Daly: Pronger contract an 'over-35' deal
by Travis Hughes on Jul 8, 2009 10:59 AM EDT
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There was a lot of debate about this yesterday -- is Chris Pronger's contract extension considered an "over-35" contract or not? If it is, his $5 million cap hit will stay on the books for the next seven years, regardless of whether or not he retires. If it is not an over-35 deal, his cap hit will come off the books if he retires before the contract ends.
Bill Daly, the deputy commissioner of the league, was contacted by Elliotte Friedman, a reporter for Hockey Night in Canada and FAN 590 in Toronto. Daly told Friedman that the deal is in fact an over-35 contract because of the date it goes into effect. It does not matter that the deal was signed before Pronger is 35 years old (he's 34 until October 10 of this year), because it does not go into place until the 2010-11 season.
The league's collective bargaining agreement uses June 30 as the cut off date, and Pronger will be 35 on June 30, 2010.
All indications from Pronger point to him not playing until the end of his contract, considering he will be 42 at its conclusion and he said at his press conference on Monday that he has no intention of playing "as long as Chris Chelios." If he doesn't play out the remainder of his contract, his cap hit could seriously handcuff the Flyers in later seasons.
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On csnphilly the assistant GM said that Chris said he thinks he will be able to play the whole 7 years
fightlockdown.com
by The Legend on Jul 8, 2009 11:24 AM EDT reply actions 0 recs
its important to note that chelios is also 47 yrs old. Pronger doesnt have to play as long as Chelios because his contract will end at 42. I think he’ll play out the rest of his contract
by CoburnsCuddleBuddy on Jul 8, 2009 11:54 AM EDT reply actions 0 recs
the damning follow-up from darren dreger’s blog:
The Flyers disagree and interpret the CBA language governing the “over 35” clause differently.
Sources say the Flyers’ lawyers are now aware of the league’s stance and are debating this issue.
can we expect the flyers to challenge the league on the CBA’s interpretation? if so, will the flyers use some of the same logic as mc79hockey in this blog post?
by Natty Bumppo on Jul 8, 2009 12:00 PM EDT reply actions 0 recs
This looks like its going to arbitration.
But there’s always LTIR.
And, whatever the case, the assistant GM has to say they expect Chris to play the entire seven years. There’s an entire section of the CBA which talks about cap circumvention, which this would clearly be.
by MarioD on Jul 8, 2009 12:06 PM EDT reply actions 0 recs
Buyout
What about a buyout? What are the rules for buying out a 35 year old plus contract. Then can buy him out after 5 years for $750,000.
by chrislanci on Jul 8, 2009 12:10 PM EDT reply actions 0 recs
If you buy out a player, what matters is the remaining amount of money on the contract. When you buy them out, half of the remaining money will still count toward the cap. So if there’s 2 years left at 2 million total, they’ll be paying 1 million over those 2 years, so 500k would still count toward the cap.
I think…
by SJPhillyVT on Jul 8, 2009 12:29 PM EDT up reply actions 0 recs
i think this is incorrect in reference to 35+ players.
the league FAQ re: the CBA even underlines the “not” in the following:
The remainder of this explanation applies to buyouts that took place after July 29, 2005, and assumes the player was not 35 or older when signing his SPC (in which case a buyout does not reduce the cap hit).
so assuming bill daly is correct and pronger’s deal counts as a 35+ contract (which holmgren says he is not challenging), a buyout doesn’t save the team in terms of cap hit.
by Natty Bumppo on Jul 8, 2009 6:35 PM EDT up reply actions 0 recs
Similar situation
Reference the contract that Tim Thomas signed with Boston this spring, which was nearly identical: the Bruins rushed to get him to sign before his 35th, only to be informed that the contract doesn’t start on his birth date but at the beginning of next season. Therefore they’ll carry an inflexible $5m hit for the next 4 years, not the easy buyout that they were apparently expecting after a couple years.
One would think that NHL management would be on top of these situations, rather than finding out via the press.
by bostonblueline.blogspot.com on Jul 8, 2009 12:20 PM EDT reply actions 0 recs
Actually, management called their legal team for the answer, not the press.
The press asked Bill Daly.
by MarioD on Jul 8, 2009 12:32 PM EDT up reply actions 0 recs
so why didn’t management call bill daly?
by Natty Bumppo on Jul 8, 2009 12:33 PM EDT up reply actions 0 recs
Because that’s not how any business operates?
You ask the legal team. The legal team gets you an answer.
by MarioD on Jul 8, 2009 12:51 PM EDT up reply actions 0 recs
if that answer suits you, then so be it. i’m a caps fan, but i wouldn’t be able to live with that explanation if i were a flyers fan.
if the legal team needs verification, i’m positive the commissioner’s office is available for a phone call.
by Natty Bumppo on Jul 8, 2009 1:04 PM EDT up reply actions 0 recs
Shocking! Washington fans continue to be obsessed with the Flyers.
I’m an attorney and I understand how business works. Which you clearly don’t.
You don’t call the commissioner of the league to review every contract you write up. It’s not his job and it’s not appropriate.
Not that any of this matters because they’ll just LTIR him anyway in four years.
by MarioD on Jul 8, 2009 1:17 PM EDT up reply actions 0 recs
You’re not going to call up Bettman, but I’m sure there are people at the NHL offices that could answer this question. You don’t have to do it for the vast majority of contracts, but this was an obvious exception where clarification would’ve helped.
It’s a dumb move and it’s going to come back and bite them in the ass.
by RCheli on Jul 8, 2009 1:58 PM EDT up reply actions 0 recs
I'm sure there are as well
But it is the legal team’s responsibility to contact those people if it’s appropriate. That is part of their job. Not management’s.
disclaimer: I’m not a lawyer. I just work for a firm that employs a few hundred of them.
"When you make your final stand
I'll be right there
I'll never leave
And all I ask of you is
Believe"
by The Dark on Jul 8, 2009 2:41 PM EDT up reply actions 0 recs
Exactly. It’s not Paul Holmgren’s job to understand the CBA. It’s his job to ask the lawyers.
And the lawyers and Daly disagree on the plain meaning of the CBA. Most likely, then, this will go to arbitration.
Bill Daly does not get to unilaterally interpret the CBA. Just because he says it means “X” does not make it so.
by MarioD on Jul 8, 2009 2:45 PM EDT up reply actions 0 recs
Pssst….you probably don’t want to brag about being an attorney while hanging out on a blog during the middle of the workday. Makes you come off looking like part of the crack Flyers legal team you refer to.
/Another Obsessed Caps Fan
by Cluster on Jul 8, 2009 4:10 PM EDT up reply actions 0 recs
Not entirely sure that's an insult
Obviously this isn’t the first contract to happen, and if he WERE a part of the “crack Flyers legal team,” a few things would be implied:
A) Hefty f’n salary
B) Complimentary season tickets
C) Potential to become something like NHLPA president or commissioner (that path has been followed several times)
D) Other miscellanea.
So, I dunno, if it were me, I’d thank you for the backhanded insult (so to speak)
by Alon on Jul 9, 2009 1:47 AM EDT up reply actions 0 recs
You’re gonna have to simplify your response. He’s obviously mentally challenged if he thinks lawyers don’t have time at work to look at the internet…
Or get lunch breaks.
Or take vacations.
by MarioD on Jul 9, 2009 2:25 PM EDT up reply actions 0 recs
Law Firm
I used to work at one (in the Marketing department, not as an attorney). If memory serves, summer is a slower time. If MarioD were commenting on blogs in, say, late December, then there might be an issue.
This is assuming that MarioD is at a large law firm.
Just out of curiosity Mario, are you a Business & Finance guy or do you specialize in something else?
Do you see what happens when you find a stranger in the Alps?
by mikefive on Jul 9, 2009 2:30 PM EDT up reply actions 0 recs
Small firm. Litigation. (Civil, criminal, disability, etc.)
If I’m not in court, I’m staring at a computer screen all day and very capable of hitting Alt+Tab.
by MarioD on Jul 9, 2009 3:36 PM EDT up reply actions 0 recs
This is a terrible deal for the Flyers. Either they felt that they could absorb the large cap hit of a 42-year-old defenseman (which is a bad, bad move) or they were unaware of how the 35+ contracts work (which is even worse).
Foolish moves by the Blackhawks’ GM cost them millions and millions of dollars this past week, and the Flyers have done something equally as foolish.
Is Pronger going to be an All-Star-level defenseman for the next few seasons? Of course. He’ll make the team much better, much more physical on the blue line (which they need), but with the salary cap not rising (and possibly shrinking) in the years to come, this is going to come back and bite them in the ass in ‘12-’13, ‘13-’14, ‘14-’15, etc.
by RCheli on Jul 8, 2009 12:56 PM EDT reply actions 0 recs
ken campbell at the hockey news made the call to paul holmgren’s office. his report here.
important excerpts:
“I don’t believe that and I don’t know who’s creating that notion out there,” Flyers GM Paul Holmgren told TheHockeyNews.com. “We signed Chris Pronger to a seven-year contract. As with any long-term contract, there are ramifications that come along with it, both negative and positive and we’re prepared to deal with those ramifications.”
“The league has sent out memo after memo after memo alerting teams about this,” said one former NHL executive. “If this is what they’re doing, they’re trying to drive a 747 through a loophole.”
The league has yet to hear from the Flyers about this and considers it to be unambiguous. And given that Holmgren has said the Flyers are willing to live with the negative ramifications of signing Pronger to a seven-year deal, it might not be an issue.
Then that just makes it a really bad contract.
contrast that to MarioD, Esq., from yesterday:
Its not a 35+ contract.
To put it in the most simple terms: The Flyers wouldn’t have reached this agreement if it wasn’t coming off the books in four years.
and then again:
Im an attorney.
The parenthetical is modifying the definition of "age 35 or older".
Again: The Flyers don’t sign this deal if it counts as a 35+ contract.
by Natty Bumppo on Jul 8, 2009 5:12 PM EDT reply actions 0 recs
Jackass:
1) Holmgren will get fined for tampering if he admits they are taking the contract off the books in 4 years.
2) There are three different ways (retirement, LTIR, buyout) to take this contract off the books in four years. Even if one of those options isn’t available, the contract wouldn’t be structured with $500k the last two seasons if any party to it intended for Pronger to play those seasons.
3) Before responding, read point 1 again.
by MarioD on Jul 8, 2009 5:25 PM EDT up reply actions 0 recs
Excuse me, fined for circumvention, not tampering. Maple Leafs on my mind I guess.
by MarioD on Jul 8, 2009 5:26 PM EDT up reply actions 0 recs
1) Holmgren will get fined fortamperingcircumvention if he admits they are taking the contract off the books in 4 years.
if your assumption is that holmgren is tactfully lying or leaving out the real story, it seems just as likely that holmgren’s team (to include his lawyers) royally screwed the pooch, misinterpreted the CBA (hence dreger’s source), and are now trying to save public relations face by changing their tune.
by Natty Bumppo on Jul 8, 2009 6:01 PM EDT up reply actions 0 recs
The “real story” is plainly obvious to everyone who reads the salary figures of the contract.
by MarioD on Jul 8, 2009 6:37 PM EDT up reply actions 0 recs
awesome. i’m glad for you that you are at peace with this deal. pronger vs. ovechkin is going to be great to watch for the next 5 (or 6 or 7 or 8) years.
by Natty Bumppo on Jul 8, 2009 6:44 PM EDT up reply actions 0 recs
again…good luck with all that. i guess i’ll check back in four years.
by Natty Bumppo on Jul 8, 2009 5:30 PM EDT up reply actions 0 recs
Oh, and by the way: you can send out memo after memo after memo saying that the sky is green. It doesn’t make it so.
There is an obvious ambiguity to the qualifications of a 35+ contract. The NHL can interpret however they want, but the any team in the league can challenge it and an arbitrator could rule the NHL was misinterpreting it in all those memos.
by MarioD on Jul 8, 2009 5:54 PM EDT up reply actions 0 recs
of course that’s right. which was my original comment. but it appears from campbell’s story the flyers have re-evaluated their case and decided not to challenge the league office.
by Natty Bumppo on Jul 8, 2009 6:03 PM EDT up reply actions 0 recs
What is there to challenge? Pronger hasn’t retired so there’s no issue of contention.
by MarioD on Jul 8, 2009 6:35 PM EDT up reply actions 0 recs
Let's discuss calmly, please...
MarioD, didn’t you just tell the rest of us to chill out yesterday? You seem to be among those still hot headed… please calm down yourself, we don’t need to argue in a nasty way, I think most of us are capable of a civil debate.
Look, as I pointed out with examples in yesterday’s post, there’s league precedent that this has happened before. Now we have confirmation that it is the case. If the Flyers didn’t pay attention to the the decision made on the Tim Thomas contract just 3 months ago, that responsibility does not rest on us fans.
Bill Daly does not get to unilaterally interpret the CBA. Just because he says it means "X" does not make it so.
Since he helped negotiate it, I would wager he has a pretty decent understanding of the CBA, so I have to disagree with you on that one.
I believe there is league precedent as well that you have to pay 100% of the cap hit on a player with a 35+ contract, even if they aren’t playing, including retirement. Here’s the CBA excerpt from the section on calculating “Average Club Salary” (aka the cap):
[50.5.(d).(i).B.(5)] All Player Salary and Bonuses earned in a League Year by a Player who is in the second or later year of a multi-year SPC which was signed when the Player was age 35 or older (as of June 30 prior to the League Year in which the SPC is to be effective), but which Player is not on the Club’s Active Roster, Injured Reserve, Injured Non Roster or Non Roster, and regardless of whether, or where, the Player is playing, except to the extent the Player is playing under his SPC in the minor leagues, in which case only the Player Salary and Bonuses in excess of $100,000 shall count towards the calculation of Averaged Club Salary;
It doesn’t say anything about part of the Player Salary, it’s the whole player salary. Do I need to go do more research and prove this one with examples, too? I will if you guys need me to.
So the LTIR is the only real option for not taking the cap hit. And I think at some point the Flyers will get caught if they keep exploiting it. Who knows if the new CBA will even let them exploit it after 2011.
by DragonGirl0583 on Jul 8, 2009 6:15 PM EDT reply actions 3 recs
from all that i’ve read, i think your analysis is correct that the LTIR is the one real option…unless by chance the flyers can convince another team near the salary cap basement to assume the retired pronger’s cap hit in exchange for prospects or draft picks.
by Natty Bumppo on Jul 8, 2009 6:48 PM EDT up reply actions 0 recs
also, am i right that official NHL doctors (and not team doctors) will determine whether 40-year-old pronger qualifies for LTIR? i realize the flyers have experience with this, but it seems like a dangerous game to play.
by Natty Bumppo on Jul 8, 2009 7:35 PM EDT up reply actions 0 recs
You can negotiate a contract and find out later that what you intended it to mean isn’t what it says.
by MarioD on Jul 8, 2009 6:34 PM EDT reply actions 0 recs
If the vast majority of the money is front loaded anyway, is this really going to be a big deal? Am I right to say that if he plays at least 4 years of the deal that there won’t be that much “dead money” anyway?
Plus, who knows how much the cap will have gone up or changed 7 years from now? This may end up as much ado about nothing.
by JasonB on Jul 8, 2009 9:51 PM EDT via mobile reply actions 0 recs
The cap hit, I think
would be $5m a year for every year of the contract, retired or not. The best method would be to turn Pronger LTIR (so that his cap hit effectively does not count, a la Rathje), which (as has been mentioned) is risky in that the NHL may try to shut that loophole with a powerful coercive incentive (i.e. punishment in the form of $$, picks, etc), and we don’t really want the Flyers to be the team to be made an example of.
In all likelihood, this will hurt the team in the latter portions of the contract, either via legal issues or actual salary albatross or having to trod out a husk of a player. Those’re worst case scenarios. Best case would be whatever the scenario in which Pronger is not a bad investment of $5m for the Flyers’ cap — maybe he plays well, or we trade him, or LTIR and no ramifications, we happen to not have any key players in need of a new contract while we are against the cap in those years, etc. It’s possible it won’t mean much, but it’s conclusive that it will mean something.
by Alon on Jul 9, 2009 1:54 AM EDT up reply actions 0 recs
LTIR
I hope Pronger is still busting chops and receiving the Cup every other year from Mike Richard’s hands the end of the contract. ;-)
by Fr. Orange and Black on Jul 8, 2009 10:09 PM EDT reply actions 0 recs
yeah – who cares about the loose dough at the end of the contract, no sense crying over pre-lactated milk… we have our big man in front for 7 years, thats all that matters
by fitzy first on Jul 9, 2009 2:04 PM EDT up reply actions 0 recs
fyi, mirtle blogged about this today.
by Natty Bumppo on Jul 9, 2009 3:34 PM EDT reply actions 0 recs
The NHL
I really don’t like the way that the NHL does business. At all.
The very fact that we are having this conversation should be a red flag. Why would a contract be written in such a way that SEVERAL teams misinterpret it? Why would the NHL create loopholes, and then arbitrarily close them? Why would the NHL create a fairly reasonable salary cap, and then constantly threaten to lower it? That will screw everyone except the Islanders.
Why can the NHL not take a hint when its commissioner is booed at every single event where he is present, regardless of the location of said event?
Do you see what happens when you find a stranger in the Alps?
by mikefive on Jul 9, 2009 7:23 PM EDT reply actions 0 recs
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