contract questions

[Stevie Y 0]

this topic was discussed in the zetterberg's contract thread but it wasn't a 100% clarified.

From what I understood:

1. if a player signs a contract before the age of 35 his remaining salary will be cancelled and will not count against the cap if he retires / leaves the NHL.

2. if a player signs a contract after the age of 35 his salary is "fixed" and will count against the cap even if he retires.

Does that mean that a player below the age of 35 could be signed for an incredible long contract that is heavily front loaded knowing that the player will retire before the contract ends. Something like:

8 m for 8 years and the 1 m for another 10.

thanks for the clarification.

[Shaman 713]

itd have to be like 8 8 8 5 4 3 1 1 1, for 39 mill over 9 years, for a cap hit of 4.3 i believe and if lets say the 5th year he turns 35 he can retire and the team isnt responsible for the rest of his cap hit, I believe

Edited February 1, 2009 by Shaman464

[toby91_ca 620]

this topic was discussed in the zetterberg's contract thread but it wasn't a 100% clarified.

From what I understood:

1. if a player signs a contract before the age of 35 his remaining salary will be cancelled and will not count against the cap if he retires / leaves the NHL.

2. if a player signs a contract after the age of 35 his salary is "fixed" and will count against the cap even if he retires.

Does that mean that a player below the age of 35 could be signed for an incredible long contract that is heavily front loaded knowing that the player will retire before the contract ends. Something like:

8 m for 8 years and the 1 m for another 10.

thanks for the clarification.

I think the technical answer based on the rules of the CBA is "yes" except for the other, not as technically detailed rule that suggests you cannot circumvent the cap, which your scenario would clearly be trying to do.

In your scenario, the contract would be concluded to be invalid as there is no way the league would accept an 18 year contract for a 34 year old, knowing full well that there is no intention of the player to play to the age of 52.

The reason the Zetterberg contract works is that it is entirely logical that he could be playing until he's 40 and the lower salary in the later years is a reflection of expected drop in play (although that part doesn't really matter).

[betterREDthandead 58]

I think the technical answer based on the rules of the CBA is "yes" except for the other, not as technically detailed rule that suggests you cannot circumvent the cap, which your scenario would clearly be trying to do.

In your scenario, the contract would be concluded to be invalid as there is no way the league would accept an 18 year contract for a 34 year old, knowing full well that there is no intention of the player to play to the age of 52.

The reason the Zetterberg contract works is that it is entirely logical that he could be playing until he's 40 and the lower salary in the later years is a reflection of expected drop in play (although that part doesn't really matter).

Yeah....if it worked the way the OP proposed, everyone worth signing would be signed to these 100-year contracts, the last 80 of which are at the minimum salary. Pay Sidney Crosby $25 million a year til he's 38 and take a cap hit of like $2 million. It wouldn't pass the smell test.

[MacK_Attack 108]

Yeah....if it worked the way the OP proposed, everyone worth signing would be signed to these 100-year contracts, the last 80 of which are at the minimum salary. Pay Sidney Crosby $25 million a year til he's 38 and take a cap hit of like $2 million. It wouldn't pass the smell test.

Not really, because when the contract is signed, the player can't make more than the maximum salary (for the season that the contract goes into effect for) at any point in the contract.

There's also the rule that doesn't allow a contract to drop by more than half from year-to-year, or something like that.

Also remember that the first time the Isles tried to sign DiPietro to a 15-year contract, it was rejected by the league.

Edited February 1, 2009 by MacK_Attack

[thedisappearer 291]

There's also the rule that doesn't allow a contract to drop by more than half from year-to-year, or something like that.

I thought this too, but Z's deal doesn't do this. The drop from year 10 to year 11 is 3. something to 1.

[eva unit zero 271]

Not really, because when the contract is signed, the player can't make more than the maximum salary (for the season that the contract goes into effect for) at any point in the contract.

There's also the rule that doesn't allow a contract to drop by more than half from year-to-year, or something like that.

Also remember that the first time the Isles tried to sign DiPietro to a 15-year contract, it was rejected by the league.

I believe the "Half" rule is that the yearly variation cannot change by half the overall cap hit from any one year to the next year, or by half of any single year to the next year. So the year-to-year limit would be just over $3m, which makes Z's contract perfectly valid.

[toby91_ca 620]

I thought this too, but Z's deal doesn't do this. The drop from year 10 to year 11 is 3. something to 1.

The rule is that the contract cannot drop by more than 50% of the lowest salary in the first 2 years of the deal. In Zetterberg's case, I think that number is $7.4 million, so he cannot have a one year drop by more than $3.7 million in any year of his contract. I think the drop from year 9-10 is $3.6 million and then it trails off to $1 million in year 11 and remains there.

[egroen 384]

The rule is that the contract cannot drop by more than 50% of the lowest salary in the first 2 years of the deal. In Zetterberg's case, I think that number is $7.4 million, so he cannot have a one year drop by more than $3.7 million in any year of his contract. I think the drop from year 9-10 is $3.6 million and then it trails off to $1 million in year 11 and remains there.

This is correct. And it is correct that the salary each year can never be higher that 20% of that year's salary cap. Though if the cap goes down, you will actually exceed that 20%, which is allowed.

Tiny clarification on the "sign by 35" rule -- it is actually if you are 35 by June 30, of the year in which the contract goes into effect.

[betterREDthandead 58]

Not really, because when the contract is signed, the player can't make more than the maximum salary (for the season that the contract goes into effect for) at any point in the contract.

There's also the rule that doesn't allow a contract to drop by more than half from year-to-year, or something like that.

Also remember that the first time the Isles tried to sign DiPietro to a 15-year contract, it was rejected by the league.

Even so, the point remains. Signing someone for an absurd length of time, 20 years longer than he can be expected to play, just for the purpose of reducing the cap hit, isn't going to pass muster with the league.