Radio Hit: Mandatory Visors in the NHL

I join Lee Versage and Shawn Simpson to chat Family Ties, mandatory visors in the NHL and the Getzlaf signing.

Click here to listen.

TSN Article: Mandatory Visors

Marc Staal getting hit in the eye with a puck has once again sparked a discussion as to whether NHL players should wear visors.

The starting point for this discussion is whether the NHL can force players to wear visors.

Visit TSN's website here for my answer.

Radio Clip: O'Reilly, Pistorius & Bergevin

I join Steve Lloyd and Jason York at the Team 1200 to discuss Marc Bergevin's handling of the club's balance sheet, the O'Reilly situation and a Pistorius plea deal.

Click here to listen.

CBS Article: Canadiens GM Marc Bergevin Making Strides On Ice And Balance Sheet

I wrote an article for CBS entitled Canadiens GM Marc Bergevin Making Strides On Ice And Balance Sheet. Bergevin has cleared significant cap space with some shrewd moves, while not compromising the quality of the team.

Click here to read the article.

Next For Ryan O'Reilly: A Cut In Pay?

By Rory Johnston (@RnfJohnston)

When the Colorado Avalanche found out yesterday afternoon that RFA centre Ryan O’Reilly had signed an offer sheet with the Calgary Flames, they had 7 days to make a decision on whether to match the Flames’ offer. Instead, it took them only a few hours to decide they wanted to keep him.

Colorado has now secured O’Reilly’s services for the next two years, albeit at a salary that’s a fair bit higher than what they would have preferred. Another downside - they’ve gone without him for the first 19 games of the season and are sitting outside of a playoff spot.

The Flames’ offer came with a twist: the structure of the offer was carefully designed to make it less attractive for the Avalanche to match. It’s only a two-year deal, set up so that O’Reilly will make $6.5 million in 2013-14, and only $3.5 million this year ($2.5 million of which comes as a signing bonus). By jacking up the salary in year two, O’Reilly will be guaranteed a rich payday if the Avalanche want to retain him.

Why?

The structure of the Flames’ offer was meant to be a ‘Poison Pill’. The high second-year salary of $6.5 million will set the bar for future negotiations and salary arbitration such that O’Reilly may never be cheap again. That means that the Avs first year offer must be $6.5 million – subject to possible conditions.

So the Flames purposely torpedoed any long-term savings on the contract in an effort to make it a less attractive option for the Avalanche to match.

‘Poison Pill’ is a term I’m borrowing from NBA offer sheets, which use a different salary cap trick to make it hard to match offer sheets, but the concept is the same: it’s a contract term that could hurt whichever team signs the player, with the goal of keeping a team from matching an offer.

Some have noted that the higher salary in year two means that the qualifying offer necessary to keep O'Reilly will be a steep $6.5 million for 2014-15. Quite possible - but not the only option.

At the end of the 2013-14 season, O’Reilly will be a restricted free agent once again, and instead of tendering a qualifying offer, the Avalanche could file for ‘cut-down’ arbitration in the hopes that they can retain O'Reilly at a lower price than his $6.5 million 2013-14 salary. 'Cut-down' arbitration is a rarely-used CBA provision that allows teams to file for arbitration with the hopes of giving their player a pay cut of up to 15%. 

In 2012, the Vancouver Canucks filed for cut-down arbitration for Mason Raymond – and he settled with the team, agreeing to take a 14% pay cut after injuries had slowed down his performance.

In O’Reilly’s case, the 15% pay cut would be measured against his $6.5 million 2013-14 salary. So the lowest possible salary he could get at arbitration would be $5.525 million. Though it might be counter-intuitive to give a pay cut to a player on the rise, NHL salary arbitrators may look at other RFA-eligible players at similar age and experience levels and conclude that few players at O’Reilly’s age make as much money. 

There are no guarantees, though. Since the Mason Raymond case was settled before going to arbitration, O'Reilly would be a real test case for cut-down arbitration. It’s tough to know how that would unfold (if we get there). While there may be reasonable arguments justifying a drop from the qualifying offer, if O’Reilly has a reasonably good season in year two of his deal, it will probably be tough to get an arbitrator to cut his salary. Honoring the intent of the qualifying is the starting point and there will need to be good reason to move off that.

Why did the Avalanche match so quickly? Avs GM Greg Sherman had presumably given a lot of thought to this ahead of time, including making a decision on how high an offer he would match. Sherman was Colorado’s Assistant GM before graduating to the big job in 2009. In his previous role, he was the team’s lead contracts man, handling contract negotiations, a bit like the old role occupied by Leafs GM Dave Nonis. Sherman, no doubt, had the various possibilities (including, possibly, the option for cut-down arbitration) in mind well in advance before the offer sheet dropped.

These guys are generally prepared – we just don’t hear about it.

Flames: O'Reilly Waiver Issue Open To Interpretation

By Fraser Blair (@fmblair) & Eric Macramalla

Earlier today, Sportsnet.ca reporter Chris Johnston reported that Ryan O'Reilly, who signed an offer sheet with the Calgary Flames last night, would have had to clear waivers before he could play with the Flames this season.

Johnston wrote: 

"In a bizarre twist to an already unusual story, Sportsnet.ca has discovered that the Flames were not only in danger of losing 2013 first- and third-round draft picks as compensation if the Avs hadn’t matched the O’Reilly contract, but they also would likely have had to surrender the player before ever getting him in uniform.

That’s because O’Reilly would have needed to clear waivers before joining the team’s roster.

The unsigned forward spent part of the NHL lockout playing with his brother, Cal, for Magnitogorsk in Russia. According to Metallurg coach Paul Maurice and KHL spokesman Shawn McBride, he appeared in games on Jan. 21 and Jan. 23 – both after the shortened NHL schedule was back underway – which meant that waivers were required before O’Reilly could return to the NHL as a free agent midway through the season."

Johnston raises a very interesting point, the consequences of which would have been serious and embarrassing for the Flames and General Manager Jay Feaster.

Under the old CBA, Article 13.23 provided that any player who signed an NHL contract while he was playing overseas at the beginning of the NHL season had to clear waivers before playing with the Club with which he signed. You may recall that in December 2011, forward Antti Miettenen was signed out of the Finnish Elite League by the Tampa Bay Lightning. According to 13.23, the Lightning placed him on waivers and he was subsequently claimed by the Winnipeg Jets.

The old CBA would have required waivers for O'Reilly regardless of whether he signed with the Avalanche or another Club because O'Reilly played in two KHL games after the 2013 NHL season began.

However, since the old CBA expired and the new CBA has yet to be ratified, reference is had to the Memorandum of Understanding (MOU). On page 19 of the MOU (which is a summary of the terms that govern the relationship between the parties moving ahead until the new CBA is drafted), it states as follows:

 “All Players on a Club’s Reserve List and Restricted Free Agent List will be exempt from the application of CBA 13.23 Waivers in the case of a mid-season signing.”

So some have reasoned that this provision eliminates the need for a player to clear waivers if he is re-signing mid-season with his current club only.

However, there is the argument that the conditions for avoiding waivers are only limited to the following:

1) A player must be on “a” Club's Reserve List and Restricted Free Agent List, and;

2) He must sign a contract mid-season.

In other words, the language doesn't expressly provide that a player may only avoid waivers if he re-signs with the team that holds his rights (in this case the Avs). Instead, it states that so long as the player is on “a” Club's Reserve and Restricted Free Agent list, he will not be subject to waivers before playing, regardless of where he signs.

Put another way, the Flames likely interpreted the MOU to provide that O’Reilly being on the Avs reserve list makes him waiver exempt for all teams.

Articles 10 and 13 of the old CBA, the portions that govern offer sheets and waivers, are chalk full of references to the “Prior Club” (the Avalanche) and the “New Club.” (the Flames) This is significant because it shows that the NHL and the NHLPA have treated the Prior Club and the New Club differently in other provisions of the CBA.

So the MOU does not distinguish as to the club signing the player. So the language is such that the parties understood there would not be a distinction between the Prior and New Clubs in this regard.

This gives the Flames an arguable case that O’Reilly should not have been placed on waivers. Not surprisingly, the Flames have stated that their interpretation is not consistent with the League’s interpretation on this point. This is perhaps a strained argument since arguably the idea between the provision was to let current teams bring their players back post-lockout without a penalty. Still, the language utilized by the sides casts some doubt in its interpretation.

If the O’Reilly did indeed go on waivers, we may have seen the case go to arbitration by way of a Flames grievance. That would have been messy.

So it's fair to conclude that the Flames weren't totally out in left field on this one. Maybe Texas Leaguer area but not left field.

Finally, this issue will likely be cleared up in the final collective bargaining agreement, which we expect will be ratified soon. 

TSN Article: Pistorius - Jail Time, the Charges & Why It’s Not A Surprise He Was Released On Bail

I wrote an article for TSN explaining why we should not be surprised that Oscar Pistorius was granted bail earlier today. I also address his potential jail time, the charges, why the bail hearing is not the trial and the fact that this will not be a jury trial.

Click here to read the article.

Oscar Pistorius - Full Affidavit

Here is a full copy of the Oscar Pistorius affidavit, which is his account of what happened that night.

It was presented today at his bail hearing. Under South African criminal law, Pistorius needed to show exceptional circumstances warranting his release on bail given the gravity of the crime. However, his lawyers have argued that the crime is being too harshly categorized and for that reason the onus should not be on him to justify his release.

New NHL CBA: The Changing Salary Floor & The Disincentive To Dress Young Players

By Fraser Blair

One of the concepts that I wrote about in the first piece about the Tim Thomas trade was the salary cap’s Lower Level (the salary floor). Under the new CBA, the way teams will approach the Lower Level will be significantly different due to 2 changes in the operating structure of the payroll range system.

First, beginning in the 2014-2015 season the Upper and Lower Limits of the payroll range (the cap floor and the ceiling) will no longer be calculated using the current formula. The current formula adds or subtracts $8 million from the salary midpoint in order to determine the Lower and Upper Levels. The salary midpoint is determined by the following steps: (1) multiply hockey related revenue (HRR) by the player’s share; (2) subtract player benefits from (1); (3) divide the figure from (1) and (2) by the number of teams.

Midpoint = [(HRR*0.50)-Benefits] / 30 teams

Note: The previous formula also adjusted the midpoint upwards by 5% each season. The NHLPA CBA summary mentions a growth factor but doesn’t specify the amount.

Last season, the salary midpoint was roughly $56.3 million. As a result, the Upper Limit was $64.3 million and the Lower Limit $44.3 million.

The Upper and Lower Limits will still be calculated based on the cap midpoint under the new formula, but those figures will be determined by adding or subtracting 15% instead of $8 million.

Regarding the Lower Limit, the two systems would produce the same results if the salary midpoint were $53.33 million. At all midpoints below, $8 million exceeds 15%. Conversely, as the midpoint rises the cap floor is lower under the new formula than it would be under the previous system.

This appears to be a moderate victory for low revenue teams. Under the new CBA, the Lower Level will be lower than it would have been under the previous system. Furthermore, once the salary midpoint reaches $69 million, (likely between years 6 and 7 of the CBA assuming 5% revenue growth) the difference between the new and old formulas for calculating the Lower Level will be $2.35 million. That’s not an insignificant amount of money, though I’m sure the owners of the Florida Panthers and the New York Islanders would still tell you it’s too high. They may be right, but that’s not the point here.

Although the Lower Level won’t be increasing as much as it did in the past, the second change to the Lower Level system will make it harder for teams to reach the salary floor. According to the NHLPA summary, performance bonuses will no longer count in the calculation of a team’s Lower Level. This provision was featured for the first time in the NHLPA’s CBA proposal on October 17, 2012, and it’s not surprising that the players fought for it its inclusion.

Since 2005, Clubs have been able to offer performance bonuses to certain types of players. Performance bonuses are almost always offered to high draft picks and free agents who sign and Entry Level Contract (ELC). Under the old CBA, teams could offer up to $2.85 million in performance bonuses to players on their ELCs. Those bonuses counted towards the calculation of the Club’s Upper and Lower Level salary requirements but will no longer be counted towards the floor.

Performance bonuses were governed by Exhibit 5 to the previous CBA, and were broken down into two categories. The first category, Individual “A” Bonuses are linked to individual player accomplishments. There are nine categories of “A” Bonuses for forwards, ten for defencemen and eight for goalies. For skaters, the bonus categories include Ice time, goals, assists, points, points per game, plus-minus, blocked shots (defencemen only), selection to the All-Rookie team, selection to the NHL All-Star Game, NHL All-Star Game MVP. For goalies, in addition to the All-Rookie and All Star Game bonuses, the categories are Goals Against Average, Save Percentage, Wins and Shutouts.

The maximum value of any of these bonuses is $212,500, and a player cannot receive more than $850,000 in cumulative Individual “A” Bonuses. In other words, the ELC of a forward may contain $212,500 in bonuses for all nine categories, but if he hits on more than four, he’ll only receive $850,000.

The second category, Individual “B” Bonuses are bonuses payable in respect of League Wide Awards and Performance. The “B” Bonus categories are also listed in Exhibit 5 and the maximum value of any player’s “B” Bonuses in a single season cannot exceed $2 million. However, the CBA allows teams to negotiate the amounts payable individually with their players. For example, a most generous ELC will entitle the player to a $2 million bonus upon any of the following:

•   winning the Conn Smythe trophy

•   being named a 1st or 2nd Team All Star

•   finishing, 5th in balloting for the Hart, Norris, Selke, Richard or Vezina,

•   finishing 10th in scoring and/or

•   finishing 10th in points per game

***Note: Individual “B” bonuses in respect of winning the Calder Trophy ($212,500) and the Lady Byng ($150,000) are also permitted, but Clubs may not negotiate bonuses in excess of the stated amounts.

The bonus requirements can and likely are more strenuous for most players, although players like Justin Schultz who signed their ELCs as UFAs and players with a realistic chance of playing in the KHL may have enough leverage to negotiate better bonus packages. Even at the most generous end, it seems highly unlikely that a player on his ELC would reach the full value of his Individual “B” Bonus ceiling in each of his first three seasons.

I spoke with prominent player agent Andrew Scott of Octagon and he corroborated this theory for me. Mr. Scott told me that outside of the elite young players (think Sydney Crosby, Evgeni Malkin and Alexander Ovechkin), players on their ELC do not obtain the full value of their performance bonuses.

Given this, it’s safe to say that Clubs in need of reaching the Lower Level were able to gain a financial advantage under the old rules by, at least in part, writing large and unreachable performance bonuses into their ELCs.

For example, let’s take the case of Ryan Nugent-Hopkins of the Edmonton Oilers. Nugent-Hopkins received the full range of Individual “A” and “B” bonuses and we’ll assume for the sake or erring on the conservative side that he obtained the full permissible bonus for each category. We’ll consider the Individual “A” bonuses first.

Ryan Nugent-Hopkins: 2012 Statistics

Games	Goals	Assists	PPG	+/-	ATOI/EDM Forwards	All Rookie	All Star	All Star MVP
62	18	34	0.84	-3	4th	Yes	Yes	No

Nugent-Hopkins qualified for the PPG bonus, the ice time bonus, the All Rookie Bonus and the All Star Bonus. As a result, the maximum he would have received in Individual “A” bonuses last season was $850,000 As a result of not scoring 20 goals, notching 35 assists, finishing amongst the top-3 forwards in plus/minus or winning the MVP of the All Star game, Nugent-Hopkins did not qualify for those bonuses.

Turning to the Individual “B” bonuses, Nugent-Hopkins won the Calder Trophy and we’ll assume that the Oilers paid him a bonus of $212,500 for that trophy. He did not qualify for any of the other “B” bonus categories.

In sum, the most Nugent-Hopkins could have earned from Individual “A” and “B” bonuses in 2012 was $1,062,500. When we add in his salary ($925,000) and his signing bonus ($92,500), we get a maximum total value of $2,080,000. That figure is $1,695,000 below his cap hit.

This is already getting to be a long piece, so I’m not going to go through the other Oilers currently playing under ELCs (though it’s important to note that Jordan Eberle likely qualified for all of his $312,500 performance bonus money). However, it would appear to be the case that outside of the elite players alluded to by Mr. Scott, players on their ELCs do not hit on the full range of available performance bonuses.

With each of the last three first overall picks and Justin Schultz on their roster, the Oilers are probably the extreme end of the bonus spectrum. But the point here is that some teams have been able to gain a financial advantage through the performance bonus system by tying largely unreachable bonuses to ELCs.

Looking ahead to next year, the Edmonton Oilers’ cap hit of $44.5 million contains about $8.5 million for performance bonuses. With at least 7 roster spots to fill, the Oilers won’t have trouble reaching the floor.

The New York Islanders, on the other hand, will be an interesting club to monitor next season. With $29 million committed to 12 players, the Islanders will have to spread the remaining $15 million amongst the 9 (or so) roster spots available. Again, it’s not that this amount will be difficult to fill, but they won’t be able to rely on their prospects to carry the cap load the way the Oilers have in the past. Under the old rules, the cap hits of several near-NHL ready prospects like Griffin Reinhart (bonus: $2.35M), Brock Nelson (bonus: $1.925M), Nino Neiderreiter (bonus: $1.925M), Ryan Strome (bonus: $850,000) Mike Halmo (bonus: $850,000) and Calvin de Haan (bonus: $600,000), would have totaled $13.8 million. Under the new regime, the maximum value of those players relative to the Lower Level is only $5.3 million.

General Manager Garth Snow will have to walk the difficult line of ensuring a sound development for his Club’s prospects and making sure he reaches the floor. Perhaps this indicates that the trade for Tim Thomas was made for the purpose of reaching next season’s Lower Level. f Snow can slide Thomas’ contract to next season because of his suspension (which he will likely try to do) and avoid an NHLPA grievance for cap circumvention (which will form the subject of Part 2 of my Tim Thomas series), then he’s a lot closer to the Lower Level.

In conclusion, this is a bad provision for the fans who will have to wait longer in some cases to see their team’s top prospects wear an NHL uniform. There just isn’t the same business (non-hockey) incentive for floor teams to dress their young players as there used to be. 

On the other hand, this was a really shrewd inclusion by the NHLPA. The likely result is that floor teams will have to spend more money on veteran players in order to reach the lower limit.

Part 1 - Tim Thomas Trade: Circumvention of CBA?

By Fraser Blair

(Part 1 of 2 Part analysis the Tim Thomas trade. Part 1 examines the trade itself. Part 2 will examine the possibility of a circumvention grievance if Thomas’ contract slides into the 2013-2014). 

The trade of Tim Thomas is perhaps the most interesting trade from a non-hockey perspective since the implementation of the salary cap in 2005. This trade has absolutely nothing to do with on-ice affairs of the Boston Bruins or the New York Islanders but has everything to do with the NHL’s ever-rising Lower Limit salary threshold (or salary floor). 

Getting to the Lower Limit is increasingly difficult for low revenue teams and in recent years, some of these teams have taken creative approaches to minimize the financial implications of reaching the floor. GM Garth Snow and the New York Islanders took the creativity to a new level yesterday by acquiring the suspended Thomas from the Boston Bruins in exchange for a conditional 2nd round pick in 2014 or 2015. The pick will go to Boston if Thomas plays in at least one game for the Islanders or a team he's traded to. 

Since he's suspended, Thomas hasn't been paid by Boston and his contract did not count against the Bruins’ Upper Limit calculation. However, Section 50(10)(c) of the CBA required the Bruins to maintain enough cap space to accommodate Thomas in the event that he returned. It reads: 

“For Players that are suspended, either by a Club or by the League, the Player Salary and Bonuses that are not paid to such Players shall not count against a Club’s Upper Limit or against the Players’ Share for the duration of the suspension, but the Club must have Payroll Room for such Player’s Player Salary and Bonuses in order for such Player to be able to return to Play for the Club.” 

So the Bruins have been forced to keep their salary cap commitments $5 million below the Upper Limit because of Thomas even though his salary doesn't technically count towards the salary cap. It’s a subtle but important distinction that becomes relevant when we assess the different implications of this trade for the Islanders. Put another way, if Thomas’ cap hit won’t technically count towards New York’s Upper Limit, how does it help that team reach the Lower Limit? 

Well, the inclusion of the term “Upper Limit” and the exclusion of the term “Lower Limit” in Section 50 would seem to allow Thomas’ cap hit to count towards the floor but not the top end of the cap. In other words, Thomas’ cap hit counts towards the team’s Lower Limit but not its Upper Limit. Convenient for both the Bruins and Isles.

This seems a bit strange. It would be interesting to see the outcome of a grievance initiated by the NHLPA on the basis that the same rules should apply to the calculation of a Club’s Upper Limit as they do to a Club’s Lower Limit. 

Here's the NHLPA's argument: You can’t reach the Upper Limit until you cross the Lower Limit, and therefore the same rules that apply in determining whether a Club has complied with the Upper Limit should apply in determining whether a Club has complied with the Lower Limit. By extension, the Thomas’ cap hit should not count towards the Islanders’ Lower Limit because the CBA does not count it towards the Upper Limit.  

That reasoning works - but the issue is the language of the CBA is probably determinative of this question. It seems that the specific inclusion/exclusion of the words Upper/Lower Limit was intentional and designed to enable Clubs near the Lower Limit to take advantage of this strange rule that counts cap hits like Thomas’ on one hand (in determining whether the Club has reached the Lower Limit) but not the other (in determining whether the Club has breached the Upper Limit). The language is clear and if the agreement favoured the NHLPA’s logic, it would have been written differently.

Although the Islanders appear to be trade appears to be one designed to avoid spending money, a circumvention grievance pursuant to Section 26 is unlikely to be successful for two reasons.  

First, whether the circumvention rules apply to a trade is questionable. The spirit of the Section 26 is directed towards Circumvention in player contracting. The language is written in a way that would certainly allow for argument, but this argument would be highly technical and formalistic.  

Secondly, even if Section 26 did apply the Islanders haven’t committed Circumvention. As Eric Duhatschek pointedout today’s Globe and Mail, the Islanders had already reached the Lower Level by the time they acquired Thomas yesterday. Lubomir Visnovsky’s return to the Club earlier this week put the Islanders above the Lower Level. In this regard, the Club showed some savviness and may have protected against a grievance by not using Tim Thomas to get to the salary floor. 

TSN Radio Clip: A-Rod, Braun, Melky, Lance & PEDs

I joined Scott MacCarthur at TSN Radio. We talked Alex Rodriguez, Melky Cabrera, Lance Armstrong, Barry Bonds, Roger Clemens and PEDs.

I got all riled up. And justifiably so.

I got angry just writing this entry.

Click here to listen.

CTV National News Clip: Lance Armstrong & Possibility of Criminal Charges

I join Jennifer Burke at CTV National News to discuss the possibility of criminal charges materializing against Lance Armstrong.

Lance is going to be busy on the legal side for a while.

Click here to watch.

Why P.K. Subban Is Not Underpaid & Why He Got A Good Deal

by Fraser Blair

Restricted Free Agent (RFA) P.K. Subban and the Montreal Canadiens recently agreed to a 2 year $5.75 million contract, and the consensus is that the Habs ‘won’ the deal. Subban was reportedly seeking a 5 or 6 year contract worth an average north of $5 million. It is therefore easy to see how many could view the actual deal as a significant bargain for the Club. 

But I’m not convinced. Before I justify my position, I need to explain how the market for RFAs operates. 

The Collective Bargaining Agreement that governed the market for NHL players between 2005 and 2012 dramatically changed the market for RFAs. The last agreement (as will the new agreement) allowed players to qualify for unrestricted free agency after 7 NHL seasons. Prior to 2004, players could only qualify for UFA status following 10 seasons in the NHL. The major consequence of this new system was an increase in the number, value and length of long-term contracts handed out to players after the completion of their Entry-Level Contracts (ELCs). 

Many of these contracts consumed the entirety of a player’s RFA years as well as a number of his first years of UFA eligibility. For example, Erik Karlsson’s 7 year $45.5 million contract with the Ottawa Senators covered all four of his RFA years as well as first three UFA seasons. Tyler Myers’ 7 year $38.5 million deal with the Buffalo Sabres did the same.

The annual average value (AAV) of these two contracts takes account for the player’s value at several stages of his career: his four individual seasons as an RFA and the block of UFA seasons. As a result, the AAV doesn’t accurately gauge the player’s market value in any respective seven seasons, especially not his value during his first two seasons as an RFA. 

So if we’re going to determine whether or not Subban is underpaid under this current deal, we can’t look at the RFA-UFA extensions. Rather, we have to compare the AAV of Subban’s contract to the AAV of similar contracts signed by similar players. 

In determining who and what was similar, I limited my search to defencemen who signed two year contracts covering the two seasons immediately following the expiration of their ELCs. For the purposes of ensuring salary cap neutrality, I restricted my focus to contracts signed after 2010, when the upper limit was $59.6 million. 

Here are the top 5 most expensive contracts of this type by AAV. Subban’s contract tops the list: 

P.K. Subban (Montreal Canadiens): 2 years/$5.75M ($2.875 AAV) 

Erik Johnson (St. Louis Blues): 2 years/$5.2M ($2.6 AAV)

Michael Del Zotto (New York Rangers): 2 years/$5.1M ($2.55 AAV)

Dimitri Kulikov (Florida Panthers): 2 years/$5M ($2.5 AAV)

Zach Bogosian (Winnipeg Jets): 2 years/$5M ($2.5 AAV)

Even if you think that Subban’s the best player in this class (hint: he is, both by advanced and conventional metrics), he’s still the highest paid player on that list by a significant margin (10% is a big difference). 

Furthermore, the backloaded nature of his contract also insures that Subban will receive a qualifying offer of $3.75M for the 2014-2015 season. No other player in this class was accorded that benefit to that degree. (Players making over $1 million must be offered 100 percent when made qualifying offer).

In conclusion, these players show the two-year value of a top-4 defenceman following the expiration of his ELC. Based on the salaries of these players, it appears that Subban has been paid fairly relative to his peers. He’s receiving more money than any other defenceman in recent history on a 2 year contract following his ELC. The structure of the deal also ensures a healthy salary for the 2014-2015 season. 

New NHL CBA: Could We See Sign-And-Trade?

by Fraser Mackinnon Blair (@fmblair)

Although the NHL season has only just begun, some are already looking forward to seeing how the new CBA will effect this summer’s free agent period.

We know that one of the NHL’s main requirements for the new CBA was a term limit on player contracts. The NHL and the NHLPA agreed to impose a general contract limit of 7 years, with the exception that a team may re-sign its own player to an 8 year contract. The rule is there to give teams an advantage in negotiating contracts with their home-grown stars.

However, it’s possible that the contract limits add an additional layer to the new CBA: the sign and trade. The sign and trade is very popular in the NBA. Not so long ago, both Lebron James and Chris Bosh were acquired by the Miami Heat via the ‘sign and trade.’ 

A sign and trade occurs where a pending free agent signs an extension with his current team on the understanding that he will be immediately traded to another team. It became popular in the NBA as the rules allowed a free agent to sign a longer and more expensive contract extension with his current team than he could with another team.

It made sense for the Cleveland Cavaliers to entertain the possibility of a sign and trade when they knew that LeBron James was going to sign with another team and that they were otherwise going to lose him for nothing. Given that there were many teams interested in James, including the New York Knicks, the Cavaliers were able to obtain a couple of draft picks from the Miami Heat in exchange for their superstar. A small pittance, but a pittance nonetheless.

Let’s take this back to the NHL.

Corey Perry and Ryan Getzlaf of the Anaheim Ducks headline the list of potential unrestricted free agents this summer. At 27 years old, Perry and Getzlaf are likely to receive a maximum length contract, whether they sign with the Ducks or elsewhere. The question is whether another team (say the Leafs) would approach the Ducks with a sign and trade offer.

Assuming that Perry or Getzlaf will not re-sign in Anaheim and are happy to play for Toronto, then the sign and trade is a win for all sides. The players get their 8 year contracts and move to a preferred location. The Leafs get their players and the Ducks get some form of compensation.

But not so fast.

 

According to the Summary of the CBA that has been posted on the NHLPA’s website (we’re using a summary because the final document hasn’t been completed), a team’s 8-year rights cannot be ‘traded’ after the trade deadline of the previous season. As a result, the Leafs could not trade for the rights of Perry/Getzlaf during the exclusive negotiating period between the end of the season and July 1st and subsequently sign the players to 8-year contracts.

In addition, the 8 year contract rights in the case of a UFA expire on July 1st. So such a deal would have to be constituted between the end of the season and the beginning of free agency. By design, this is also the period during which teams have exclusive negotiating windows with their pending UFAs.

So what does this all mean?

The sign and trade in the NBA has created this weird situation where the new (Heat/Leafs) team negotiates with the player (James/Bosh/Perry/Getzlaf) through the old team (Cavaliers/Raptors/Ducks). This may look like tampering, but the fact that it has gone on for this long in the NBA suggests otherwise.

This also seems like a blatant circumvention of the CBA but the summarized CBA doesn’t speak directly to whether the sign and trade is forbidden. Given (1) this silence, (2) the known history of the sign and trade in the NBA and (3) the fact that the same law firm (Proskauer Rose) has handled the CBAs of both leagues, the presumption would likely be that they are allowed.

At this point we don’t know for sure, but I expect that savvy teams with pending UFAs will reach out to potential suitors for their UFAs, and potential suitors will look to get a jump on their competitors prior to July 1st. The end result will be fewer UFAs available at-large on July 1st.

Of course, this could all be meaningless if the final CBA outlaws these maneuvers. But at this point it appears that the sign and trade will be allowed and will impact the way teams approach free agency.

TSN SportsCentre Hit: Me & Bruce Arthur Chat Lance Armstrong with Dan O'Toole

I appeared on TSN's SportsCentre last night after the big Oprah-Lance interview. I talked about the legal side, and why Lance did what he needed to do on the criminal side.

After the clip, I surprised the whole TSN staff with new cars. Everyone screamed.

Click here to watch the clip.

TSN Article: Lance Armstrong Interview & the Key to the Interview

I wrote an article late last night on the Lance Armstrong-Oprah Winfrey interview. I didn't write about Stedman, but I kept coming back to him in my mind. Not sure why. 

In my article I address the most important part of the interview and what it was critical for Lance to get it right. And he did.

Click here to read the article.

TSN Article: Gomez/Redden Deal - Less Courtesy, More Concession In New Buyouts

I wrote an article for TSN about the new buyout rules. This follows the Habs sending Scott Gomez home without pay. Were the Habs really doing Gomez a favour by letting find a place to play this season?

The article is entitled Less Courtesy, More Concession In New Buyouts and can be found here.

CTV National News: Sandie & I Chat Lance Armstrong

I joined Sandie Renaldo at CTV National News today to talk about Lance Armstrong, his Oprah confession and the impact of his admission on his legal struggles.

Click here to watch.

CBS Article: Scott Gomez expulsion - Grounds for NHLPA grievance?

I wrote an article for CBS Sports entitled Scott Gomez expulsion: Grounds for NHLPA grievance?. This is on the heels of the Canadiens sending Gomez home with pay to preserve their option to buy him out next season.

Could this lead to a grievance being filed by the NHLPA?

Click here to read the article.

Interview with Former NHLPA Head Paul Kelly

Lats night on my radio show Offside, we interviewed Paul Kelly, the former head of the NHLPA. As is always the case with Paul, the interview was very well received. He provided tremendous and unique insight on the CBA talks.

Paul has been a lawyer for over 30 years. He was selected by his peers as one of the top 100 Super Lawyers in Massachusetts. Paul is a Partner at the law firm Jackson Lewis LLP.

In the past, Paul has represented and performed legal services for the Boston Red Sox, Marty McSorley (then of the Boston Bruins), Bobby Orr and Terry O’Reilly. Paul is currently involved in sports-related matters on behalf of Penn State University, Harvard University, the LPGA and the KHL.

Click here to listen to the interview. If you have been following the NHL lockout, this is a must listen.

Canadiens Have No Choice But To Part Ways With Gomez

In 38 games last season, Montreal Canadiens forward Scott Gomez scored recorded 2 goals and 9 assists for 11 points. The season before, Gomez scored 7 goals and ended the season with 38 points over 80 games.

In light of the new CBA, what are the chances that Gomez will still be a Hab when his current contract expires after the 2013-14 season?

None. Zero. Zip. Just Not going to happen.

Let’s look at his contract. He has about 1.5 years left on a deal that will pay him $5.5 million this season and $4.5 million next season. The cap hit, which is key, will remain $7.357 million – what it’s been all along. Remember the cap hit is the average yearly value of a contract and not what a player makes that year.

Here’s the problem. The salary cap for the 2013-14 season will be $64.3 million per team. Next season, the Canadiens already have about $60.2 million allocated to 16 players. There are 23 roster spots on a team. So if they keep Gomez, they will only have $4.1 million to sign 7 players. That's a problem.

As well the minimum salary for 2012-2013 is already at $525,000. When you divide $4.1 million across 7 players, that's $585,000 per player. Problem two.

Oh yes – the Canadiens haven’t signed P.K. Subban yet. Meet problem three.

So if even the Canadiens believe that Gomez has value in a new system coached by Michel Therrien, the team simply cannot afford to dedicate $7.357 million dollars of cap space to Gomez. It is not only impractical, but given the math, it’s just not feasible. This is not to diminish Gomez. He is a tremendously talented hockey player and great in the room. Problem is his price tag is just too high.

So what to do with the Gomez contract?

First what they can’t do: bury his contract in the minors a la Wade Redden. Under the terms of the new CBA, his contract would still count against the cap.

So now on to what they can do: (1) buy him out, or (2) trade him.

Under the terms of the new CBA, teams will be provided with two amnesty buyouts. This will allow a team to buyout a player and not have his salary count against the cap. This is new. Under the old CBA, the buyout amount counted against a team’s salary cap.

So the Canadiens could apply one of these amnesty buyouts to the Gomez contract. That will happen unless the Canadiens can trade him to another team.

A trade is not out of the question. In 2013-14, at $4.5. million Gomez will be paid about $2.86 million less than his cap hit of $7.357. Low payroll teams that need to make the salary cap floor could find Gomez to be an attractive option since they would be paying him less than his cap hit. That means they would enjoy a net gain on his salary. As it stands now, there are 11 teams below the $44 million cap floor for 2013-14. So certain teams may see value in acquiring Gomez.

So it looks like Gomez's days with the Montreal Canadiens are numbered.

TSN Radio Clip: The End of the NHL Lockout

I joined Jim Tatti at TSN Radio Toronto in between NFL games to talk about the end of the NHL lockout and the shrinking NHL middle class.

Click here to listen.

CTV National News Clip: NHL Lockout Is Over

I join CTV National News to talk the end of the NHL lockout.

Click here to watch.

TSN Television: We Talk NHL Lockout & Disclaimer

I joined Cory Woron on TSN's SportsCentre to talk NHL lockout and the NHLPA's authority to disclaim and/or blow itself up.

Click here to watch.

CTV National News: D-Day for the NHL

I appeared on CTV National News to discuss the possibility of the NHLPA disclaiming interest today and things subsequently falling apart.

Click here to watch.

CTV National News: NHL Lockout Talk

I join CTV National News to talk the latest on the NHL lockout.

Click here to watch.

TSN Radio Clip: NHL Lockout & What's Next

I joined Jim Tatti at TSN Radio Toronto to chat NHL lockout, the disclaimer and what's next.

Jim got me all riled up.

Click here to listen.

Team 1260: NHL Breakdown with Jason Gregor

I joined Jason Gregor today on the Team 1260. We talked about all that broke on the NHL front today, including the disclaimer re-vote and the NHLPA response to the lawsuit.

Here's a link to that discussion.

NHLPA Response to NHL Lawsuit: Please Punt

Special contribution by Jacob Zelmanovitz, Lawyer - @lawjz

Well it’s happened again, the lawyers have muddied the already murky lockout waters some more, and the PA’s attorneys have filed a motion with the Manhattan court today asking that it throw out the League’s lawsuit.  The timing of the motion is interesting, coming the day after the union’s executive committee's authority to disclaim had lapsed, but more on that later.

The motion essentially makes two arguments, (1) that the league’s lawsuit was filed prematurely and (2) it is an improper attempt to win the race to the courthouse. 

On that first point, the union makes the obvious arguments – it hasn’t disclaimed yet, and it may not disclaim.  Courts cannot pass judgment on hypothetical questions; it’s like asking a boxing judge to decide now who’d win in a fight between Manny Pacquiao and Floyd Mayweather. 

As the legal brief says, there are too many ‘ifs’ in the league’s complaint:  The league wants to court to decide what happens if a majority of the players vote to authorize the NHLPA to disclaim, and if the NHLPA decides to exercise such authority, and if individual players decide to then sue the NHL under the antitrust laws, and if those players ask that the lockout be declared illegal. 

And here’s where the timing of this motion come to play: while the first of those ifs did happen – the majority of the players did vote to authorize the NHLPA to disclaim – none of the others have.  Furthermore, the union argues, there must be a non-hypothetical question at the time the lawsuit was commenced.  Recall that the lawsuit was filed shortly after we learned that the union was going to vote on disclaimer, but before the voting was anywhere near done.  And now, on January 3, 2013, we know that this vote was a false alarm, and the union did not disclaim.  So, the union argues, the point is moot and why bother with this lawsuit? 

Now that last rhetorical question has an easy answer, and it leads to the second argument mentioned above, that this is all a ploy by the league to get the case heard in a court thought to be more sympathetic to the owners.  Essentially, the union is saying that in the race to the courthouse, the League cheated and took a head start.

This reads to me as a play to judges’ frequent distaste for these races to the courthouse, or "forum shopping" as attorneys call it.  By timing this right, the union has shown that the main 'threat' that the league relied on, the union’s vote to authorize disclaimer, was not really a threat, as nothing came of it.  Now that such a vote, the first of the 'ifs' listed above, has been shown to be meaningless in the conflict between the NHL and the union, the union might now better argue that the second 'if', actual disclaimer, is similarly inconsequential, and so not deserving of the court's attention.  In fact, they will likely argue that the only time a court should intervene is if and when the last of those 'ifs' happen and a player tries to have the lockout declared illegal by filing a lawsuit.  

Copy of NHLPA Request to Have NHL Lawsuit Punted

Today the NHLPA filed its response to the NHL's lawsuit, where the league asked the Court to declare the lockout valid if the NHLPA dissolved. As well, the NHL wanted the Court to declare that the player contracts were all void if the NHLPA dissolved.

Here's a copy of the NHLPA's response.

CTV National News: About Last Night

I jumped on CTV National News today and talked about last night's very riveting NHL evening.

Would the NHLPA disclaim?

Well, the Union didn't dissolve. What does that mean?

Click here to watch.

TSN Article: Up Against A Deadline - Time for the NHLPA to Disclaim?

I wrote an article for TSN today entitled Up Against A Deadline - Time For NHLPA To Disclaim?.

To read the article, click here.

CTV National News: I talk NHL Lockout

I joined CTV National News today to talk NHL lockout and the disclaimer of interest looming over these talks.

Click here to watch the clip.

ESPN Article: Burnside and I Chat NHL Lockout & Disclaimer

I was interviewed last night by ESPN's Scott Burnside. We chatted about a possible disclaimer of interest and what it means.

Click here to read the article.

TSN Radio Clip: January 2 & What It Means

I joined Scott MaCarthur today on TSN Radio in Toronto talk NHL lockout. We addressed today's  NHLPA disclaimer deadline and what it means. 

Are we close to settlement?

Click here to listen.

TSN Article: NHLPA Votes to Dissolve - What's Fehr's Next Move?

I wrote an article for TSN entitled, "NHLPA Has Authority To Dissolve - What's Next?". 

The players have voted to grant Donald Fehr the authority to dissolve the NHLPA. 

The question now is what does the NHLPA do? 

It's their move.

Click here to read the article.

Your Say Through Twitter: Will You Come Back To NHL Hockey?

I asked people on Twitter if they would come back to NHL hockey when play resumes. Here are some of the responses: