This article is cross-posted from my site: www.checkingfrombehind.com. I thought I’d share it with you to explain the circumstances on why the NHL feels it is not a “legal” contract.
Almost a month after the alleged “errors” in their qualifyings of RFA players, the Chicago Blackhawks are faced with another possible problem, only this time they won’t be losing players, they’ll be losing draft picks and up to a $5M fine by the NHL. It seems their contract for UFC Marian Hossa, a significantly front-loaded 12 year deal worth $62.8M, is not in compliance with the Collective Bargaining Agreement (CBA). How is that you ask?
Well, there is a new rule that states that if any player over the age of 35 signs a contract with a club and retires before the end of the contract, the contract’s cap hit will still be in effect. For example: If Joe Sakic signed a 2 year deal at the age of 38 for $5M per season, and retired after one year, his second year at $5M will still count against that team’s Salary Cap.
Here’s where it gets tricky. Marian Hossa is not 35 years of age. He’s a 30 year old player who signed a 12 year deal, which would take him to the age of 42. Here’s how his contract works out:
2009-10 season to the end of the 2015-16 season, Hossa will make $7.9M per season.
2016-17 season he will make $4M.
2017-18 to the end of the 2018-19 season, he will only make $1M.
2019-20 to the end of the 2020-21 season, he will make just $750K.
Thanks to the large drop in the final 5 seasons, Hossa’s cap hit is only $5.233M since the league bases the hit on the average of the contract’s duration.
Where the problem exists:
The Chicago Blackhawks have allegedly made an agreement with Hossa either prior to the contract, or in the contract itself, that the 30 year old forward will retire before the contract ends. It is expected that he will retire after the 2016-17 season at the age of 38, and thus the final 4 years he will relieve the Blackhawks of $5.233M per season from the Salary Cap, or $20.932M in total. Compare that to his actual payment in the last 4 years of his contract at just $3.5M in total.
The NHL has officially begun an investigation of this contract and rules it to be “not in compliance with the CBA”. The Blackhawks made the sure the contract’s cap hit would be lower by signing him to a deal of which he would never play for the actual length. In all honesty, they could have just signed him until he was 45 with the same $750K yearly salary at the end and drop the cap hit down to $4.336M per season. If this type of contract is considered “approvable” by the league, don’t be surprised to see teams begin to sign young up and coming stars to almost 20 year deals in order to front load the contract with a significant dip at the end in order to keep the cap hit low. Is it a genius move by the Blackhawks? Absolutely. Is it cheating? Not unless it states this type of contract is illegal as per the CBA that was written 5 years ago before these types of deals had even come up.
Micheal A. Aldred