On the surface, it looks like the most bizarre point of contention currently prolonging the NHL lockout: Players fighting to give owners the right to buy them out once a new collective bargaining agreement is signed.
However, there is good reason behind the fight.
In addition to the added flexibility the NHL Players’ Association feels compliance (or amnesty) buyouts will bring to the hard cap system—something the NHL is looking to tighten—is the fact that the only other time in league history they were offered the players didn’t make out too badly.
Fourteen men had their contract terminated for two-thirds of its remaining value during the 10-day buyout window that opened after the last CBA was signed in July 2005. Of that group, only two saw their NHL career end immediately because of it.
The rest, including well-compensated Rangers centre Bobby Holik, found work elsewhere and didn’t end up taking much—or any—financial hit as a result.
“It kind of worked out,” Holik told The Canadian Press in September. “It was not a priority, but between the buyout and the (free-agent) contract from Atlanta it all worked out. The way my contract was structured, I don’t think I lost anything even because of the lockout.”
It’s interesting that the topic of one-time compliance buyouts only made its way into the current negotiations last week, when the NHL and NHLPA started getting closer to a deal. Ultimately, it may end up being the final significant hurdle to cross before a new CBA is signed.
Of the three remaining issues deputy commissioner Bill Daly recently identified, transition rules are the only one where the sides are diametrically opposed. The NHLPA has accepted term limits on contracts but hasn’t yet come as far as the NHL would like. Similarly, the sides remain separated by two years on the proposed length of the CBA.
As for transition, the NHL has offered one season with a salary cap of US$70.2 million before reverting to one based on a 50-50 split of revenues, which would likely see it drop by about $10 million the following year.
Unlike in 2004-05, when the league first adopted the salary cap, owners don’t feel there is any need to have a round of buyouts that aren’t counted against a team’s annual limit.
“All of that money which you pay those players to buy out those players would be outside the system, outside the share, outside the cap,” Daly said last week. “That’s more dollars that’s coming from the clubs, going to the players (and is) not counted in the system. For us that’s a nonstarter because we don’t need it in this case.”
If no special transition rules end up making their way into the new CBA, a number of teams would be forced to get creative with their rosters. For example, the Philadelphia Flyers already have $57.4 million in cap space committed to 16 players for 2013-14, according to capgeek.com.
And they are far from alone.
Should they end up being allowed, the most likely candidates for compliance buyouts would be highly paid veterans like 35-year-old defenceman Wade Redden, who earned $6.5 million last season while playing on the New York Rangers’ AHL team. Only two of the 14 players bought out in July 2005 were under the age of 30 and nine of them were scheduled to earn more than $2.5 million.
The Detroit Red Wings used the amnesty to rid themselves of three players, the Columbus Blue Jackets and Dallas Stars each shed two players and the Philadelphia Flyers bid adieu to popular veterans John LeClair and Tony Amonte.
“It’s not based on their play, it’s based on the economics,” Ken Hitchcock, then the Flyers coach, said of the decision.
Even from an individual perspective, a buyout is not always a bad thing.
Ray Whitney was a 33-year-old set to earn $2.66 million when the Red Wings cut him loose just days after the last lockout ended. Not only did he win a Stanley Cup in Carolina the following season, Whitney is still going strong at age 40 and signed a $9-million, two-year contract with Dallas over the summer.