Negotiations update
Sunday, June 26, 2005
There's been a lot of talk recently about buyouts as one way
teams can shed salary as they transition into a salary cap
world. But there's a suggestion of a possible alternative to
buyouts.
It's not necessarily the dispersal draft that has been
circulating around the rumor mill. Instead, this scenario would
be a twist on a familiar tool to NHL teams -- waivers.
Eric Duhatschek, writing in The Globe and Mail last week, suggested the
league may be looking at a one-time waiver system that "would permit
the NHL's low-budget teams to grab high-priced talent at a
fraction of the cost."
Duhatschek said he believes the league has a plan that
could be pretty simple. Teams would be allowed to put a player
on waivers up to three times under this one-time system to move
players.
-
The first time the player goes on waivers,
he would be available for his entire salary.
-
The second time the player would be
available for 75 percent of his salary and the team putting
him on waivers would pay remaining 25 percent. The catch
here is that the team putting the player on waivers and paying the 25 percent would not have
that money charged against its salary cap.
-
The third time the player goes on waivers he
could be had for half of his salary and the team waiving the
player would pick up the other half. Again, the team waiving
the player would not have its payment charged to the cap.
"In this way, some players who otherwise would
attract zero interest in a new economic landscape — Bobby Holik,
Bill Guerin, Pierre Turgeon, Alexei Yashin — might be attractive
if they were heavily discounted," Duhatschek wrote.
So what would the waiver scenario look like with
Turgeon or Guerin, who carry the two highest salaries for the
Dallas Stars in 2005-06?
Here's how it would break down using both
players' salaries factoring in the 24 percent rollback:
| Bill
Guerin (Salary: $6,738,498) |
|
Time |
New Team Pays
|
Stars Pay |
Stars Cap Cost |
| 1st Waiver |
$6,738,498 |
$0 |
$0 |
| 2nd Waiver |
$5,053,874 |
$1,684,624 |
$0 |
| 3rd Waiver |
$3,369,249 |
$3,369,249 |
$0 |
|
|
Pierre Turgeon (Salary: $4,560,000) |
|
Time |
New Team Pays
|
Stars Pay |
Stars Cap Cost |
| 1st Waiver |
$4,560,000 |
$0 |
$0 |
| 2nd Waiver |
$3,420,000 |
$1,140,000 |
$0 |
| 3rd Waiver |
$2,280,000 |
$2,280,000 |
$0 |
|
In the case of Turgeon, a buyout at two-thirds of his
contract would cost the Stars about $3.04 million. Under the
waiver scenario -- if a team claimed him -- the most the Stars
would have to pay is $2.28 million.
As for Guerin, a buyout at two-thirds would cost the Stars
$8.99 million since he has two years remaining on his contract.
Having him taken in the waiver scenario would cost $6.74 million
at most.
In either case the cost would not be charged against the
Stars salary cap.
Again, just another theory to throw into the mix of how teams
might be able to shed big contracts as they try to adjust to the
salary cap.
Meanwhile, here's an update on where the negotiations may
stand based on various media reports. The two sides resume talks
Monday.
|
Element |
Status |
| Salary Cap System |
It's still believed league-wide player
costs will be capped at 54 to 55 percent possibly using an escrow system
to ensure compliance. |
| Salary Cap Range |
The salary cap range numbers vary, but a
minimum team payroll of $22-24 million and a maximum of $36-38 million
seem to be the most widely reported figures. The cap in some reports has
gone as high as $40 million. Those cap figures supposedly include
benefits and other costs, which could amount to between $2 million and
$3 million. So, a cap of $38 million could mean an actual team payroll
of $35-36 million. |
| Luxury Tax |
There have been reports that a
dollar-for-dollar luxury tax could kick in halfway between the minimum
payroll and the maximum. That could put it in the $28 to $31 million
dollar range. |
| 24 Percent Rollback |
The latest word is that the 24 percent
rollback, which was proposed by the players in their December 9
proposal, is still considered to be part of the deal. |
| Free Agency |
The New York Post reported recently that free agency
will remain at 31 this summer and drop, possibly to as low as 28, during
the rest of the term of the CBA. Some reports have it dropping to 30 the
first year of the deal. |
| Qualifying Offers |
The expectation is that the two sides will
work off the players' December 9 proposal, which proposed these rules
for qualifying offers:
- Players making less than $660,000 would get qualifying offers of
110 percent.
- Players making $660,000 to $1 million would get qualifying
offers of 105 percent.
- Players making more than $1 million would get qualifying offers
of 100 percent.
|
| Salary Arbitration |
Again, the expectation is that the NHLPA's
December 9 proposal will provide the framework for this system. Both
teams and players would have arbitration rights under certain
circumstances. |
| Entry-Level System |
Entry-level salaries are expected to be
capped at around $850,000 and there is expected to be strict limits on
the bonuses that players used to haul in big money under the previous
system. |
| Revenue Sharing |
Details remain vague, but it's been reported
that the players are relatively happy with the progress made on the
revenue sharing issue. It's still not clear what monies will make
up the majority of the pool. |
| 2004-05 Contracts |
Although some team officials have said they
are still unsure about the status of 2004-05 contracts, the New York Post reports that 2004-05
contracts will be wiped out as part of the agreement. |
| Buyouts |
There will reportedly be a time
frame this summer during which teams can buyout players and not have the
cost (67 percent) charged against the salary cap. The catch is
that teams will not be able to re-sign the the players whose contracts
were bought out. The New York Post has reported that there is expected to be
a set amount of time during which a team would not be able to re-acquire
a player it has bought out. Some reports have said teams will be limited to
buying out just two players. |
| Olympic Participation |
Although nothing has been made official, most of the reports on this topic indicate that
the two sides have agreed that NHL players will take part in the 2006
Winter Olympics in Turin as long as the NHL season starts on time. |
| Schedule/Playoffs |
Anaheim GM Brian Burke told CKNW radio in
Vancouver that he had heard the league would stick with an 82-game
schedule but would go ahead with plans to expand the playoffs. |
|
Indicates Subscriber only
content