Speculation: Why do some buyouts reduce a team’s total cap hit for a year

[olli]

Was looking at the Blue Jackets on CapFriendly and apparently Boqvist’s buyout is $-66k for next season followed by a $533k. I’m pretty sure this isn’t an error because Wennberg’s buyout is $891k next season and their total “dead cap” between the 2 buyouts is $825k (891 + -66). Don’t understand why a team could possibly get a positive penalty for buying out a contract. I would assume for some reason the player owed the team money but why should that count towards the cap??

Obviously 66k doesn’t make any noticeable difference for a team like the Blue Jackets that isn’t trying to compete next year but it could be beneficial for a contender very close to the cap.

Also, I used cap friendly to calculate Nurse’s buyout in the playoffs after he had a bad game. Apparently he would’ve had a -$800k penalty in year 1 or 2 (I forget which year exactly) of his buyout, which could’ve made a big difference for the Oilers.



Why does this site keep reloading the page while I’m typing then only remembering half of what I typed???

Click to read more...

 

[QuizGuy66]

Magic

(I think it is probably has to do with the way the contract dollars are originally spread out tbh)

 

[Treb]

Could have checked the FAQ on capfriendly since you were already there.

Buyouts | Puckpedia

Cost of Buyout For players that are 26 or older, a buyout is 2/3 of the remaining salary owed on the contract. For players that are under 26, a buyout is 1/3 of the remaining salary owed on the contract. All buyouts are spread out over twice the remaining years of the contract. Signing Bonuses...

puckpedia.com

Basically, if the salary is higher than the AAV, the calculation turns it into a saving. If it's lower than the AAV, the cap penalty is bigger.

This is why front-loaded contracts are "buyout-proof" because they can lead to a huge penalty when the salary is a lot lower than the AAV.