In today’s NHL salary cap era, teams face considerable risk for signing a player to an expensive, long-term contract, especially if it was one of those heavily front-loaded deals allowed under the previous collective bargaining agreement.
Though the intent was to achieve an affordable cap hit, some of those deals can become burdensome over the long haul, taking up valuable cap space better spent on depth throughout the lineup.
Management is gambling the player will continue to perform as well over most of the contract’s tenure as he did at the time he signed the deal. While it’s still too soon to determine how most of these contracts pan out, we’re beginning to see instances where they are hurting some teams over the long term.
Few feel any sympathy toward the Tampa Bay Lightning for inking Vincent Lecavalier to an 11-year, front-loaded contract. True, the current management and ownership inherited his contract, while Lecavalier’s decline has been largely because of injuries. Still, the Lightning are stuck with a very expensive, now-brittle talent on the downside of his career.
Though Lecavalier has a full no-movement clause, even if he waived it, the remaining years of his contract (which expires in 2020) and the average annual cap hit (over $7.727 million) are as much a hindrance to a trade as his movement clause.
The Lightning’s best option to rid themselves of Lecavalier’s salary is via amnesty buyout, which is the two-year window allowing NHL teams to buy out a player’s contract with no penalty against their payroll. Teams have this summer and next to avail themselves of this scheme, and only on a maximum of two players. They can either buy out two this year or next, or one per year.
The Lightning are just one example of a team carrying a burdensome contract. The New York Islanders (Rick DiPietro), Buffalo Sabres (Christian Ehrhoff), New York Rangers (Brad Richards), Philadelphia Flyers (Ilya Bryzgalov) and Colorado Avalanche (Paul Stastny) are among others.
Sometimes, a team can find a rival willing to take an expensive mistake off their hands. A notable example was the NY Rangers shipping Scott Gomez and his $7 million-plus cap hit to Montreal in 2009, and the San Jose Sharks dealing Dany Heatley (whose $7.5 million cap hit they took off Ottawa’s hands) to Minnesota in 2011.
In most cases, however, the contract’s term, value or both can make a player almost impossible to move.
It’s assumed lucrative contracts come with no consequences for the player. As we’ve seen in the recent case of Vancouver Canucks goaltender Roberto Luongo, however, such contracts can be as much a millstone around the player’s neck as it can be around management’s.
It’s difficult to fault Luongo for inking that 12-year, $64 million contract back in September 2009. He was among the league’s elite netminders, a contender for the Vezina Trophy, who at that point had carried the Canucks in 2007 and 2009 into the Stanley Cup playoffs. They were offering a deal which would ensure he and his family would be set for life. What player wouldn’t leap at that opportunity?
The Canucks naturally saw him as not just part of their long-term future, but part of the foundation of a Stanley Cup contender. They assumed he’d remain an elite netminder for years, and their front office (led by GM Mike Gillis) willingly opened the vault to keep him in Vancouver.
It seemed like a good idea at the time, but by the summer of 2012, the situation had changed.
The Canucks were facing a coming cap crunch. Luongo was being outplayed by the younger, cheaper Cory Schneider. The Vancouver fans, who once serenaded him with choruses of “Luuuuuuuu!” had changed the tune to “Boooooooo!”, blaming his inconsistent 2011 Stanley Cup Final performance for the Canucks failure to win the championship.
Luongo and Canucks management last summer agreed a trade would be beneficial for both sides. He still held a no-trade clause, however, and reportedly nixed a trade to the Toronto Maple Leafs because he believed a trade to the Florida Panthers (his destination of choice) was close.
That deal failed to materialize, leading to Luongo’s subsequent willingness to widen his options of preferred destinations, though to date neither he or the Canucks will confirm what they are.
Throughout the lockout and most of this shortened season, there was rampant speculation Luongo would be dealt to Toronto. In the hours leading up to this year’s trade deadline, the two teams were still hashing out terms for a trade, but the deal-breaker was the Leafs insistence the Canucks pick up a portion of Luongo expensive salary.
When the deadline passed and Luongo wasn’t moved, he wasn’t shy in explaining why. “My contract sucks”, he told the press, adding if he could scrap it, he would.
Problem is, NHL contracts are guaranteed and cannot be renegotiated. Teams can buy out a player’s contract, usually at the cost of two-thirds the remaining value spread over twice the remaining tenure. And of course, teams can avail themselves of amnesty buyouts this summer or next.
The Canucks could resolve this situation via amnesty buyout, but management believes there’s still a market for Luongo. To improve his trade value, however, the Canucks could have little choice but absorb part of his salary, a tactic which became allowable under the current CBA.
As per CapGeek, a team can absorb no more than 50 percent of the actual salary or cap hit, and the aggregate cap hits retained cannot exceed 15 percent of the upper limit of the salary cap.
Luongo’s situation could eventually lead to a push in the next round of NHL collective bargaining to allow some form of salary renegotiation.
The NHL team owners could push for non-guaranteed contracts, which is anathema to the NHLPA. Given Luongo’s situation and the possibility of similar ones emerging over the next 8-10 years, we could see a provision in the next CBA whereby the player or the team, at a set period of time, has the opportunity to either renegotiate or terminate a contract.
For the time being, it remains to be seen if the Canucks will find a suitable trade partner this summer for Luongo. As The Toronto Star’s Damien Cox so eloquently put it, the veteran goaltender “remains high and dry in Vancouver, stranded by riches he once thought were a reward”.
Over the course of the new NHL CBA, more players could find themselves in the same boat.