Vincent Lecavalier USA Today Images



How will the recent compliance buyouts affect long-term cap situations around the league?


 

Since the end of the NHL season one of the main focuses has been compliance buyouts. With the salary cap ceiling dropping from $70.2 million to $64.3 million this summer, it makes sense to allow teams to get two cap-free buyouts to help deal with the jarring change.


Before we go any further, there are some who are stil not 100% clear on the difference between compliance buyouts and regular buyouts. The compliance buyout does not count against the team’s salary cap but must be paid in cash to the player just like under the old collective bargaining agreement. The monetary cost of the buyout is the total remaining player salary in the contract paid over twice the remaining length of the contract.

 

In addition to these compliance buyouts, the new collective bargaining agreement also put a cap on contract length. The eight-year maximum was not present under the old agreement and some absurdly-long deals were signed, many of them with the intention of circumventing the salary cap rules.


As we have seen, many of these long contracts did not play out as well as the teams wanted. Some of them were bought this week with as many as eight years remaining on the agreement. Based on the rules, this means that the players will be paid by their former employers for well beyond the next decade and well past the end of their respective careers. This is the NHL’s unintended new pension plan.


Here are the first three players with lifetime contracts that were recently bought out, with help from Capgeek to obtain numbers:


Ilya Bryzgalov (G – Philadelphia)


SEASON

BUYOUT SALARY

2013-14

$1,642,857

2014-15

$1,642,857

2015-16

$1,642,857

2016-17

$1,642,857

2017-18

$1,642,857

2018-19

$1,642,857

2019-20

$1,642,857

2020-21

$1,642,857

2021-22

$1,642,857

2022-23

$1,642,857

2023-24

$1,642,857

2024-25

$1,642,857

2025-26

$1,642,857

2026-27

$1,642,857


Buyout total: $23,000,000 (14 years)


Player age at end of buyout payments: 47


Ilya Bryzgalov’s stint in Philadelphia was nothing short of a trainwreck, both on and off the ice. His contract of nine years and $51 million was bought out after just two seasons. The end result will see him get paid by the Flyers for the next 14 years.

At the age of 33, Bryzgalov still has a few years left to play. If he decides to stay in the NHL he will probably have to sign a smaller contract while trying to rebuild his approval to other general managers. This will hardly hurt him because he will be getting $1.6 million from his former team in addition to his salary with his new club.


When the time comes that Bryzgalov decides to stop playing hockey in favor of sipping hot tea and watching out for scary bears in the forest, he will still be getting paid very well to basically do nothing. He will be receiving money from the Flyers until he is 47 years old.


Vincent Lecavalier (C – Tampa Bay)


SEASON

BUYOUT SALARY

NHL SALARY

TOTAL SALARY

2013-14

$4,761,905

$6,000,000

$10,761,905

2014-15

$4,761,905

$6,000,000

$10,761,905

2015-16

$3,761,905

$4,500,000

$8,261,905

2016-17

$1,761,905

$3,000,000

$4,761,905

2017-18

$1,761,905

$3,000,000

$4,761,905

2018-19

$1,761,905

 

$1,761,905

2019-20

$1,761,905

 

$1,761,905

2020-21

$1,761,905

 

$1,761,905

2021-22

$1,761,905

 

$1,761,905

2022-23

$1,761,905

 

$1,761,905

2023-24

$1,761,905

 

$1,761,905

2024-25

$1,761,905

 

$1,761,905

2025-26

$1,761,905

 

$1,761,905

2026-27

$1,761,905

 

$1,761,905


Total: $32,666,667 (14 years)


Player age at end of buyout payments: 47


Many fans felt bad for former captain Vincent Lecavalier who was bought out by Tampa Bay despite still playing at a high level. He signed an 11-year, $85-million contract before the 2009-10 seasonthat carried a cap hit of over $7 million. Even though he is still producing, he is not the player he once was and was clearly not playing at a high enough level to justify the massive commitment by the Lightning.


Financially, it is safe to say that Lecavalier is doing just fine now that he has tagged on with the Philadelphia Flyers on a five-year pact. His buyout salary is front-loaded because of signing bonuses and his new deal is also front-loaded. The end result is that he will make just short of $30 million over the next three years.


During the final year of his current deal with the Flyers, he will still be making close to $8 million in total salary. At that point he will be 38 years old and will still be owed nine years of buyout fees. Depending on how he plays in Philadelphia there is a chance that he could still be earning more than $5 million in total salary per year in total salary in 2018-19 if he chooses to continue playing.


In the end, Lecavalier will be paid slightly less than he would have if he stayed in Tampa Bay to play out the rest of that contract. This is countered by buyout payments that will pay him until he is 47 years old. Not bad at all.


Rick Dipietro (G – New York Islanders)


SEASON

BUYOUT SALARY

2013-14

$1,500,000

2014-15

$1,500,000

2015-16

$1,500,000

2016-17

$1,500,000

2017-18

$1,500,000

2018-19

$1,500,000

2019-20

$1,500,000

2020-21

$1,500,000

2021-22

$1,500,000

2022-23

$1,500,000

2023-24

$1,500,000

2024-25

$1,500,000

2025-26

$1,500,000

2026-27

$1,500,000

2027-28

$1,500,000

2028-29

$1,500,000


Total: $24,000,000 (16 years)


Player age at end of buyout payments: 48


As everyone knows, Rick Dipietro had his career derailed by injuries. He is so injury-prone that he has only appeared in 50 NHL contests over the last five years. But he was the first to sign the lifetime contract which paid him a flat $4.5 million per season until he hit 40 years of age.


There is a good chance that the buyout marks the end of Dipietro’s NHL career. He could try a comeback but there are too many talented backup goalies out there for him to secure a cheap backup gig immediately.


Instead, he would have to go the minor league route. With that said, it may not be wise for him to do this. At some point he has to consider the cost of spending the majority of his time in rehab and the nice paychecks coming from the Islanders regardless of what he does with his life.


The title for longest pension plan goes to Dipietro who will be receiving money from his former team until just before his 49th birthday. That is a pretty good consolation prize for having his career taken from him.


Final Word


The NHL’s new unintended pension plan is simply a consequence of the absurd rules of the old collective bargaining agreement allowing unlimited contract lengths and extreme year-to-year salary variance to reduce the final cap hit. Longer agreements come with increased risk and in these three cases the teams obviously guessed wrong. Even though the teams will not be penalized on the salary cap, they will still be punished financially by paying the player for a very long time.


 

Previously from Daoust:

 

 

 

Cap Breakdown: the Central Division

Cap Breakdown: the Atlantic Division

Cap Breakdown: the Pacific Division

Cap Breakdown: the Northeast Division

Capped: Breaking Down a Trade

 

 

 

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