For any existing contract over six years, if the player's career ends before the end of the deal, the team that signed him to that deal would receive a salary-cap charge equivalent to the amount of cap benefit gleaned from the structure of the deal. If the player is traded, all teams he plays for would receive a cap hit charge were his career to end early.
See Elliotte Friedman’s breakdown of the Luongo contract for a math-specific example.
When we call this one of the least controversial aspects of the new CBA, it’s because (a) most fans and pundits weren’t in favor of these contracts, and delighted in seeing them punished retroactively and (b) this isn’t a situation that visits but a handful of players and their teams.
According to Cap Geek, there are 40 players that had “cap advantage” contracts of seven years or more before the new CBA was signed. They affect roughly 20 teams with varying degrees of impact – one assumes Brian Campbell will play through 2016, but chances are Ilya Kovalchuk won’t still in the NHL come 2025.
There isn’t going to be much sympathy for teams that handed out these contracts that pushed the limits of circumvention, but as Larry Brooks of the NY Post writes: It’s the NHL that approved them, and one assumes these teams didn’t realize that “cap recapture” was going to be a thing in 2013.
According to Brooks, two players and two 2013 playoff teams could be severely affected by cap recapture: Marian Hossa and the Chicago Blackhawks (12 years, $63 million), and Brad Richards (9 years, $60 million) and the New York Rangers.
If Brad Richards is bought out next month and Marian Hossa is bought out following either this year or next, the cap-recapture will be among the primary reasons management would have felt compelled to act.
The final three seasons of Richards’ nine-year, $60 million front-loaded deal are worth $1 million per. Under the cap-recapture formula that was among Brian Burke’s pet projects, if Richards were to retire with three seasons remaining on his deal, the Rangers would be hit with a dead-space charge of $5.667 million per.
… Hossa has continued to play at an extremely high level for the Blackhawks. But the winger’s 12-year, $63 million deal that runs through 2020-21 features the final four seasons at $1 million per. If he were to retire with two years remaining, the charge would be $9.187.5 million per. If he were to play all but the final season of his deal, Chicago’s dead cap charge would be a crippling $18.375 million for 2020-21.
Obviously, there’s more at play with the Richards buyout than cap penalties: Like the fact that he looked cooked in the playoffs, and whether he and John Tortorella still have a tenable coach/player relationship after this postseason.
But in Hossa’s case, the Blackhawks might have to make a decision about a first-line player whose future against the cap might out-weight his present contributions to the roster.
Again, we side with Brooks here: The teams signed these players under the terms of the previous CBA, the contracts were approved by the NHL and, we believe, allowing teams to lock up their own assets – that they drafted, trained, marketed and built around – for as long as they damn well please is good for business in the NHL. At least for the team, if not for the diminishing results from the player with that contract.
But because Gary Bettman’s GM buddies made him look aloof and made the 2005 lockout look like a gigantic waste of time through these contracts, they were retroactively punished for contracts that Bettman’s League deemed legal under the previous cap.
Of course, the blame falls to the NHLPA here for giving up those 40 players in the negotiation, right?
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