CBA Question on Salary Cap Violations

[hopeleslyobvious]

Sorry for the possibly dumb CBA question, but I read through all of Article 50 today looking for this answer and couldn't find it.

 

The CBA allows for teams to be over the cap during the off season, as long as they come back down before the start of the season. What happens if a team does not take the necessary steps to come back down below the cap?

[Taro T]

Sorry for the possibly dumb CBA question, but I read through all of Article 50 today looking for this answer and couldn't find it.

 

The CBA allows for teams to be over the cap during the off season, as long as they come back down before the start of the season. What happens if a team does not take the necessary steps to come back down below the cap?

Hopeless, it is a legit question. Circumvention is covered in Article 26 and allows for some MAJOR penalties for violating the CBA. Sanctions that a team can suffer for intentionally circumventing the CBA include any and / or all of the following:

 

a $1-5MM fine and reduction of next year's cap room;

 

loss of draft pick(s) at Bettman's discretion;

 

forfeiture of game(s), again, at Bettman's discretion;

 

voiding SPC(s); and

 

suspension of individuals.

 

I don't think it's in Mr. Lamiorello's best interest to have a $45MM salary cap hit on October 4. ;)

 

As long as we're on the cap and you've read Article 50, people might be interested in an explanation of the "tagging" rule.

 

The reader's digest version of it is, teams can extend the contracts of their own FA's in the last year of their contract even though that extension might place the team over the cap in the current year if all the current players were back provided there are enough expiring contracts in the following season that the team would still be under the cap.

 

An example would be, the Sabres can give Drury a raise next year up to the value of all expiring contracts (Teppo's $2.6MM, Peters' pittance, Marty's ~$2.1, and any other 1 year $'s (Roy, Paetsch, and anyone else I may be missing).) It's not in the team's best interest to spend all their "tagged" room because they'll be in a situation similar to NJ's but it is available to them.

 

Additionally, they can trade for players with multiyear deals during the season that don't fit under the current salary cap provided the player's current year salary DOES fit under the salary cap and the average annual hit of the salary doesn't use up all of the team's remaining "tagged" room. I haven't had a chance to look closely enough at the details to see if "tagging" a traded player leaves the team it's remaining cap room in the current season or if it burns all that as well.

 

Please feel free to correct any over generalities you see here. I don't have the time to put together a detailed look at it currently.

[hopeleslyobvious]

Hopeless, it is a legit question. Circumvention is covered in Article 26 and allows for some MAJOR penalties for violating the CBA. Sanctions that a team can suffer for intentionally circumventing the CBA include any and / or all of the following:

 

a $1-5MM fine and reduction of next year's cap room;

 

loss of draft pick(s) at Bettman's discretion;

 

forfeiture of game(s), again, at Bettman's discretion;

 

voiding SPC(s); and

 

suspension of individuals.

 

I don't think it's in Mr. Lamiorello's best interest to have a $45MM salary cap hit on October 4. ;)

 

As long as we're on the cap and you've read Article 50, people might be interested in an explanation of the "tagging" rule.

 

The reader's digest version of it is, teams can extend the contracts of their own FA's in the last year of their contract even though that extension might place the team over the cap in the current year if all the current players were back provided there are enough expiring contracts in the following season that the team would still be under the cap.

 

An example would be, the Sabres can give Drury a raise next year up to the value of all expiring contracts (Teppo's $2.6MM, Peters' pittance, Marty's ~$2.1, and any other 1 year $'s (Roy, Paetsch, and anyone else I may be missing).) It's not in the team's best interest to spend all their "tagged" room because they'll be in a situation similar to NJ's but it is available to them.

 

Additionally, they can trade for players with multiyear deals during the season that don't fit under the current salary cap provided the player's current year salary DOES fit under the salary cap and the average annual hit of the salary doesn't use up all of the team's remaining "tagged" room. I haven't had a chance to look closely enough at the details to see if "tagging" a traded player leaves the team it's remaining cap room in the current season or if it burns all that as well.

 

Please feel free to correct any over generalities you see here. I don't have the time to put together a detailed look at it currently.

 

 

Thanks Dave. I don't know why I would think that they would put the penalties for salary cap violations after the definition of the salary cap. :) I read the relevant portions of Article 26, and IMHO, you provided a summary that is right on point.

 

How did you know that a discussion about the Devils cap situation caused me to look all of this up?

[Taro T]

Thanks Dave. I don't know why I would think that they would put the penalties for salary cap violations after the definition of the salary cap. :) I read the relevant portions of Article 26, and IMHO, you provided a summary that is right on point.

 

How did you know that a discussion about the Devils cap situation caused me to look all of this up?

Lucky guess. ;)

 

Actually, the Devils' cap situation brings up an interesting question on a technicality about the CBA and one which the players may want to address in the future if my very quick take on the CBA is accurate (it might very well not be).

 

Gionta is an RFA that the Devils currently don't have cap space to sign. If they sign him, they will have to cut and/or trade another player(s), so they are currently reluctant to sign him. He's worth several $MM per year, so other teams will be reluctant to make him an offer due to their own cap situations and because they don't want to owe the Devils compensation. If he got over $3MM, a team would owe at least a 1st, 2nd, and 3rd to the Devils and could theoretically owe as much as 4 #1's.

 

If Gionta were to go unsigned into December, he couldn't play with any team. Gionta, will be reluctant to sign a deal for significantly less than he's worth (although he may be forced to do a deal for a bit less than he's "worth" due to the reality of his current situation). He (or a player in future years in the same situation) could almost be forced to play for a season in Europe because he can't get a reasonable deal in the current NHL system.

 

I may be missing something, and it's pretty late and I'm beat, so it wouldn't surprise me that I am missing something. But if I'm not, I have a suspicion that the NHLPA didn't see something like this coming. Any thoughts on whether I'm missing something here?

[shrader]

I feel like mentioning that I hope Gionta has to go oversea and never comes back. Stupid BC midgets.

[Eleven]

 

I may be missing something, and it's pretty late and I'm beat, so it wouldn't surprise me that I am missing something. But if I'm not, I have a suspicion that the NHLPA didn't see something like this coming. Any thoughts on whether I'm missing something here?

 

I don't think you're missing something, and I don't think the NHLPA missed it either. There have been "cap casualties" in the NFL, and I'm sure the PA was aware of that going in. But it came to a point where the PA had to take the last deal on the table. And RFAs always faced that hazard under the old system anyway; some dealt with it by signing extensions while still under contract while others sat out for a year, lost income, and moved to Long Island. (Yes, there are some differences between Gionta's situation and Peca's, but also some similarities.)

[Knightrider]

... while others sat out for a year, lost income, and moved to Long Island. (Yes, there are some differences between Gionta's situation and Peca's, but also some similarities.)

 

The only reason for NJ to force Gionta to sit for a year would be to make sure some other team didn't get better. I don't think that was even a consideration with Peca.

 

What is more likely is that every team in the league knows that NJ has to unload significant cap dollars. Their cap situation is lowering Gionta's trade value.

 

Biron's (or Miller's :ph34r: ) situation is pretty similar, in that neither Regier or the NJ GM understand that a player's trade value is now strongly tied to the team salary as well as the player's ability. Darcy played chicken with Biron last year and won (i.e., he contributed and the Sabres made enough to not require the salary dump). This year, it cost Biron's roster spot cost Dumont's spot, and we're still hard against the cap.

[hopeleslyobvious]

The only reason for NJ to force Gionta to sit for a year would be to make sure some other team didn't get better. I don't think that was even a consideration with Peca.

 

What is more likely is that every team in the league knows that NJ has to unload significant cap dollars. Their cap situation is lowering Gionta's trade value.

 

Biron's (or Miller's :ph34r: ) situation is pretty similar, in that neither Regier or the NJ GM understand that a player's trade value is now strongly tied to the team salary as well as the player's ability. Darcy played chicken with Biron last year and won (i.e., he contributed and the Sabres made enough to not require the salary dump). This year, it cost Biron's roster spot cost Dumont's spot, and we're still hard against the cap.

 

We're not quite hard against the cap yet. There is enough money to sign Miller and Kalinin, which would give us a full roster with plenty of depth.

 

The Devils are only under the salary cap right now because of injuries, they have yet to sign Gionta, and they have only 4 healthy defenseman signed. That is salary cap trouble.

[shrader]

The Devils are only under the salary cap right now because of injuries, they have yet to sign Gionta, and they have only 4 healthy defenseman signed. That is salary cap trouble.

 

Not to mention the fact that Frank Doyle isn't exactly an NHL caliber goalie, even as a backup. Brodeur isn't getting any younger, so it's probably not best to play him almost every game.

[hopeleslyobvious]

Not to mention the fact that Frank Doyle isn't exactly an NHL caliber goalie, even as a backup. Brodeur isn't getting any younger, so it's probably not best to play him almost every game.

 

Agreed, especially considering Brodeur showed definate signs of weakness last year.