Are the dominos about to fall on long-term contracts?

[carpandean]

http://tsn.ca/nhl/story/?id=286333

 

The National Hockey League is reportedly investigating Marian Hossa's new 12-year contract with the Chicago Blackhawks amid allegations that it circumvents the collective bargaining agreement.

 

According to the Edmonton Sun, if Chicago is found guilty, it could face a maximum fine of $5 million and the loss of draft picks. Hossa and the Blackhawks allegedly agreed that the star forward would retire before the end of the contract, which would lessen the cap hit on the team.

 

I can't imagine that their discussion is unique among teams that have signed long-term contracts.

[deluca67]

http://tsn.ca/nhl/story/?id=286333

I can't imagine that their discussion is unique among teams that have signed long-term contracts.

Not to point out the obvious. Hossa is 30 years old. Is there any doubt he would retire before he was 42? Would they need to have even discussed that?

[shrader]

Not to point out the obvious. Hossa is 30 years old. Is there any doubt he would retire before he was 42? Would they need to have even discussed that?

 

So they could add more years at the end of the deal at a low salary, lowering the average money per year, which make the cap hit smaller. Pulled right from the TSN link in carp's post:

 

Hossa's contract results in a $5.23 million cap hit each year over the length of the deal, according the report. That's despite a lot of the money being paid early in the contract with Hossa making $7.9 million annually for the first seven years before his salary tapers off.

[tom webster]

http://tsn.ca/nhl/story/?id=286333

I can't imagine that their discussion is unique among teams that have signed long-term contracts.

 

The only problem with the contract is if it can be proven that there is a side deal where Hossa explicitly agreed to retire at a certain point in time. Oterwise this is much ado about nothing.

Like it or not, the deal is perfectly legal within the framework of the CBA. It may violate the spirit of the agreement but not the letter of the agreement.

[deluca67]

So they could add more years at the end of the deal at a low salary, lowering the average money per year, which make the cap hit smaller. Pulled right from the TSN link in carp's post:

Which goes to my point. When did the NHL decide to investigate this deal? Did they approve it and now have questions after the fact?

[darksabre]

The NHL has been all over Chicago's nuts this off-season.

[Two or less]

The NHL has been all over Chicago's nuts this off-season.

 

LOL yeah seriously. I mean, it's good that they are because in both cases they were doing shady activities, but it's funny for sure.

[shrader]

The only problem with the contract is if it can be proven that there is a side deal where Hossa explicitly agreed to retire at a certain point in time. Oterwise this is much ado about nothing.

Like it or not, the deal is perfectly legal within the framework of the CBA. It may violate the spirit of the agreement but not the letter of the agreement.

 

And good luck proving that any side deal might have taken place. They obviously weren't dumb enough to put it in writing (which also means Hossa wouldn't have to honor any deal if it was made). Then all it comes down to Chicago's and Hossa's word.

[Bmwolf21]

And good luck proving that any side deal might have taken place. They obviously weren't dumb enough to put it in writing (which also means Hossa wouldn't have to honor any deal if it was made). Then all it comes down to Chicago's and Hossa's word.

Didn't something similar happen in the NBA a few years back? Joe Smith kept signing below-market-value 1-year deals so the T-Wolves would have some cap relief to make other moves, and McHale promised him a lucrative multi-year deal down the road. I doubt McHale and Smith were dumb enough to put that in writing but the league found out and bitchslapped the T-Wolves hard.

[henysgol]

Which goes to my point. When did the NHL decide to investigate this deal? Did they approve it and now have questions after the fact?

 

For real. I think it's just a bunch of hoo-haa conjured up by the NHL brass and their media cronies to make us feel like something interesting and shocking happened over the summer. Where's Avery been? He's not their media anymore?

[wonderbread]

For real. I think it's just a bunch of hoo-haa conjured up by the NHL brass and their media cronies to make us feel like something interesting and shocking happened over the summer. Where's Avery been? He's not their media anymore?

 

 

who is the picture of in your avitar?

[carpandean]

According to a video report on TSN, you can add Pronger to the list of contracts under investigation.

[That Aud Smell]

Like it or not, the deal is perfectly legal within the framework of the CBA. It may violate the spirit of the agreement but not the letter of the agreement.

QFT.

 

And good luck proving that any side deal might have taken place.

this is what it will all come down to. wouldn't it be something if they had something to this effect? in the era of proliferated e-communications, there could be something out there.

 

my sense is that the purpose of this "investigation" may be two-fold: (i) rehabilitate whatever damage these contracts have done to the league's image and (2) forecast for the owners and players that this sort of nonsense will not be tolerated when the next round of negotiations come up (instead, there will be some other loophole that makes its way into the cba and allows for contract chicanery to the detriment of small-market teams).

[Taro T]

QFT.

this is what it will all come down to. wouldn't it be something if they had something to this effect? in the era of proliferated e-communications, there could be something out there.

 

my sense is that the purpose of this "investigation" may be two-fold: (i) rehabilitate whatever damage these contracts have done to the league's image and (2) forecast for the owners and players that this sort of nonsense will not be tolerated when the next round of negotiations come up (instead, there will be some other loophole that makes its way into the cba and allows for contract chicanery to the detriment of small-market teams).

This CBA is, and has been, very reasonable. While there are some excesses, like the ability for teams to massively reduce salary at the end of the useful portion of a contract, the CBA has significantly leveled the playing field. The players themselves should be opposed to these sorts of "circumvention", as having a hard salary cap where total player costs WILL be x% of total revenues, every time player A gets an extra $, it is coming out of some other player's pocket. (If player salaries are supposed to be 57%, but they come in at 58.425%, then every player loses 2.5% of his on paper salary. And vice-versa, when they were supposed to be 54%, but came in under everybody got year end bonuses.) On a side note, they also should be opposed to teams trading cap space when a player is traded. All it does is raise the on-paper salaries league-wide (so the actual salaries have to come in lower when the final accounting is done) and it widens the gap between what the haves spend and what the have nots spend.

 

There is absolutely no way to completely level it, short of getting the owners to completely share revenues equally. (I don't see the Sniders nor MSG willing to split revenues equally with the Cohens under any circumstance.) If they did truly find a way to make a completely level field regarding players; then the big money guys would have a whole lot more to spend on scouting, front office, and coaching. It never gets completely level without across the board revenue sharing (with a provision to allow those owners with huge club related debt to get slightly more to service the debt).

 

A few tweaks (ottomh) that I'd like to see to the next CBA follow.

 

- Adjusting where the salary cap falls in relation to what the 54-57% range is calculated out to (rather than allowing teams to spend $8MM above or below that point, only allow them to spend $4MM above & $8MM below that point - that will keep players keeping a higher %age of their on-paper salary at the EoY and force the weaker sisters to stay closer spending-wise to the big boys).

 

- If an older player is signed to a non-buyoutable contract, do not let the normal BFI-LTIR +/or retirement be an option to get those salaries off the books (I'd change it so that 1/2 of that salary post-injury/retirement counts against the salary cap, and the rest gets paid to the player outside of the salary cap; the way it is currently set up the team can get the cap relief and the payments count against the league's 54-57% that the players get; if a team wants to take a chance on circumventing the rules, they should have to eat the full shot of it).

 

- A contract can only go down $2MM per season and the minimum salary can not be less than 50% of the previous high $ amount (so if somebody gets $10MM one year, he can't get less than $8MM the next and he can't get less than $5MM anytime after that; we can call it the Danny Briere rule).

 

- Teams can still buyout contracts at the end, but any years bought out after age 42 get paid in full and hit the cap in 1 year increments (rather than the current 2, we can call that the Marian Hossa rule).

 

- Increase revenue sharing of locally generated revenues league-wide by 5%.

[That Aud Smell]

This CBA is, and has been, very reasonable.

holy smokes - thanks for weighing in, taro. i printed out the page with your reply; it bears careful study.

[shrader]

- A contract can only go down $2MM per season and the minimum salary can not be less than 50% of the previous high $ amount (so if somebody gets $10MM one year, he can't get less than $8MM the next and he can't get less than $5MM anytime after that; we can call it the Danny Briere rule).

 

Personally, I'd like to see them eliminate the variation in contracts all together. I don't see any point to it other than the issue that brought us this thread. Maybe I'm missing something here, but I can't think of any other reason for it.

[spndnchz]

Personally, I'd like to see them eliminate the variation in contracts all together. I don't see any point to it other than the issue that brought us this thread. Maybe I'm missing something here, but I can't think of any other reason for it.

Younger players will supposedly be worth more and older one's worth less as time passes...

 

If the team can afford it today, IMO, better to sign a flat deal, the cap goes up and the 'effective' salary goes down.

[Taro T]

Personally, I'd like to see them eliminate the variation in contracts all together. I don't see any point to it other than the issue that brought us this thread. Maybe I'm missing something here, but I can't think of any other reason for it.

I can think of 1 primary reason for it. Over time, the average salary will typically go up. A player who knows he'll get $9MM over the next 3 years will probably be happier over the life of the deal if he makes 2.5, 3, 3.5 than he will if he makes 6, 2, 1; where he makes a bit more than average every year rather than crushing it in one year and then being "low paid" thereafter. (Even though, technically, the latter puts more money in his pocket over the life of the contract as he can earn interest on what is actually in his pocket.)

 

Even if a guy gets 3, 3, 3; if (hypothetically) the average salary was 2.5, 3. 3.5 over that time span, he'd feel like he's ahead of the game in Y1, breaking even in Y2, and "getting screwed" by Y3.

 

Throw in the fact that people like to get raises (it feels good to see a few more $'s in the paycheck) and getting a reduced salary at the end of the deal might result in a lifestyle change (it shouldn't if the guy has good financial planners, but we're talking pro athletes, not Rhodes Scholars), I can see where a player would like to have a raise/raises throughout the deal.

 

And the time-value-of-money should have management wanting to backload the deals as well.

 

It's only defacto cap circumvention that makes management want to give out huge deals up front followed up by cheap deals.

[shrader]

The fact that it's guaranteed money pretty much cancels out the idea that people like getting raises. For basically any reasonable (ie. non-75 year contract), they're signing for the whole thing up front. As for it favoring the team to backload, it really seems like those kind of deals have disappeared over the last year. Now obviously I'm not familiar with every contract around the league, but it just seems like the combination of guaranteed money and the desire to cash out has essentially eliminated the backloaded deal. I'm having a hard time finding anyone who is right around UFA age and has signed a back loaded deal in the past year.