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There Could Be A Problem With Hossa’s Contract

from Bruce Garrioch of the Ottawa Sun via the London Free Press,

The NHL is investigating whether Marian Hossa’s new 12-year, $62.8-million (all terms US) contract with the Blackhawks circumvents the collective bargaining agreement and the salary cap, Sun Media has learned.

The ’Hawks could be facing a maximum fine of $5 million and the loss of draft picks if the league’s investigation uncovers proof of allegations that Chicago discussed the possibility of Hossa retiring before the end of the deal, which would end Hossa’s cap hit.

NHL deputy commissioner Bill Daly confirmed the investigation in an e-mail yesterday, stating that league officials are concerned with the structure of the contract.

continued

Filed in: NHL Teams, Chicago Blackhawks | KK Hockey | Permalink
 Tags: Marian+Hossa,

Comments

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Fire Bowman, both of them!

What a summer for the Blackhawks.  They say the want to be like the Wings, this is not the way to go about it!

Posted by Grant on 07/30/09 at 08:39 PM ET

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Of course they might have talked about it informally, or mentioned it in passing - not that there was any need to.  The information is right in the CBA for anyone to use to their advantage.

If they didn’t keep it quiet enough so there is no evidence of the discussions, then they were stupid.

Posted by Baroque from Michigan on 07/30/09 at 08:48 PM ET

Primis's avatar

Why is the league so gung-ho on “making examples” of folk this offseason, but so incredibly gutless at protecting their players from on-ice violence in-season?

They want to make an example of Ballsile.  They want to make an example of the Hudler-KHL thing.  They want to make an example of the Hawks.

But by god, Chris Pronger can put his elbow through someone’s temple… and the league will just whistle, twiddle its thumbs, and look the other way.

Posted by Primis on 07/30/09 at 08:51 PM ET

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If the league is unhappy with Chicago’s deal with Hossa, they can’t be exactly thrilled with the Red Wings’ long term signing of Zetterburg and Fransen.

Posted by North Wings on 07/30/09 at 08:57 PM ET

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Why is the league so gung-ho on “making examples” of folk this offseason, but so incredibly gutless at protecting their players from on-ice violence in-season?

Because one actually requires a lot of effort continuously applied over several years to set standards and enforce them with (minimal) slippage and as much consistency as possible.

The other gives an appearance of effort without requiring as much sustained effort or focus on a problem.  It enables a group with ADD to still look busy by blustering a lot without doing as much.

Posted by Baroque from Michigan on 07/30/09 at 09:34 PM ET

J.J. from Kansas's avatar

All I can hope is that the next work stoppage fixes the problems that the NHL is creating for itself.  I just don’t see a way that the NHLPA and the league come to an agreeable CBA in the next go-round when many players find themselves without teams or having to play in Russia because nobody can afford them.

Of course, what the NHL wants is for those players to take less money, which is why they’re not at all interested in hammering out anything that resembles a transfer agreement with the KHL.

Of course, you also can’t give the players long-term security either because that’s bad for forced parity…

I’m absolutely terrified that the bean counters are going to screw this league up.

Posted by J.J. from Kansas on 07/30/09 at 09:47 PM ET

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Is the league trying to find out about alleged conversations inside management or between management and player? The article doesn’t make that clear. I can see a penalty if there was some sort of gentleman agreement that after so and so year, he’d retire. That would be collusion. But if said discussions took place inside of management only about that possibility, so what. There is no guarantee that he’s going to retire. We are seeing players in all sports playing into their early 40s. How is the league going to prove intent?

Posted by UMFan from Colorado on 07/30/09 at 10:07 PM ET

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We want to know if the possibility of player retirement was ever discussed or even contemplated.

The League admin boys would have to be idiots to think that, based on the lopsided payouts in the contract, that “early retirement” wasn’t discussed. Oh, wait. I forgot. They are idiots. My bad.

If the league is unhappy with Chicago’s deal with Hossa, they can’t be exactly thrilled with the Red Wings’ long term signing of Zetterburg and Fransen.

The overall “intent” of the Z and Mule contracts might be the same, but at least Tick Tock knew better than to create an obvious appearance of that. As the article suggests, the first three-fourths (eight years) of Hossa’s contract is worth 95% of the contract’s value. No one in their right mind thinks Marian is going to play the last three years of his contract for a total of $2.5M.

At least with Z and Mule, there’s at least a reasonable expectation that they’ll play their final three years for a total of $5.35M and $4.0M respectively. That’s especially true because both Z and Mule will be 40 at the end of their contracts. At the end of his contract, Hossa would be 42. And if he retires at 39, his cap hit would be just $375k per year. I think that’s what drew the League’s attention.

The Hawks have made this summer into a case study for how not to handle a hockey club under a salary cap. And that doesn’t even address the fact that they signed Hossa knowing he probably would miss the first two months of the season (at a cost of about $2M to the organization).

Every time we see stuff like this, it makes you just that much more proud of the fact that Ken Holland is the guiding force behind the Wings. And the fact that he constantly beats Lil’ Gary at his own game only makes it that much better. smile

Posted by OlderThanChelios from Grand Rapids on 07/30/09 at 10:46 PM ET

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It is a little bit silly that now the NHL is concerned about teams circumventing the cap, or that they are concerned that the Hawks/Hossa contract is aimed at that.  Teams have been front loading long term contracts for years to circumvent the cap.

If the NHL doesn’t like cap circumvention, they need to change the rules.  Making an example out of one contract that is in principle, though not perhaps in extremity, any different from what other teams are doing is ridiculous.  No clarity about where the line is to be drawn in the future will be advanced by it.  Exactly how many years at the tail end of a contract, and exactly how much money, and precisely what age must the player be, etc., etc., etc. is sufficient for a contract to count as sour?

I’m of the opinion that either the player’s earnings for that year should be their count towards the cap or the cap cost shouldn’t be changed through a trade and stiffer cap penalties for contract should stand for buy-outs.  These are two starting options to consider.  But I’ll leave the details to the experts…

Posted by Chris from Minnesota on 07/30/09 at 11:00 PM ET

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“We’re trying to understand how it was negotiated and whether the intent and effect is to circumvent the cap,” wrote Daly.

Obviously, its what good GM’s do.  The cap is a huge pain in everyone’s side. (minus every team south of the mason-dixon line (save dallas).

Posted by DrW from Royal Oak, MI on 07/31/09 at 05:06 AM ET

Red Winger's avatar

This is what happens when Scotty Bowman is the man calling all the shots for your organization in the post-lockout NHL.

Posted by Red Winger from Sault Ste. Marie on 07/31/09 at 06:48 AM ET

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Here could have been a simple solution. If the player retires, redo the accumulated credit cap space for the years Hossa did spend on the team, and the accumulated “real” cap space it should have counted towards, and then take out that accumulated difference in the following year for the team’s cap space.

Or you got another solution: Keep counting the regular cap space for the retired player until the end of the term of the original contract and subtract the base salary the player is forgoing for the years he is not serving from each of the remaining cap years.

So if Hossa retires with 3 years to go, keep counting 5M plus on the cap space and give back the measly amounts of salary that would have been paid to him to Chicago’s cap space. So Chicago’s cap space would still take a hit in the high 4M range in the retired years.

Posted by Praveen on 07/31/09 at 06:52 AM ET

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Regardless, what’s done is done - contracts can’t be renegotiated by either party to make it more amenable to the team to add other players anymore, and the player can’t ask for renegotiation if he signs a contract that then leaves him underpaid with respect to hsi current performance.

If it’s that much of a bother, I’m sure the teams will force it out of the next CBA - and the smarter GMs will then find another so-called loophole to hang onto the players they want to, and the less competent GMs will scream about being outsmarted again.

The same rules apply to everyone - if you, Mr. GM, can’t figure out how to use them to your advantage, maybe the CBA isn’t the problem.  Maybe it’s just you not being smart enough or competent enough to do an adequate job.

Posted by Baroque from Michigan on 07/31/09 at 07:02 AM ET

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There are different motivations for various rules, whether it be in professional sports, law, healthcare, whatever.  Rules have multiple standards to meet.  One is fairness, the even application of the rules to everyone.  Fairness alone, however, is inadequate for practically any rules system.  Because they are invented to obtain an objective.  If that objective is not met--or the degree to which they are not met--the rules have failed (or failed to that degree).

Thus, the argument that the rules apply the same to everyone, therefore they are good rules is pathetically weak.

In the case under consideration, the people responsible for putting the rules in place had some objectives.  Rumblings around the NHL show that people are beginning to realize that the current rules are failing in some important ways.  Hence, the whole issue with the Hossa contract.

Posted by Chris from Minnesota on 07/31/09 at 07:52 AM ET

Nathan's avatar

The Hawks are destined to be a laughing stock one way or another. Now that they’re good on the ice, I guess they feel they have to do stupid stuff off of it to hold up that reputation.

Posted by Nathan from Jonny Ericsson's ice cream truck on 07/31/09 at 07:54 AM ET

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Look, as a Wings fan I’d love to see all of the Chicago contracts blow up in their faces.  But is it really against the rules to discuss the rules?  The NHL agreed to these rules on how the cap applies to retiring players - how can it be a penalty to discuss them?

Besides, when the new CBA has to be negotiated, the NHL can change the rules, provided the NHLPA agrees.  There is no discussion of cap hit in the individual contract, just payment schedule.  If the new CBA dictates that it will count against the cap for the entire term, regardless of retirement, then teams like Chicago, Detroit, and others that have made these 10-12 year deals will be screwed.

Heck, if they really want to screw them they can change it from average contract amount as the cap hit to actual.

So this stuff is bull.

Posted by CJBear71 on 07/31/09 at 09:26 AM ET

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how can it be a penalty to discuss them?

Well, to sign a contract knowing full well that there is no intention of fulfulling it...that’s gotta be against the rules.  THAT’s why they’re saying there’s a problem specifically with the Hossa contract and not the Zetterberg or Franzen ones.

Having said that, there is zero question in my mind that it WAS discussed, but there’s also zero question in my mind that EVERYONE will say that it wasn’t discussed, and unless Dale Tallon or Stan Bowman or whoever is dumb enough to actually have been recorded saying “Yeah, we don’t care, he’s not going to play those last years.  Bwahahaha, we’ve cirvcumvented the cap! *sound of high fives going around the room* Screw that Bettman faggot, am I right guys?!?!”

then teams like Chicago, Detroit, and others that have made these 10-12 year deals will be screwed.

Except that if there are changes, there’s no way they can be retroactive to affect contracts signed under the current CBA, can they?  I can’t imagine the PA or the majority of the owners agreeing to that because LOTS of contracts are frontloaded or backloaded these days.  In fact, a quick scan through nhlnumbers.com shows that there’s not a single team in the league that doesn’t have a player with a contract that’s not front or backloaded (or...middleloaded...) at least somewhat.

Posted by Garth on 07/31/09 at 09:56 AM ET

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What kind of dumbass is Gary Bettman to allow such an obvious loophole? How tough is it to think of a clause where any team with such contracts will still take a cap hit minus the salaries not actually paid in cases of retirement? I actually thought such a clause existed until I read this article.

No wonder the NHL always seems to face financial problems and saddle us with awful ticket prices.

Posted by Praveen on 07/31/09 at 02:55 PM ET

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