Quote:
Originally Posted by opendoor
Capgeek had the rule confirmed by the NHL. They could still be wrong, but I'd give them the benefit of the doubt.
The league wanted to declare war on long term contracts and they did it.
|
They confirmed with the NHL, but are now misinterpreting it. The way that they are interpreting it now makes no sense, for reasons shown above. Every time I've looked at the calculator, up until this week has shown it correctly.
To put it simply, the cap recapture clause works like this.
For a player who's contract falls under the rule, when they retire with years left in their contract - you calculate the difference between the total amount of money that they have been paid, and the total amount of salary cap hit that the team has taken for that play in the same timeframe. The difference is then split up evenly over the number of years left in the contract.
Example:
Player A signs a 10 year contract, For 8,8,8,6,6,6,4,2,1,1 million - totalling $50 million dollars - giving him a cap hit of $5 million per season.
If that player would retire after year 5 of the contract, he would have been paid $36 million, but his total cap hit during those 5 years would have only been $25 million - a difference of $11 million. That $11 million would be split up over the remaining 5 years, giving the team a recapture penalty of $2.2 million over the next 5 years.
If that same player would retire after the 7th year, we would have been paid $46 million, with a total cap hit over that period of $35 million, again, a difference of $11 million. However, now it would only get split up between three years, giving the team a recapture penalty of $3.666 million per year over those three years.
If that player retired after the 9th year, he would have been paid $49 million, and his cap hit over those 9 years would have been $45 million. A difference of $4 million. The team would get a $4 million recapture penalty for the one year.
The idea is to recapture benefit given to teams, not to penalize them.
Total salary paid under the contract - total cap hit over same period)/number of years left on the contract = the amount of recapture penalty for each year remaining on the contract.
It gets more complicated if players are traded under the contract, but it gets calculated for each team for the years played for that team.