Capped: The NHL’s New Pension Plan

Eric Daoust

2013-07-04


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