gone to bat for guys like Redden and Gomez and asked for the ability of players on 1-way contracts assigned outside the NHL to void their contracts and immediately become UFA, with restrictions on rejoining their prior team. Even if guys couldn’t do that until the 2nd time assigned, that would have given Redden the ability to say, “nope – not doing that again, I’m finding another team.” The fact that the NHLPA completely ignored this amazes me.
2. Instead of charging teams “cap hit less $900,000” for guys on 1-way contracts outside the NHL (the $900K figure will adjust up in future years), the formula should have been much more simple: “cap hit – salary for that year.” Instead of slapping words together to come up with “Cap Benefit Recapture Formula” they could have called it what it really is: a Deferred Cap Charge.
The benefit of #1 should be pretty evident, so I won’t elaborate more on it here (though I probably will in a future article). #2 would have accomplished the same thing that the NHL wanted to do – limit the benefits of ultra-long, front-loaded contracts – but it would have been equitable and ensured that “$ incurred” equaled “$ paid while in the NHL” at the end of the contract. Suffice it to say, #2 would have needed a couple minor tweaks to close gaps (and in the Gomez situation, make sure that the Rangers ate that money they saved on the cap in the first 2 years) – but it would have been much more simple, much more fair, and much easier to understand than the mess both sides agreed upon.
The fact that both the NHL and NHLPA have limited this new benefit to only those contracts with a cap hit over $3 million underscores how knee-jerk the reaction is. If compliance buyouts are going to be allowed for all players, why not let teams take one of them now regardless of contract value? Why not reference "Average League Salary" for 2012-13? Why not say, "you can declare your intent now and if the guy in question gets hurt, you can still proceed with the buyout" and just avoid the "screw this, we're not taking any chances - we'll send him home now" scenario that caused both sides to have to rush to figure out a half-assed solution?
In short: the NHL and NHLPA botched this. It’s not going to be the only time you hear about them having screwed up something that should have been pretty simple to handle, and something that anyone paying attention and looking ahead for more than about 10 seconds could have seen. The only question is what the next problem will be, and how the two sides will slap a Band-Aid on it.
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As I finished this article, news came across TSN that the Toronto Maple Leafs have waived Tim Connolly for the purpose of buying him out. The fact that he only has ’12-13 left on his contract tells you just how desperate the Leafs are to get rid of him … but let’s look at this cap impact of this. Buying him out will still cost the Leafs $3,850,000 against the cap; under my proposal, it would have been only $750,000 (his cap hit is $4.75 million, he was scheduled to make $4 million this year). I leave it to others to decide which way would have been more fair.
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