An owner’s wild comments point to the NHL addressing cap circumvention in the new collective bargaining agreement.
Minnesota Wild owner Craig Leipold expressed his concern about the length it took to sign free agents Zach Parise and Ryan Suter in an interview with TSN. With negotiations for the new collective bargaining agreement getting underway, NHL owners may change the rules to prevent long frontloaded contracts from circumventing the cap.
“I think it’s too much,” Leipold said. “We need to fix this so that all the teams don’t have to go through this in order to get these types of players.”
The Wild signed Parise and Suter to massive contracts. Parise and Suter were both signed to identical 13 year $98 million dollar contracts. Of that $98 million dollars $35 million is paid out in the first three years and only $4 million dollars is paid out in the last three years.
Leipold commented that the decision to green light the superstar signings arose from the Wild’s need to compete in the NHL both competitively and financially.
“It’s expensive to have a business in this league,” Leipold said. “These kinds of financial commitments, for us, frankly, is in hopes of turning our team around and our financial situation around.”
These massive frontloaded signings have become the new norm in the salary cap NHL and with the amount of contracts gone bad, it is a problem the NHL has to fix.
The NHL first showed some pushback after Ilya Kovalchuck signed a 17 year, $102 million dollar contract with the New Jersey Devils in July, 2010. The NHL rejected the contract that would have paid Kovalchuck $95 million over his first ten seasons and $7 million over his last seven seasons.
The NHL and the NHLPA went to arbitration where arbitrator Richard Bloch upheld the NHL’s rejection of the contract.
Kovalchuck re-signed with the Devils for $100 million, 15 year contract that still circumvented the cap but was agreed to by the NHL. The same day it was announced the NHL and NHLPA had agreed to amend the collective bargaining agreement as a short term fix to the problem.
Toronto Maple Leafs general manager Brain Burke has repeatedly stated his disdain for front loaded contracts.
“My objection is to the deals where the last three or four years or two or three years are artificially low numbers to drive the cap hit down,” Burke said in an interview with the Fan590. “That’s where we draw the line as an organization.”
Not signing massive contracts for key free agents puts the rebuilding Leafs at a disadvantage but Burke isn’t worried. “I expect all these issues will be addressed in the collective bargaining agreement,” Burke said.
So what is the ideal solution to the problem of front loaded contracts? The NHL could just copy the NBA’s model of having players only able to sign contracts for a maximum length of five years. This solution would be the quickest and easiest way to avoid breaking the rules for cap circumvention due to front loaded contracts as it would be impossible to tack on extra years to lower the cap hit for players.
Regardless of the solution, cap circumvention will be a key point of contention in the next collective bargaining agreement. Expect resistance from the NHLPA.
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