Monday, August 3, 2009

Cap And Crunch

Anaheim calling to the hockey world...

With the slow offseason news cycle, Daniel and I had decided that August would be a contest to see who would resort to asking an inane hockey question first. The loser would write the prompt: What's the greatest hockey movie of all time? Unfortunately, only two days into the contest, Daniel threw in the towel.

But rather than subject you to a discussion of Youngblood, I decided, as the winner, to go with this prompt:

This week, the NHL announced its intentions to examine the contracts of Marian Hossa and Chris Pronger. Both contracts are severely front-loaded to reduce cap hits, and the NHL is specifically interested in the drops in salaries in these deals after the age of 40, a pivotal year for players considering retirement.

So, Daniel, did Philadelphia and Chicago circumvent the salary cap, here? And assuming they did, is there anything wrong with that?

I'd like to point out that saving readers from the inevitable movie prompt should not be seen as a negative thing. Then I'd like to point out that I'm not a lawyer, so I don't really know what the league thinks it's going to find. I am under the impression that the average salary of a contract is the figure used for a cap hit. If there is language in the CBA that alters that fact in given circumstances, I am unaware of it. Thus, my immediate reaction is to say that Chicago and Philly have not circumvented the cap. But that's just the letter of the law as I understand it.

From an ethical perspective, this is the type of deal-making that undermines the attempts to bring parity to the league. This entire situation is a gray area that the league must be immediately regretting. The fact is, every GM is looking for a way to give his team a competitive edge, just like every player on the ice. It's only natural that they find a way to walk in the gray area of the rules. If the league wanted this to be clean cut, it should have anticipated this problem and made sure there was a fair way to negotiate contracts. You can't get mad at a GM who uses his understanding of the collective bargaining agreement to negotiate an awesome deal-- It's like hating on college kids who pick the puck up with their sticks and tuck it into the net. How are you going to be mad at somebody who's just better than you are?

Maybe the league needs to think about a system where there are two types of contracts: ones where the variation of the salary warrants calculating an average for the cap hit, and ones where the dollar values are so far apart that the player's yearly salary is the number used for the cap hit. I think the only real problem here is that the league left a gaping loophole in its creation of the salary cap. I don't agree with what Chicago and Philly have done, but I don't think the league has any way of punishing them for this.

Well, I think the league's issue here is whether or not Pronger or Hossa stated that they planned to retire during these tacked-on years. Signing them to additional years under the league average is one thing, but signing them for seasons that they have no intention of playing is quite another. If the NHL suspects that there was an attempt to defraud the league, then I understand the investigation.

On paper, Hossa and Pronger are committed to play these years, and that's why the league approved it. If we signed Bobby Ryan to a contract like this, I can't imagine the league having a problem. We wouldn't be circumventing the cap (until/unless we bought him out and re-signed him). This is really only an issue with a player's "last" contract. And I'm sure the league plans to address it, in all its various forms, soon.

Yes, it's circumventing the cap, but it's 'cute' when these teams do it, as it's borne of some serious salary mismanagement. I can't call it "wrong"; I'm tempted to call it "sad." It's like someone with bad credit writing a bad check.

I reserve the right to change my tune when Chicago finds a way to keep Duncan Keith.


Joe said...

And I'm sure the league plans to address it, in all its various forms, soon.

No sooner than the next CBA, for sure. No way are you getting players to cave for the NHL. While we're talking about it, the NHLPA should watch the NFLPA very carefully, as they're gearing up for a labor battle themselves, and the NFLPA is doing everything they can to start public opinion against the owners and in favor of the players, by being very proactive in explaining things to the fans and pointing out at every opportunity that the NFL owners opted out of the current CBA, and are the ones who will actually earn a profit by locking the players out once the CBA expires. The NHLPA should keep that in mind this time, because a second lockout could really hurt the owners bad, especially if the players nail the owners to the wall.

Yes, it's circumventing the cap, but it's 'cute' when these teams do it, as it's borne of some serious salary mismanagement. I can't call it "wrong"; I'm tempted to call it "sad." It's like someone with bad credit writing a bad check.

I don't think agree with this. Maybe with Philly, its accurate, because Philly has been in cap hell for about 2 years now. But there were teams doing these sorts of deals before that, including the Red Wings. As long as it remains a doable strategy, it remains a savvy business move, just from an operating under a salary cap perspective.

I think these deals are patently bogus, and that there ought to be a limit on contracts of 7 years, but as for the current situation, my feelings are pretty much "tough noogies". If the idiots who drafted up this CBA couldn't anticipate such consequences, then those idiots should live with those consequences. Next time, don't send a dumbass to do a thinking man's job. In all honesty, I bet you a group of some of the web's better bloggers could layout a better CBA than this one.

Anaheim Calling said...

I would say a well-written CBA is a lower priority than a well-negotiated CBA. This is a loophole that I would think the NHLPA has a great interest in keeping.

On the "cute" comment, I don't remember Detroit ever tacking on seasons under the league average during a player's AARP years. But that would be the sort of team that would suck the cuteness out of these deals. Any team using the loophole to load up and contend for the Cup on a consistent basis would draw out my anger. But, if you look at Detroit and Pittsburgh, they have big contracts, and they're paying their big contracts evenly across the length of the deals.

Philadelphia is just going to have to wait their way out of this problem. And Chicago probably signed its last big-name free agent for the next 3 offseasons. Call me a big softy, but I just can't muster up the anger on this one.

Joe said...

Johan Franzen's 11 year deal finishes with seasons of 2M, 1M, 1M, to pull his cap hit down to under 4M. Zetterberg's 12 year deal pays him 7M or more for the first 9 years, then finishes with a 3.35M, 1M, 1M to drag that cap hit down to just over 6M. Datsyuk's contract is a static 6.7M/yr for every year, but I think thats only because no one had thought of the super long term deal yet when he signed that. If the deals for Z and the Mule aren't circumventing the spirit of the cap, I don't know what is.

I'm not really angry about the deals, but I do think they're something that is bad for the game overall, because it inhibits parity. I won't fault a GM for using creative thinking to circumvent the CBA, but I'd definitely like to see this loophole closed in the next CBA.

Anaheim Calling said...

See, it's hard to say with deals that carry you right to the age of 40 and don't drop below 1M. I mean, at that point, as long as the team doesn't buy you out and re-sign you, they're still paying you money over time that averages out to the cap hit. I don't think front loading a guy to a contract that takes him to the age of 40 circumvents the cap. He will likely play those years.

But if a team loads up on big free agents in their 30's by signing them to superfluous years at 500K a year, that's totally different. That's putting together a contract so you can snag an aging free agent on the qt.

It's like I said, if we signed Bobby Ryan to a 12 year deal that dropped to 500K in the last few years, that's not circumventing the cap until/unless we bought out those last few years and re-signed him. If that's what Detroit plans to do, then it's circumventing the cap. If they just want to make these contracts easier to move when the guy turns 38 or if they just want to manage their money such that they're not paying these guys as much salary down the line, they're free to do that. I think the NHL can live with lifetime deals, they're taking a stand on afterlife deals.

Joe said...

I get what you're saying, but I think tacking on the 2-3 tiny years at the end of a long term deal to crash the cap hit down like that is definitely violating the spirit of the rule. Its not as egregious as some other contracts, but I think its definitely something that ought to be worked out of the NHL in the future.