Getty ImagesOne of the few clear objectives in the lockout for NHL Commissioner Gary Bettman: Ending the era of cap circumventing contracts; the ones whose annual salary peaks and valleys allow teams to cheat the system with long-term deals.
They were born out of the last lockout and the implementation of the salary cap system. Every new contract that “back-dove” in the final years to bring the cap hit down was an embarrassment for Bettman, who cancelled a season and watched his owners undercut the rules they battled to establish.
Both the NHL and NHLPA knew that term limits on contracts would be in the next CBA; it was then a matter of figuring out what those limits would be, and what kind of controls would be established to ensure the annual value of the deals didn’t dramatically fluctuate in order to get around the cap.
The NHLPA wanted a “cap benefit” provision that would have punished teams whose players retired during the dirt-cheap latter years of their contracts. While it had potential, it didn’t firmly address cap circumvention, or at the very least it pushed the problem down the road.
The NHL wanted “salary variance” restrictions, linked to the highest salaried year of a new contract. Under its plan, the annual salary of a player can’t increase or decrease more than a certain percentage of that highest contract year.
The initial number, on a maximum 5-year contract, was 5 percent of the first season. Then it was bumped up to 10 percent; so if a player made $10 million in base salary (his highest year in theory) in Year 1, he could drop to $9 million in Year 2, $8 million in Year 3 and so on.
This would seem to be a handy way to get rid of cap circumvention. And it might be.Read More »from Will NHL’s move on salary variance still curb cap circumvention?