Value of: Recapture penalty

[Eric Sachs]

Eric Sachs is clearly right here.

There's 1 part about the rule I don't get though. If Weber plays out the entire contract then nobody gets tacked with any recapture penalty because he played the entire thing out, what Nashville gained at the beginning was made up for by the extra cap compared to salary Montreal made back at the end.

But if he retires a year or more early then Nashville has to make all of their back up and in that situation as far as Nashville is concerned it doesn't matter what Montreal made back up. They have to make up all that they gained.

So what I don't really get it, it's like double standards, hey if he plays out the entire contract then Montreal made it up, even though you benefited by 24.5 million no harm no foul. But instead if he retires a year early, hey you benefitted by 24.5 million, Montreal made it all up except the 6,857,143 benefit from the last year, but now it doesn't matter what Montreal made up you owe all of the 24.5 million and change in penalty.

I just feel like if he plays out the entire contract and they're on the hook for nothing because it was played to it's conclusion and all made up then what was made up should come into play into figuring out the penalty when part of it is made back up by another team post trade.

I feel like it should be, once he retires you determine how much was gained by everyone combined. So if Nashville gained 24.5 million but Montreal makes 14 of it back up, then 10.5 was gained throughout the life of the contract, and then the teams are responsible for a portion of that each depending on how much they gained. In this case Nashville would be on the hook for all of it because they gained and Montreal didn't, but if he played for 4 more years and then retired then Montreal gained as well and they both would be responsible for what they gained.

So basically team A gains x, then the player is traded and team B gains y then the player retired both are on the hook for what they gained. But if team A gains x and then post trade team B make up y back. Then team B is on the hook for nothing obviously, but team X is only on the book for x-y, the traded the player to another team, the contract changed hands and the other team made it up for them, that's part of the transaction.

I agree this would make more sense in most ways. The whole rule is fairly weird as it only applies to a distinct number of contracts that pretty much could have been named directly in the CBA. No future contract under this CBA can qualify for cap recapture.. there's legitimately just the handful of qualifying deals already out there and that's it.

So the league probably didn't care too much about the intricacies of the rule. Cap recapture may not even exist in future CBAs once the remaining deals that qualify run their course... it will be a dead rule.

My favorite part of the deal is how Snyder somehow got his buddies to completely excuse the Flyers of the consequences of the Richards and Carter deals for no good reason. Every single qualifying contract was signed under rules that did not include cap recapture.. why exactly does it matter if the player was traded or not? Every team can argue that they did not know of the repercussions at the time. The point of the rule is to make sure cap hit = salary.. but for everyone but Philadelphia? I guess the defense would be that Philly was in a position where they couldn't cut into the cap benefit having already traded the players.. but kinda funny that there is a rule in the CBA that could basically be called the Philadelphia exception.

What you brought up is made even more complex if you think that a negative cap recapture penalty would give extra cap room. I'm not sure this has been confirmed.. and the CBA doesn't explicitly say anything either way. Then you have the scenario with Weber where Montreal can push him to retire with 1 year left on his deal (demoting to the AHL, etc.). They would get an additional 17M in cap space for the following year.. while Nashville would get a 24M cap penalty. Seems pretty ****ing odd that one team can not only directly hurt another team's cap space but also have a damn good incentive to do so.

Never assume that your idea of "fun" is the same as every other posters' idea of "fun".

I had a lot of fun in this thread. I learned that blogs and reddit are legitimate sources because they are internet links, math be damned. I also even got to break out excel. We should put that chart somewhere for safe-keeping for future conversations.. does anyone have a blog? if not, I can post on reddit..

 

[Mypetrobot]

If t ever gets to this I believe Weber would LTIR for some nagging injury and the nhl would look the other way.

Most likely some kind of back or concussion injury.

 

[Canada4Gold]

What you brought up is made even more complex if you think that a negative cap recapture penalty would give extra cap room. I'm not sure this has been confirmed.. and the CBA doesn't explicitly say anything either way. Then you have the scenario with Weber where Montreal can push him to retire with 1 year left on his deal (demoting to the AHL, etc.). They would get an additional 17M in cap space for the following year.. while Nashville would get a 24M cap penalty. Seems pretty ****ing odd that one team can not only directly hurt another team's cap space but also have a damn good incentive to do so.

I wasn't suggesting negative cap recapture.

As it is now say if Weber retires before the final year. Nashville gained 24.5, Montreal makes up around 18 million of it. Nashville is on the hook for 24.5, Montreal is square. What I'm suggesting is Montreal is still square, they don't owe or get anything. They didn't gain anything(it was Nashville who gained), and you can't in your right mind give a negative penalty especially not a big one(though that's possible with buyouts, see Cowen).

I'm suggesting the 18 million Montreal makes up comes off Nashville's penalty. Over the course of the contract there was only 6.5 gained, so that's what Nashville should owe in penalty. They traded the contract in a hockey transaction and Montreal willingly took on the contract that makes up the benefit gain towards the end.

If both teams gain then they both pay, but if 1 team gains then the other makes it up for them, the 2nd team is square and what they gained back comes off the penalty of the first. It's only the outstanding portion of the contract gained when the retirement happens that the teams are on the hook for, on in this case Nashville is on the hook for since they were the only one to benefit.

The only way you get into weird territory is if the player gets traded twice, 2 teams gain, and then the third makes some of it back, then you'd have to get into which fractional part from each team did they make back, and you'd do that based on a percentage that each team owed.

I know it's never going to be this way I suggested given they're not going to go back and change the CBA and the contracts will mostly be done by the time the next CBA rolls around(Weber's won't so it could happen). Just saying this is the way I think it should be.

 

[Riptide]

No.We have two links.Each stating different things.Do i know which one is correct?No and i'm pretty sure you don't either.
Who's to say which one is right.

Then perhaps you should listen to those that do know what they're talking about. There's some extremely knowledgable people on these forums - ones who actually know how the recapture rules work and have the ability to do the math. That makes a lot more sense then listening to some random blogger who clearly has the math wrong.

 

[Riptide]

So what I don't really get it, it's like double standards, hey if he plays out the entire contract then Montreal made it up, even though you benefited by 24.5 million no harm no foul. But instead if he retires a year early, hey you benefitted by 24.5 million, Montreal made it all up except the 6,857,143 benefit from the last year, but now it doesn't matter what Montreal made up you owe all of the 24.5 million and change in penalty.

The idea is that NSH paid Weber like the star he was (14m a season), while he had a very favorable cap hit. If he retires early, then NSH benefited from that contract, and thus they're going to get penalized for it. In this case, it just sucks for NSH, because they didn't sign him to this contract - PHI did in an attempt to get NSH to walk away from Weber. Sure they matched it, but it's not like they had any choice.

I feel like it should be, once he retires you determine how much was gained by everyone combined. So if Nashville gained 24.5 million but Montreal makes 14 of it back up, then 10.5 was gained throughout the life of the contract, and then the teams are responsible for a portion of that each depending on how much they gained. In this case Nashville would be on the hook for all of it because they gained and Montreal didn't, but if he played for 4 more years and then retired then Montreal gained as well and they both would be responsible for what they gained.

I think the idea is the NHL doesn't want a team with a contract like this (Hossa's is the same) to benefit heavily from the player in their prime years while paying them a huge salary with a low cap hit, then jetson the contract without a care in the world if the player doesn't finish it. I mean what happens to CHI if they trade Hossa because he's not performing like a 5m+ player when he's 38? Depending on where they trade him, he could say **** it, and retire. I mean he's made 70m+ and won 3+ cups... why would he want to play in the minors or on some crappy team for 1m? You want to avoid this? Do not heavily fluctuate a contract. Again, there's many reasons why it makes sense to do so. And in this case (Weber) it wasn't even NSH who negotiated the contract, so it really sucks for them. But then this was something that they were well aware of when they traded Weber - and thus while they couldn't force his hand before - at least they might have been able to do something to negate things. Now they're completely removed from the process.

 

[me2]

This isn't how it works. They wouldn't have 8, 12 and then 24 penalties in consecutive years. Nashville gained 24.5 and change difference between Weber's salary and cap hit during the part of his contract in Nashville, so if he retires early Nashville has to make that up.

So if he retires when you say, 3 years early, it would be 8 million and change for 3 years each, if he retires 2 years early it's 12 million and change for 2 years each, and if he retires with just 1 year left that's where the 24.5 million and change penalty comes into play for 1 season.

And Nashville reacquiring Weber's contract at that time wouldn't chance anything. If he plans on retiring and they can't talk him out of it they pay that penalty regardless if they reacquire him before he retires or not. The only way they avoid the penalty is if they get him back in the next couple years so they they start making up that 24.5 million difference when his salary drops and is lower than his cap hit. Or if Weber plays out his entire contract.

http://www.stanleycupofchowder.com/...Weber-Nashville-Predators--Flyers-Offer-Sheet

The sooner they fix that rule the better. No team should have pay more in recapture than is unaccounted for by the salary cap. With one year to unaccounted for Weber's from loaded salary is just $6.85m. I don't understand how a team can fairly be hit with $24.5m penalty when only just $6.85m cap is outstanding. It's a triple facepalm worthy failure. It makes you wonder if they just forgot players get traded and worked of one team only.

 

[Canada4Gold]

The idea is that NSH paid Weber like the star he was (14m a season), while he had a very favorable cap hit. If he retires early, then NSH benefited from that contract, and thus they're going to get penalized for it. In this case, it just sucks for NSH, because they didn't sign him to this contract - PHI did in an attempt to get NSH to walk away from Weber. Sure they matched it, but it's not like they had any choice.



I think the idea is the NHL doesn't want a team with a contract like this (Hossa's is the same) to benefit heavily from the player in their prime years while paying them a huge salary with a low cap hit, then jetson the contract without a care in the world if the player doesn't finish it. I mean what happens to CHI if they trade Hossa because he's not performing like a 5m+ player when he's 38? Depending on where they trade him, he could say **** it, and retire. I mean he's made 70m+ and won 3+ cups... why would he want to play in the minors or on some crappy team for 1m? You want to avoid this? Do not heavily fluctuate a contract. Again, there's many reasons why it makes sense to do so. And in this case (Weber) it wasn't even NSH who negotiated the contract, so it really sucks for them. But then this was something that they were well aware of when they traded Weber - and thus while they couldn't force his hand before - at least they might have been able to do something to negate things. Now they're completely removed from the process.

I get the point of the rule, I just think that if most of the benefit is made up while he's on Montreal and he retires with 1 year left than over the course of the contract only 6.85 was gained, or if he retires with 2 years left then only 13.7 was gained. That's what Nashville should have to owe.

It's just weird because if he plays the contract to conclusion the NHL is just fine with saying yeah Montreal made it all up and Nashville owes nothing. But if Montreal makes it all up but that last year then the NHL is telling Nashville no you have to make it all up again.

Like why are you ok with saying yeah it was all made up by Montreal but not ok with saying yeah it was all made up by Montreal except this last outstanding 6.85 million so that's what you owe.

That's what doesn't make sense to me. I think Nashville should get credit for the amount Montreal makes up pre-retirement and then they're on the hook for whatever's left over. While Montreal is on the hook for nothing assuming he retires late enough they didn't get any benefit. Montreal took on the contract willingly knowing they would be paying out 6, 3, and 1 million dollar salaries on the end of that contract while having a 7+ million cap hit, making up for the benefit Nashville had earlier. It is being made it by someone. It's just strange if they make it all up then the NHL is happy and Nashville owes nothing, but if they make 90% of it up nope, Nashville you got to make all your gains up again in the final year.

 

[me2]

I get the point of the rule, I just think that if most of the benefit is made up while he's on Montreal and he retires with 1 year left than over the course of the contract only 6.85 was gained, or if he retires with 2 years left then only 13.7 was gained. That's what Nashville should have to owe.

It's just weird because if he plays the contract to conclusion the NHL is just fine with saying yeah Montreal made it all up and Nashville owes nothing. But if Montreal makes it all up but that last year then the NHL is telling Nashville no you have to make it all up again.

Like why are you ok with saying yeah it was all made up by Montreal but not ok with saying yeah it was all made up by Montreal except this last outstanding 6.85 million so that's what you owe.

That's what doesn't make sense to me. I think Nashville should get credit for the amount Montreal makes up pre-retirement and then they're on the hook for whatever's left over. While Montreal is on the hook for nothing assuming he retires late enough they didn't get any benefit.

It's ridiculous. The purpose should have been to recapture missing salary cap hit (gap between salary paid and salary cap hit). This isn't recapture it is recapture (6.85m) plus a $18m addition salary cap hit.

Weber's total salary cap hit would be $126.5m on $109m paid salary.

 

[Dazed and Confused]

You've got to think Weber know how much he'd screw over Nashville if he retired.

Much more likely he'll just take some "personal time" at the end, and Montreal will suspend him indefinitely or LTIR him if there's an "injury" and that'll be the last we'll hear on the matter, at least until the contract ends and he officially hangs them up.

 

[Off Sides]

If they decide to modify this in the next CBA who is going to resist?

Seems like both the NHLPA and the NHL would want to change it. NHLPA it's more cap space and money that can be used on players. Escrow issues aside which they always seem to be put aside given the escalator that is always used.

NHL, are they going to want to punish Nashville, Minnesota, Chicago and the few other teams that could be effected coming out of whatever happens with the next CBA at that point?

I'd think they allow the cap penalty to be spread out over many more years. I can't see them asking a team to spend like ~1/4 - 1/5 of their cap space on recapture at that point, it's just not going to make sense to any party.

 

[Curufinwe]

My favorite part of the deal is how Snyder somehow got his buddies to completely excuse the Flyers of the consequences of the Richards and Carter deals for no good reason. Every single qualifying contract was signed under rules that did not include cap recapture.. why exactly does it matter if the player was traded or not?

Because the Flyers got no cap advantage from those deals.

It's not complicated.

 

[Curufinwe]

I really don't think nashville will be punished for matching a contract another team (Philly) made to bully them out of matching while keeping the cap hit low.

Jersey got its draft pick back nashville won't be punished for having to match a contract another team made to circumvent the cap. (Especially before it was a rule) if anyone should be punished it should be Philly for making the contract. Other teams that signed players to cap circumventing contracts themselves sure. But nashville had to match or lose weber without knowing this rule would be put in place

. Ps I'm an oilers fan and am not a fan of any of the teams involved.

Another ludicrous post where the Flyers are supposed to be punished for doing something that they received no advantage from.

 

[Seanaconda]

Another ludicrous post where the Flyers are supposed to be punished for doing something that they received no advantage from.

I just don't think nashville should be punished for a contract they didn't write. When the point of the rule was to punish teams that tried to circumvent the cap and the flyers wrote that contract not nashville.

 

[Riptide]

I just don't think nashville should be punished for a contract they didn't write. When the point of the rule was to punish teams that tried to circumvent the cap and the flyers wrote that contract not nashville.

I think it's ****** for them, seeing how they didn't write it. But they signed the contract to keep Weber. If they really wanted to, they could have walked and they would have received 4x1st picks to do so.

 

[Off Sides]

I am a little confused by the intent of the rule?

Wasn't the idea to equal out the advantage a team received by having the cheap years at the end of the deal? They got a break on the cap hit yet paid him front loaded to the extreme?

Why would the punishment be more than the advantage they received? Over 4 years they paid him 56M, yet his total cap hit was only ~39M, isn't that only a ~16M advantage they received over those 4 year?

 

[Street Hawk]

I am a little confused by the intent of the rule?

Wasn't the idea to equal out the advantage a team received by having the cheap years at the end of the deal? They got a break on the cap hit yet paid him front loaded to the extreme?

Why would the punishment be more than the advantage they received? Over 4 years they paid him 56M, yet his total cap hit was only ~39M, isn't that only a ~16M advantage they received over those 4 year?

His cap hit was just under $8 Millon per season. So, that comes out to a shade under $32 million in cap space. Thus the $24 million gain.

It's these contracts that resulted in cap recapture, along with a max term on contracts of up to 8 years for re-signing your own players, plus the variance between yearly compensation and cap hit has a 35% variance. So now a $6 million cap hit means that at most a player can be paid between $4 to $8 Millon per season . Not these small amounts of $1 million that hossa and weber would receive in their final 4/3 years of their deals.

 

[Off Sides]

His cap hit was just under $8 Millon per season. So, that comes out to a shade under $32 million in cap space. Thus the $24 million gain.

It's these contracts that resulted in cap recapture, along with a max term on contracts of up to 8 years for re-signing your own players, plus the variance between yearly compensation and cap hit has a 35% variance. So now a $6 million cap hit means that at most a player can be paid between $4 to $8 Millon per season . Not these small amounts of $1 million that hossa and weber would receive in their final 4/3 years of their deals.

I hear you, but it still seems like Nashville only received a 4 year advantage where his cap hit was under what his salary actually was, so why wouldn't that advantage be recaptured over a 4 year period starting when he retired?

 

[russ4king]

Wow....people....get a grip on yourselves. It will never come to it.

1st: the current CBA expires before he will likely retire anyway. As it ends after the 2021-22 season.

2nd: both the NHl and NHLPA can opt out of the current CBA in 2019. One is likely to do so....my bet the NHLPA.

3rd: you don't think the NHL will do it's best to avoid this type of situation from happening? They will let Nsh off the hook for the recapture penalities. Fact is the clause was put in to punish teams from circumventing the cap. NSH didn't try to circumvent the cap...Philly did with their offer sheet. Nashville had to match at the risk of losing their best player. There is a big Difference in that situation with say...the Hossa or Luongo contracts. Both of those contracts were created to circumvent the cap, and even still I am not sure if the NHL will hold them to the fire for all of it.

They let the Kings off the hook for the full cap hit on Richards. They let NJ off the hook with their punishment on the Kovalchuk contract. They likely do the same here in some respect.

 

[mouser]

They let the Kings off the hook for the full cap hit on Richards. They let NJ off the hook with their punishment on the Kovalchuk contract. They likely do the same here in some respect.

They hit the Kings with every dollar of settlement paid to Richards, plus 100% of recapture for Richards. They hit NJ with 100% of recapture for Kovalchuk.

 

[Michel Beauchamp]

Does anyone understand the word FUN?? lol i just wanted to see what some people would give up to save themselves from that type of recapture. This is suppose to be a "what if" not "this is exactly what's going to happen"..... Just a bunch of fun suckers lol....hurry up october

Never assume that your idea of "fun" is the same as every other posters' idea of "fun".

And besides the fact that it's even more "fun" when you know what you're talking about...

 

[TurdFerguson]

The sooner they fix that rule the better. No team should have pay more in recapture than is unaccounted for by the salary cap. With one year to unaccounted for Weber's from loaded salary is just $6.85m. I don't understand how a team can fairly be hit with $24.5m penalty when only just $6.85m cap is outstanding. It's a triple facepalm worthy failure. It makes you wonder if they just forgot players get traded and worked of one team only.

They only have to pay the outstanding cap. Articles like this are just written for shock value, and they put the onus for the incorrect information on the article they're basing it on(which states they don't have enough CBA details), rather than doing research.

 

[mouser]

They only have to pay the outstanding cap. Articles like this are just written for shock value, and they put the onus for the incorrect information on the article they're basing it on(which states they don't have enough CBA details), rather than doing research.

That would be incorrect. If you read the recapture clause in the CBA you'll see it creates separate tallies for each team during the term they hold the contract.

 

[Off Sides]

They hit the Kings with every dollar of settlement paid to Richards, plus 100% of recapture for Richards. They hit NJ with 100% of recapture for Kovalchuk.

Although that is true, I have to think his point still stands,

Do you think the NHL or the NHLPA benefits from keeping this form of recapture in place during the next CBA?

not asking as a smartass, really I just can not figure out how it benefits either of them if the point is to have those teams effected be able to both spend to their max and generate as much revenue as they also can?

 

[CDN24]

I think the recapture penalty has been beat to death but what about the buyout? If I am not mistaken the buyout is purely a function of remaining salary owed vs AAV (cap hit).

A buyout does not make much sense in the latter years to anyone holding the contract other than Nashville in the final 2 years of that contract.

Mtl or anyone else with that contract is looking at cap hits of 7.2M over the last 3 years on a buyout plus 3 more years at 333K. They would be better served by sending him to the minors where they can save 950K or so making it a cap hit of 6.9M for three years and if he retires then the recapture hit goes to Nashville.

If he has indicated that he will retire instead of the demotion, it would make sense for the preds to reacquire him and buy him out if there are only 1 or 2 years left.

With 2 years left their buyout penalties over 4 years are 7.2M/7.2M/333K/333K vs the recapture of approximately 12M/12M. with one year left it is buyout at 7.2M/333K.

Actual $ buyout cost is minimal at 2/3 of remaining dollars or 666K for each year left.

At three years left it is almost a wash for the Preds

Buyout 7.2m/7.2m/7.2m/333k/333k/333k vs
he retires 8M/8M/8M


All that to say that there is a way out for Nashville to avoid a 24M hit if he retires with 1 year left. They reacquire him for minimal consideration 7th rounder, and then buy him out. 7.2M cap hit is easier to swallow than 24M. weber would agree as he will get $666,666 out of it.

 

[Toggel]

What would happen if Weber is bought out in the last 2-3 years of his contract? Does the recapture penalty still apply or does it only apply to a player retiring.