Thursday, October 09, 2008

GMs get 'creative' to beat the cap
Two Stars take a trip to Oklahoma

There were some very, very interesting machinations going on the past 24 hours as NHL teams tried to squeeze under the $56.7-million salary cap, some of which received plenty of coverage — but a few you likely haven't yet heard of.

Dallas had perhaps the most interesting approach.

Without an AHL affiliate after ending their association with the Iowa Stars this off-season, Dallas nonetheless needs a place to send its youngsters who get demoted, and like other teams have done in the past, that will see them spread out across North America this season.

Yesterday, Mark Fistric and James Neal, two players who will start the season in the NHL, hopped a plane to Oklahoma City of the Central Hockey League, said 'how do you do' to the team there and headed right back to Big D.

If that's not the definition of insanity, I don't know what is.

The why behind what Dallas did is a bit trickier to sort out, but it starts with the collective bargaining agreement's long-term injury clause:
50.5 (c)(ii) Upper Limit.
(A) With the exception of the Bona-Fide Long-Term Injury/Illness Exception set forth in Section 50.10(d) below and the Performance Bonus Cushion set forth in Section 50.5(h) below, no Club shall at any point during a League Year be permitted to have an Averaged Club Salary that exceeds the Upper Limit of the Payroll Range.
There's no bonus cushion this year, so a LTI is the only way a team can exceed the cap. The Stars were lucky in that, with a high-paid veteran in Sergei Zubov injured, they have an exemption to use that helps keep players like Fistric and Neal with the big club.

So, while teams like Calgary were demoting players like Dustin Boyd who clearly deserved to make the team, Dallas sent its kids to pickup some frequent flier miles to get under the cap.

How does that work? Unfortunately, it beats me given I can find no provision in the CBA that would call for an Oklahoma sojourn in order for the long-term injury salary break to kick in. Dallas did need to move out bodies to get down to the 23-man limit and that may have played a role.

What is clear is that teams like Dallas, and Anaheim — which called up a player to create cap space (!) yesterday — are using capologists and are keeping pretty quiet about the whole situation. I imagine that, from the NHL's perspective, the less these manoeuvrings are in the news the better.

Adding to the absurdity is just how few dollars we're talking about in these situations.

Neal, for instance, will make just $822,000 this season, while Fistric is due only $789,00. The Ducks' recalling of backup to the backup goaltender David LeNeveu, who makes all of $600,000, was done in order to free up a large portion of the injured Brad Larsen's near league-minimum $535,000 contract.

Given where teams are at against the cap, those dollars are all important — and can mean the difference between someone like Boyd, or the Ducks' Bobby Ryan, playing in the AHL or on the team's second line a few days or weeks earlier.

The unfortunate part of all this is that (a) fans are jerked around and left in the dark as to why personnel moves are being made and, more importantly, (b) the best players simply aren't going to be in the NHL. More and more, it's a numbers game, and with NHL-calibre players like Kyle McLaren and Peter Schaefer headed to the minors, the cap crunch is diluting the league's depth.

Teams are not living with their mistakes. They're hiding them, any way they can.

Cap Central's on the case of where teams actually stand when it comes to squeezing under the cap, and by Chip McCreary's count, everyone's under.

Eleven teams are within just $750,000 of the cap, however, and that doesn't include the Stars given the big-time exemption Zubov's injury temporarily allows for. The average NHL team is currently at a $53-million cap hit — and that's factoring in clubs like Los Angeles, Atlanta and Nashville, which have more than $10-million in space.

We're going to see more bizarre manoeuvring before the season's up.

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At 3:44 a.m., October 09, 2008, Blogger The Puck Stops Here said...

A longterm injury exemption does not kick in until after the season begins. The team must be under the salary cap at the start of the season first. Dallas sends a couple players to the minors to be under the cap, then claims the long term injury exemption with Zubov and uses the free up money to call them back up.

At 5:26 a.m., October 09, 2008, Blogger Valerie said...

Neal, for instance, will make just $822,000 this season,

I wish I made just $822,000.

At 10:31 a.m., October 09, 2008, Blogger Dennis Prouse said...

If you think you are seeing some creative moves to get under the cap now, just wait until next year. If the recession delivers the hit to revenues many are expecting, the cap will shrink, leaving many teams in a horrible bind.

At 11:52 a.m., October 09, 2008, Blogger FAUX RUMORS said...

1) Dennis: Not only could revenues be falling from a recession though equality between the 2 currencies that helped bolster Canadian franchises the last few years may b eevaporating.
2) The US dollar was almost equal to its CN counter part a couple of months ago. as of this post its worth 0.88. If that trend continues we may see a significant decline in CN franchise income which some have written account for up to 1/3 of all NHL revenue

At 11:54 a.m., October 09, 2008, Blogger JL said...

In the Boyd case, he is the only roster player on a 2 way contract. They send him down, get under the salary cap for the start of the season, and no waivers to pass through.

This morning, the Flames filed for Long Term Injury for Warrener, and then recalled Boyd.

Boyd made the club, and with Warrener out at least 10 games that gives Sutter at least that long to move somebody.

At 1:15 p.m., October 09, 2008, Blogger Art Vandelay said...

What!? Market caps causing distortions and harming consumers?! We've never seen that before.

At 2:28 p.m., October 09, 2008, Blogger Unknown said...

A good percentage of 2008-09 league revenue is already locked in (season tickets, corporate sponsorship), so the lost revenue for this season will mostly come from teams with small STH bases and from (possibly) lower attendance in the playoffs. One could argue that the increases in STHs in DC and Chicago and ticket price increases in strong markets will offset some/most of the lost single-game ticket and weak market revenue league-wide. I predict that the salary cap in 2009-10 will be about the same as in 2008-09.

That said, in 2009-10 individual teams will face lower internal spending caps because the STH and corporate sponsorship base likely will be much smaller. The league-mandated salary cap will likely decrease (or not keep up with inflation) for the 2010-11 season.

At 4:37 a.m., October 10, 2008, Blogger Unknown said...

this will have a big impact real soon


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