The new NHL collective bargaining agreement (CBA) could result in a higher-than-normal volume of player movement this summer.
Some things, of course, will remain the same. The NHL still has a salary cap. Teams are allowed to exceed the cap ceiling during the off-season by up to ten percent, but must be cap compliant when the regular season begins.
Clubs can still gain a measure of cap relief by placing an injured player on long-term injury reserve (LTIR) to spend up to the amount of that player’s cap hit for next season, less the amount of available cap space at the time he’s placed on LTIR on replacement players. That tactic is usually employed when a team is pressed for cap space heading into the new regular season.
One notable difference this summer is the salary cap ceiling is dropping, from $70.2 million to $64.3 million, as mutually agreed upon by the league and the NHLPA.
As a result, a number of teams could be forced to shed salaries via trades or contract buyouts. A quick look at CapGeek indicates the Philadelphia Flyers, Vancouver Canucks, Chicago Blackhawks, Tampa Bay Lightning and Boston Bruins among the teams with limited cap space, though some (Flyers, Bruins) could garner some cap relief starting next season via LTIR (Chris Pronger, Marc Savard).
Because of the shortened season and the late start to the Stanley Cup Playoffs, the buyout period commences 11 pm ET on June 26 (48 hours following the completion of the Stanley Cup Final) and ends at 5 pm ET on July 4.
Compliance buyouts are a new feature for this year and next, allowing teams up to two contract buyouts which won’t count against their salary cap. The formula remains the same – two-thirds the remaining value for those 26 and older, one-third for players 25 and younger, over twice the remaining tenure of the contract – as a regular buyout.
Like a regular buyout, the player is prohibited from signing with his former team for one season. It was believed a way around this would be if a team trades a player to another club and he is subsequently bought out, it would allow him to return to the club which traded him. The league, however, recently notified general managers such a move would be considered cap circumvention.
Teams have the choice of using their compliance buyouts on two players during this year’s buyout period, or two next year, or one this year and one the next. After next June, no further compliance buyouts will be allowed, meaning teams will have to use the regular formula (two-thirds or one-third the remaining salary spread over twice the remaining tenure) which counts against the cap.
Already, we’ve heard the Tampa Bay Lightning will use a compliance buyout for Vincent Lecavalier, the Philadelphia Flyers for Ilya Bryzgalov and Daniel Briere, the Montreal Canadiens for Tomas Kaberle, the Toronto Maple Leafs for Mike Komisarek and the Chicago Blackhawks for Steve Montador and Rostislav Olesz.
Another new feature is teams are now allowed to retain up to 50 percent of a player’s salary/cap hit and bonuses in a trade. A recent example was the Toronto Maple Leafs retaining $500K of the combined salaries of forward Matt Frattin and Ben Scrivens when they acquired goalie Jonathan Bernier from the LA Kings. That allowed the Kings, tight for cap space, some additional wiggle room to re-sign key players.
As per James Mirtle of The Globe and Mail, teams can only have three contracts on the books where they’ve retained salary in a trade; can retain up to only 15 percent of the salary cap in a given year, meaning the maximum for next season is $9.645 million; plus a contract can only be moved in one of these deals twice.
That could provide a boost to a trade market which became stagnant in recent years as teams struggled to remain cap compliant over the course of a season.
As for contracts, teams can re-sign their own players for up to eight years, while seven years is the maximum for unrestricted free agents. Salary variability can be no more than 35 percent of the first year salary. As per CapGeek, if a player’s salary is $10 million in year one of the new contract, it cannot increase or decrease by more than $3.5 million from year to year.
Furthemore, the final year’s compensation can be no lower than 50 percent of the first year’s compensation. In other words, if a player earns $10 million in his first season, he cannot earn less than $5 million in the final season of the contract.
That effectively ends the cap circumvention under the previous CBA whereby teams signed players to ridiculously long, heavily front-loaded contracts in order to achieve a lower average annual cap hit.
The shortened season and late start to the playoffs also affects this year’s NHL Draft and the start of the unrestricted free agent period.
All seven rounds of this year’s NHL Draft, held this year in Newark, New Jersey, will be held on Sunday, June 30th, rather than stretching over two days. The UFA period will begin on July 5, rather than July 1.
Unlike previous years, potential unrestricted free agents may meet and interview with potential new teams starting the day following the entry draft leading up to the day prior to before the start date for the UFA period. For this year, that means from July 1 to July 4, though a pending UFA can receive permission from his current team to speak with other clubs.
The salary cap minimum, or “floor”, for next season remains at $44 million, but teams no longer can use performance bonuses to reach it. For some traditionally low-spending clubs, base salary is now the requirement.
It will be interesting to see how players, agents and general managers adjust to these new rules, and their potential impact upon player movement this summer. The reduced salary cap ceiling remains the biggest factor. As the cap increases with league revenue following next season, the impact upon these new rules have less of an impact.