CBA Question: What is the cap hit for a player who retires after receiving July 1 signing bonus?

[rojac]

This is a theoretical question but I am using John Tavares as an example simply because his contract matches the needs of my scenario. I am not implying that John Tavares is going to retire nor am I suggesting that he should retire. I was just curious about a theoretical contract situation and think better using specifics.

For the 2024-25 season, John Tavares will receive a signing bonus of $7,040,000 on July 1st and a regular salary of $910,000. His cap hit will be $11,000,000.
Now, suppose John decides to retire.

If he were to retire tomorrow (June 30), he gets no signing bonus and no salary and his cap hit is $0, That's pretty straightforward. But what if he decides to wait?

On Monday (July 1), he receives his signing bonus. Then, on Tuesday (July 2), he retires. It's clear he receives no salary but what would his cap hit be? Would it be $0? Would it be $11,000,000. Something else?

Again, this is a theoretical discussion about cap hits for players who retire after receiving their signing bonus. It is not a discussion about whether or not Tavares should or will retire.

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[Voight]

I think if he retired that soon after getting the bonus, the Leafs would request he return some if not all of it to them.

There's been players in other sports that retired after receiving signing bonuses and they've had to give some of it back.

Calvin Johnson retired while still having term left on his contract with the Detroit Lions and they made him pay $1.6 million back.

NFL teams are legally allowed to recoup the prorated portion of a retiring players' signing bonus, which for Johnson could have amounted to as much as $3.2 million.

 

[StreetHawk]

An NHL season begins on July 1 to June 30. So, logically, if you get a SB, it is meant to be an early payment for your performance for the upcoming season. if you get your SB in July, but the season does not begin until October, and you opt to return in the summer, then the player has not rendered any services for that play.

So, fully expect the team to come back and get that money, otherwise, it stands to reason that the team would get charged a cap hit for that SB that they allow the player to keep.

 

[Beukeboom Fan]

I think if he retired that soon after getting the bonus, the Leafs would request he return some if not all of it to them.

There's been players in other sports that retired after receiving signing bonuses and they've had to give some of it back.

Calvin Johnson retired while still having term left on his contract with the Detroit Lions and they made him pay $1.6 million back.

The NFL had a linebacker retire after his 1st season and they made him return a pro-rated portion of this contract bonus. Forgot his name, but thought was really cold hearted.

 

[Voight]

The NFL had a linebacker retire after his 1st season and they made him return a pro-rated portion of this contract bonus. Forgot his name, but thought was really cold hearted.

Chris Borland

 

[mouser]

Many NFL players, including hall of farmers, have been forced to return signing bonuses after retiring with active contracts.

The NHL has never had an identical case to my knowledge. Nor made an official statement on whether signing bonuses would have to be returned. My expectation is they would follow the lead of the NFL and require signing bonuses be returned, regardless of whether the individual teams want a bonus to be clawed back.

The closest example we have is Shipachyov, who officially retired from the NHL and was forced to repay a large (unpublished) portion of his signing bonus. It’s not clear whether this repayment was enforced by the NHL itself or Vegas.

 

[StreetHawk]

Many NFL players, including hall of farmers, have been forced to return signing bonuses after retiring with active contracts.

The NHL has never had an identical case to my knowledge. Nor made an official statement on whether signing bonuses would have to be returned. My expectation is they would follow the lead of the NFL and require signing bonuses be returned, regardless of whether the individual teams want a bonus to be clawed back.

The closest example we have is Shipachyov, who officially retired from the NHL and was forced to repay a large (unpublished) portion of his signing bonus. It’s not clear whether this repayment was enforced by the NHL itself or Vegas.

Logically, if the notion now in the NHL is that all cash paid to the player will have to hit the salary cap, then it should depend on whether there is a difference between total cash paid to the player vs the cap charges taken. In the event the player was backloaded on their contract, team might have taken say 3 years of $5 mill cap charge but paid out only $13 mill, thus a $2 mill SB would then make everything even. Team would basically forfeit the opportunity to obtain a cap credit I would imagine. But, if it was reversed and if a $2 mill SB put the player at say $17 mill cash and $15 mill in cap costs, then there logically should be a cap charge to the team.