Penalties and Guidlines for Excessive Length Contracts...

I was reading the post by 'Lindbergh31' regarding the suggestions for "Kovalchuk-Type" Contracts.

I got to the following response from 'DragonGirl0583'

I think it’s going to requires some broader changes that close more than one of the loopholes to be effective, and make sure the newer loopholes the lawyers can find are smaller. For this post I’m just throwing out random ideas, I haven’t sat down and broken down all the implications to them as if I fully support them; I’m merely trying to get discussion going on having a combination of changes rather than trying to close this loophole with just 1.

So let’s say we take this 33% rule as a start, preventing how much the contract can go up and down so the salary isn’t so drastically tapered toward the end. Now maybe add in a change to the LTIR loophole; so for one idea, maybe you only get 1/2 or 2/3rds of the cap room back if a player over a certain age (lets say 40) goes on LTIR for an entire season. Playing with that idea, if this were to hypothetically happen to the Flyers and Pronger goes on LTIR at 41, we only get 2/3rds (3.25M) of the cap space back, and still have 1.3M of it as a penalty against our cap. That would at least deter a GM from counting on that LTIR exemption for the years when a player is over 40, but it would have no effect on a young guy who took a head shot, because he could still come off the cap completely if he goes on LTIR. In Lou’s case with this contract, if Kovalchuck didn’t play those last 4 years, Lou’s got a 2M cap penalty for all those years because he chose to give out this crazy contract. It would make them a little bit more accountable for these long contracts, but still, it’s far from perfect. Last, we would need to change the retirement loophole for a contract like this, since Kovy signed it before 35, knowing that he could retire (or defect to the KHL) and have it disappear completely. So for one possibility, let’s treat contracts longer than 10 years as if they were 35+ contracts (even if the player isn’t 35), and then if the player retires they still count on the team’s cap. All random ideas, but I’m just throwing them out there. My point was just that I think our proposals need to close multiple loopholes in order to actually lessen the problem.

It got me to thinking, AND typing...My response to hers began to look more and more like a post than a response. So, here I am with some more suggestions following along with DG's above referenced ideas. I came up with a series of guidelines the NHL can use when dealing with contracts of this nature...I am no genius, but they seem logical in that they take into account the term, age of the player, and the Average Retirement Age in the NHL. They also would impose a series of 'Penalties' to deter teams from submitting bogus contracts, deter players from finding ways to 'Skip Out' of their contracts, AND deter other teams from trying to bring those players back in under a new contract with a new team...

I am a big boy and can handle criticism, so I want to know what you all think. It is, after all, those kind of 'Round Table' discussions that generally lead to the best solution for all...


If Fezzy were King For A Day:

I am liking DG's ideas alot, they make good sense, which of course is why Bettman, the NHL, & the NHLPA will NEVER go for it, because it makes sense.

If the NHL, the NHLPA, and the Player Agents could see past THIS YEAR's Dollar Signs and look at how these kind of contracts and loopholes are going to become detrimental to the League in years to come then it might have a chance. Other wise it's all moot.

But...your use of the existing 33% and LTIR rules is a great way to start. Changing the rules on contracts in length of 10 years or more is Imperative...Now if a guy signs a 12 year contract at age 20, everyone is going to expect him to be able to play out the length of the deal, by comparison a guy getting a 10 year contract at age 30 is most likely NOT going to be played out...

The NHL and NHLPA need to get together and do a little number crunching. I was thinking of going back to the year of the first expansion, however with the changes in equipment, rules and better training and medical care for players that might be too far. So, they need to go back to say 1980. Looking at every player that has been in the NHL (say minimum of 82 games, enough for one complete season)...get the ages that they all retired. Once the retirement age for every player with at least 82 NHL games is determined for the years 1980-2010, determine the AVERAGE AGE of RETIREMENT (Sure there will be exceptions, freaks of nature like Chelios, Recchi, Gordie Howe, Guy Lafleur)...THEN, they will be able to set up a sensible system for contracts written for extended lengths of time...

I mean if the average age of retirement is 36 years old, then signing a 33 year old player to an 8 year contract would be governed by the new rules. (Such as the contracts for players that are 35+)

Also they need to kill the loopholes, ESPECIALLY because of the European Leagues now available for player 'Escapes'...So say your average age of retirement works out to 36...

A. Player contracts signed at 35 years of age or older carry the full Cap Hit for each year of the contract regardless of whether or not the player retires, goes on IR, or leaves to play in another Professional League (Europe).

B. Player contracts signed from the age of 30-34 years of age whose length will exceed the Average Retirement age of 36 will have a Descending Penalty Scale imposed for those cases where the player does not, or can not complete the terms of said contract.

(Example: Joe Player is 32 years old and signs a 7 year/$36M contract, the contract is front-loaded paying $28M in the first 4 years and $8M over the last 3 years...Joe decides to hang 'em up at 35 years old...he still has 4 years and $15M left on the deal...The team would have a $3.75M penalty/hit in year one(100%), $2.81M year two(75%), $1.875M in year three(50%), and a final hit of $937K(25%) in the final year)...The team would be required to suffer this 'Penalty' for signing a contract that went past the average age of retirement, but they would not be forced to endure the FULL HIT of $15M, only a percentage (about 62%) equaling about $9.372M.

It may seem harsh but it will deter teams from signing contracts that are obviously meant to circumvent the Cap.

Now I do believe that there should be a provision in place to lower the penalty against the team in the event of an injury preventing the player from honoring the term of the contract. Like an insurance policy against the contract, perhaps it could reduce the team's penalty by 35-40% for each of the remaining years...

C. Player contracts signed between the ages of 25-29 years of age which are in excess of 5 years...Penalties would only be applied for those years which exceed the Average Age of Retirement. Penalties imposed would be 75% of those imposed on age 30-34 (Because it is feasible for a 25-27 year old being able to play out a 8-10 years contract (barring injury)).

(Example: Joe Player is 28 years old and signs a 10 year/$45M contract. The contract pays $35M during the first 7 years, and $10M over the final 3 years. Joe retires after the 6th year of the contract. He is currently 34, the Average Retirement Age is 36. No Penalty is imposed for years 7 or 8. He is due $6.67M over years 9 and 10. The team's penalties would be $2.5M in year 9, and $1.25M in year 10...It seems confusing but it's really not. 2 remaining years for $6.67M, instead of the Full Cap Hit (due to his age) it would be only 75% of the $3.335M owed, and instead of 50% Cap Hit (again due to age) it would be 37.5% of the $3.335M owed for the final year).

D. Player contracts signed between the ages of 18-24 years of age. No penalties imposed against team up to the Average Age of Retirement. However, if a player leaves the NHL to play in another Professional League (such as the KHL), player penalties may apply. The player may NOT return to NHL (except to the team they are under contract with) for a period no less than the remaining term of said contract PLUS 20%. A player returning to the team with which the contact was signed will be required to honor the FULL REMAINING TERM of said contract.

(Example: Joe Player is 22 years old and signs a 7 year/$21M deal with the Avalanche. After 2 years, he decides the grass is greener in the KHL, he bolts. He may not return to the NHL with any other team for a period of 6 years (5 remaining years + 20%). He may return to the Avalanche at any time, but will be required to play out the remaining 5 years of the contract for the balance of $15M still unpaid. (The ONLY exception to this ruling would be if Colorado chose to resign the player to an updated deal upon his return, or if they trade him to another team.) If the another team wanted to sign said player and have him return to the NHL, Colorado would receive draft pick compensation (such as with an RFA, but steeper as this is a little different situation), also the player's new team would be required to pay the Avalanche a 'Penalty Tax' equal to 10% of the original contract value (in this case $2.1M)). This may sound steep, BUT it is meant to deter both Players AND Teams from what I guess you would call 'Tampering', after all what good is a contract if the player can skip town after only a portion of the contract, lay low for a year or two, then come back and sign with another team. I will tell you...WORTHLESS! In this example, say the Oilers wanted Joe Player, and he wanted to come back and play for them. The Oilers would pay the Avalanche $2.1M in cash, and would be required to forfeit draft pick compensation the same as if they had signed Joe Player as an RFA to a 5 Year/$20.25M contract (a 35% penalty imposed on the value of the contract due to the nature of the situation NOT being a standard offer sheet for an RFA).

I am no lawyer, I am no genius, but it seems that if some VERY simply written, but hard to circumvent Rules were in place. And the Penalties imposed were steep enough, teams AND players would mostly adhere to them...IMHO...


If only I were King for a Day...

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