Thursday, January 12, 2006

CBA Clause May Cause Legends To Retire Early

Its often sad to watch an NHL legend who is no longer a very good player hanging onto an NHL job at the end of his career. I think it is even sadder when an NHL legend retires young and it is clear that their body has a lot more hockey left in it, but we fans will never get a chance to see it. I think the second situation could become much more common as an unintended consequence of a clause in the new NHL CBA that has received some recent media attention.

The CBA uses the average salary over the course of a contract as the salary cap hit for a given player. This is different from using the amount that a player is paid that season as his cost to the salary cap. I'm not sure that this is a benefit to the CBA. I think it serves to complicate things forcing some extra complexities into it to make sure that the spirit of the CBA rules are not violated.

The specific clause required to address this problem is one that says that any player who is 35 years or older who is signed to a multi-year deal and retires before the last year of the contract will continue to have his average salary of the contract used against the team's salary cap in subsequent years of the contract, until the contract runs out. Jes Golbez does a good job of explaining the intent of this clause.

Say I signed Kirk Muller to a 2-year deal (If I ever did, I'd expect you to commit me to the finest mental institution in Canada). The first year pays him $1,000,000 and the second pays him $350,000. The average would be counted in the cap for year 1 @ $675,000, Kirk would be paid $1,000,000 (enticing him to sign for my club), and then when he retires before the second season, we'd be off the hook for the second $675,000 against our cap and Kirk can retire with bags of cash in his hands. Great, but the NHL closed that loophole and saw that players who are 35 and over might pull a fast one like this.

What would be so wrong with charging $1,000,000 to the team's salary cap for the first year of the Kirk Muller deal and $350,000 (which in this hypothetical example is below the NHL's minimum wage) for the second year? Afterall that is in fact what Kirk Muller is paid.

I supposed the problem comes if a team with lots of salary cap room decides to sign away free agents from other teams with heavily front loaded deals that cannot be matched due to salary cap limitations on the previous teams. This problem is magnified if one (unfulfilled) NHL owner agenda is to get rid of guaranteed NHL contracts. However, this problem is partially solved by limiting the percentage that a player salary can change in subsequent years under the same contract.

This clause is in the news recently because there have been several moves that have recently been made that may lead to teams being caught with salary cap hits for players who are no longer playing with them. New Jersey has the case of Vladimir Malakhov who may or may not have retired and is over 35 and signed for next season. New Jersey also has the case of recently waived Alexander Mogilny who is signed for next season, but may retire first if he will be stuck in the minors. Tampa Bay has the case of Dave Andreychuk who was recently waived and is also signed for next year, but may also be forced into retirement. Thus Tampa Bay and New Jersey may take salary cap hits next year for players who are no longer playing with them.

As Bob McKenzie points out, the upshot of this is that when a player reaches age 35, his options may be limited to only signing one year contracts. One case who will likely be affected by this is Joe Sakic (there are many other possible examples but I will use him as a case in point). Sakic turns 37 this summer. He is a still quite a valuable player who was named captain of the Canadian Olympic team. Thus far he has played his career with one franchise - the Quebec Nordiques/Colorado Avalanche (who moved during his career). Annually, he will have to sign a new contract. his options on this contract may be limited to signing one year deals. If at any point, Colorado has a problem with obtaining salary cap room to resign Sakic, he may be forced to look elsewhere for employment (which may lead to him deciding to retire instead). It may force a player like Joe Sakic to become a mercenary accepting one year contracts with whichever team offers in order to complete his career. The grind of being in a new city each year will likely prompt him to consider retirment at an earlier age than he otherwise would have. If you are a fan of players spending their whole careers with one team, this CBA has likely put an end to this practise. It seems clear that a player who remains a valuable NHL contributor but is older than 35 years will likely be forced to a nomadic existance living out a string of one year contracts in different cities. This will likely lead some of these players to retire instead of continue to contribute at the NHL level. That is a shame.

What is the solution to this mess? I think the best solution would have been no salary cap. I don't see how it has improved the NHL. I think the complicated CBA leads to a game that is further removed from the fans where more deals are made for business reasons (without the business details being available to the fans) then for hockey reasons. That strains the relationship with diehard fans. I stand by the statement that a salary cap is bad for the NHL. Of course if we must have a salary cap, I would rather it not be one that is excessively complicated and might lead to NHL legends retiring before they are ready to because they find it too hard to deal with negotiating a new one year contract in a new city each season.

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