The tacking on of low value years to reduce the AAV was legally allowed by the CBA but was technically a legal grey area of the CBA. The NHL had been warning teams that it was becoming a spiraling out of control problem and they intended to do something about it.
What changed everything was the arbitrator's ruling on the Kovalchuk contract with NJ. He ruled that it was obvious Kovalchuk wasn't going to play those years and that adding on those low value years to lower the cap hit was cap circumvention.
That set a precedent and a legal ruling for cap circumvention on these mega contracts.
The arbitrator's decision in the Kovalchuk ruling also noted the league had already started steps to investigate and potentially withdraw the Luongo, Savard, Pronger, and Hossa contracts.
I believe what happened was that the league realized that a mass withdrawal of contracts for all these players (many already getting paid and served some of those years of the contract) would have been a huge mess for the league.
The compromise was the recapture penalty. Which allowed the contracts to remain, but the penalty was designed to recapture any cap savings if the player retired before the contract ended.
What is really disappointing is the NHL is letting teams to use LTIR to escape the recapture penalty.
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