From all available evidence, the National Hockey League is steadfast in its position that the next Collective Bargaining Agreement with the Players' Association will have a 50-50 revenue share effective immediately, with all future contracts required to have no more than a five percentage annual variation in salary in order to discourage front-loaded deals.
The NHLPA has already agreed to a provision that NHL teams will no longer have the ability to bury contracts in the minor leagues (see
today's earlier blog on Flyers' defenseman Matt Walker). The NHL has also thus far been insistent as a non-negotiable point that there will be no amnesty clause (AKA "compliance buyouts") as part of the CBA.
This setup has the potential to make life more difficult on some NHL teams; especially the big-market, big budget teams. For example, once the AHL waiver option is eliminated, the New York Rangers will be compelled to take Wade Redden's salary back on their cap through the 2013-14 season without an amnesty clause for cap relief.
So how can the NHL ease the cap transition to 50-50 without punishing teams (or players) for pre-existing deals that were signed during the previous CBA?
Here is one way: Re-calculate the cap hits of all existing deals to be based on what
remains on the deal in real dollars and not on the average of the original total value of the deal.
Some Flyers' examples:
* Kimmo Timonen is in the final season of the six-year contract he signed in the summer of 2007. The deal currently has a cap hit of $6.33 million but the actual salary he was due in 2012-13 (pre-lockout) was $3 million. So reduce his remaining cap hit accordingly to $3 million.
* Danny Briere has three seasons left on the deal he signed in 2007. The real-dollar value remaining is $12 million ($7 million pre-lockout in 2012-13, $3 million in 2013-14 and $2 million in 2014-15). His current cap hit is $6.5 million. However, if only the remainder were calculated, his cap hit would be reduced to $4 million.
* The Flyers have already paid Ilya Bryzgalov $15 million worth of his nine-year, $51 million contract in the form of a real-dollar salary last season of $10 million plus a $5 million signing bonus. Since amnesty appears unlikely to be part of the next CBA, the NHL can at least credit what has already been paid toward Bryzgalov's remaining cap hit and reduce his cap hit from $5.67 million to $4.5 million.
By using this cap-hit recalculation method, not ALL players would see their cap hits decrease. Some would go up.
For example, Andrej Meszaros currently has a $4 million cap hit but $4.75 million and $5.5 million of actual salary in 2012-13 and 2013-14. So his cap hit would go up to $5.125 million. Most of the players who would be in the situation of an increased cap hits are players in their 20s who signed multi-year deals after their entry-level deals expired.
Nevertheless, taken on the WHOLE of all currently signed players whose salary cap hits would be adjusted up or down, most NHL teams would see their total current cap figures go down several million dollars. Meanwhile, the currently-signed players would still get their remaining money as called for in the contract; or at least as much of it as the final make-whole provision provides.
The cap figure adjustments would make a team's cap figure much closer to matching its actual payroll (which is something the NHL wants). It would also making it easier to comply with the 50-50 split instead of being penalized for using the 57-43 upon which the temporary cap was set this past summer.
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