Buyouts and Recapture Penalties

[Jacks]

Edit:
It appears that the calculator has been updated and the cap hits aren't nearly as bad as they appeared to be. See post #65
http://forum.calgarypuck.com/showpos...9&postcount=65


This was being discussed a bit in the Richards thread. There could be some shocking buyouts coming up due to the recapture penalties in the new CBA.

http://www.capgeek.com/recapture-calculator/

Per the CBA reached in January 2013, teams receiving a “cap advantage” from existing long-term contracts (defined as seven years or more) will be penalized in the event the player retires or “defects” from the NHL before the contract expires. A team receives a “cap advantage” when the player’s actual salary exceeds his cap hit in a given year. Please note, contracts that fall under the "over-35" rule do not qualify for cap benefit recapture, the NHL has confirmed.

Who would have thought that Hossa might be bought out? Chicago may not have a choice. As we all know his contract is a joke and the last 4 years are at 1M per year. If/when he retires early Chicago will be hit with the following cap penalty.

Retirement year:
2017 = $4,593,750 x 4 years
2018 = $6,125,000 x 3 years
2019 = $9,187,500 x 2 years
2020 = $18,375,00 x 1 year

Brad Richards was just signed to a 9 year 60M contract 2 years ago. He has already been paid 24M for 2 years service. The last 3 years of this contract are at 1M per year. If/when he retires early the Rangers will be penalized.

Retirement year:
2017 = $5,666,667 x 3 years
2018 = $8,500,000 x 2 years
2019 = $17,000,000 x 1 year

If Richards gets bought out he may just have hit the biggest 2-3 year payday in hockey history. I'm glad these teams are going to be punished for these ridiculous contracts.

[Street Pharmacist]

Good point about Hossa. Are there any others? Can't be that many

[Jacks]

Didn't go throught the whole list but if Kovalchuk retires in 2020 the penalty will be $5,466,667 for 5 years. Of course by then that penalty won't be such a big portion of the overall cap and NJ probably won't be as close to the cap as the Rangers.

[dammage79]

Cap Jail! So glad we aren't in it like some of these teams with these p######ed deals.

Just hope in a few more years there will be some balance restored to contracts.

[Jebus]

Wow. This is going to make the next two summers potentially quite interesting.

I think the Hawks are forced to buy out Hossa after next season. No way you can take that kind of risk with the future cap knowing that the last few years are complete bunk. So the Hawks have one more year with this stacked core to make a go of it without being forced to change.
Assuming they don't blow things up if they lose to Detroit tonight.

Hossa would sure look good in the Flaming C two seasons from now..

[opendoor]

Weber's is the worst. $33M penalty divided by however many years left on his deal when he retires. Though the Parise/Suter combo is pretty bad as well. $40M combined for the two of them.

For some of these guys I expect we'll see traditional buyouts near the end of their deals. For instance, here are the options for a guy like Hossa if he wants to call it quits with a couple of years left on his deal:

Cap recapture:

About $9M a year for 2 years
No cash spent


Traditional buyout:

$4.6M a year for 2 years and then $300K for 2 more years
$1.2M in salary paid


So the Hawks could spend $1.2M and gain abut $4.4M in cap space for those 2 seasons.

[Bend it like Bourgeois]

Cool tool.

Can a team re-sign the player they buy out? I assume not.

The red wings are in a pickle. 3 guys will cost them, and no one guy is a huge issue, but the cumulative is >6m if all 3 retire in their mid 30s

[Badgers Nose]

Thanks Jacks!

Seriously, this will be the most exciting off season ever. Between the one-time get out of cap jail free card, huge cap space and 3 first round picks I am going to be very entertained as a Flames fan this summer.

[Bend it like Bourgeois]

Originally Posted by opendoor

Weber's is the worst. $33M penalty divided by however many years left on his deal when he retires. Though the Parise/Suter combo is pretty bad as well. $40M combined for the two of them.

For some of these guys I expect we'll see traditional buyouts near the end of their deals. For instance, here are the options for a guy like Hossa if he wants to call it quits with a couple of years left on his deal:

Cap recapture:

About $9M a year for 2 years
No cash spent


Traditional buyout:

$4.6M a year for 2 years and then $300K for 2 more years
$1.2M in salary paid


So the Hawks could spend $1.2M and gain abut $4.4M in cap space for those 2 seasons.

Do they avoid the recapture penalty through a traditional buy out?

[Robbob]

I quickly did the calculations on Luongo. If he is traded this summer and retires in 2017:

Vancouver Canucks get a $1,486,000 penalty through 2021-22
Team he is traded to gets a $1,104,533 cap hit through 2021-22

Retires in 2018

Canucks $1,857,500
Team $1,725,833

That contract does suck

[LouCypher]

So in essence signing post-apex players to long lucrative contracts is a bad idea and teams that have done so will take quite the hit if they don't use their buyout.

One thing I would question would be that any deals reached under the old CBA were made under those rules, I know there was much controversy with these really long contracts, how ever since they were under the old CBA would there be a grandfather clause for older contracts with only new ones signed after the new rules being effected?

Edit: I did see that it states existing on Capkeep in regards to the contracts, could be both interesting and messy.

[Badgers Nose]

If Kipper retires... ?

I guess the shorter length of that deal saved us from a big problem.

[LouCypher]

Originally Posted by Badgers Nose

If Kipper retires... ?

I think his original deal was 6 years so doesnt apply if its less then 7 from what I can tell

[getbak]

Originally Posted by Badgers Nose

If Kipper retires... ?

I guess the shorter length of that deal saved us from a big problem.

Free and clear because it wasn't seven years long.

[Vinny01]

Lecavilier has to be bought out this year or next. Suter and Parise deals might end up hurting the wild. It is shocking how horrible the 2 deals Feaster tried to get us a #1 C would have crippled the franchise long term

[Jacks]

Originally Posted by opendoor

Weber's is the worst. $33M penalty divided by however many years left on his deal when he retires. Though the Parise/Suter combo is pretty bad as well. $40M combined for the two of them.

Didn't even think of them, even though they are a future bomb waiting to explode I can't see any of those 3 being buyout candidates.

Originally Posted by opendoor

For some of these guys I expect we'll see traditional buyouts near the end of their deals. For instance, here are the options for a guy like Hossa if he wants to call it quits with a couple of years left on his deal:

Cap recapture:

About $9M a year for 2 years
No cash spent

Traditional buyout:

$4.6M a year for 2 years and then $300K for 2 more years
$1.2M in salary paid

So the Hawks could spend $1.2M and gain abut $4.4M in cap space for those 2 seasons.

Do traditional buyout apply here? I really don't know.

Edit: That's assuming they can convince Hossa to play 2 years at 1M. If he quits in 2017 when his salary drops off then they would see the following buyout cap penalties.

Marian Hossa buyout from CapGeek.com

• 2017-18: $4,608,333
• 2018-19: $4,608,333
• 2019-20: $4,608,333
• 2020-21: $4,608,333
• 2021-22: $333,333
• 2022-23: $333,333
• 2023-24: $333,333
• 2024-25: $333,333

[indes]

I thought these amnesty buyouts were cap penalty free? Can anyone verify?

[sureLoss]

Yes the amnesty buyouts do not incur a cap hit.

[Huntingwhale]

For all the grief Sutter/Feaster get around here, thank the good lord that we haven't had any of those crazy decade-long contracts. Wasn't Kipper's (6 yrs) the longest one the Flames have ever had?

Thank god.

[Vinny01]

Originally Posted by Huntingwhale

For all the grief Sutter/Feaster get around here, thank the good lord that we haven't had any of those crazy decade-long contracts. Wasn't Kipper's (6 yrs) the longest one the Flames have ever had?

Thank god.

Agreed but Feaster offered Richards an 8 or 9 year deal at $7M per. We are lucky he chose NY