Talk about opening Pandora’s Box.
Amid the uncertainty brought on by a paused NHL season, I thought it would be helpful to call on a salary cap expert to address the most critical unanswered questions facing the league while navigating this new frontier.
The founder of CapFriendly.com, Dominik, was more than happy to oblige the request, but little did I realize how deep the questions ran: He came up with more than 80 of them spanning 36 different topics.
For the sake of brevity, I’ve boiled those down into 10 identifiable issues brought on by the paused season and provided some thoughts from CapFriendly on why each is significant.
Consider it a window into the variables every front office is dealing with right now. The NHL has conducted a series of calls with team owners, presidents and general managers since the novel coronavirus halted play on March 12, but it hasn’t yet been able to provide much clarity on many of the issues raised here:
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Salary Cap
Questions:
How will the pause affect the 2020-21 cap? How will a possible lost season and playoffs affect the 2020-21 cap? When did the NHL stop its cap counting process for 2019-20 and what happens to that if play doesn’t resume?
Background:
Top league officials have already indicated that the cap can be set at any number in conjunction with the NHL Players’ Association, so there’s no reason to expect a year-over-year drop. But the league is facing a loss of revenues ranging from $1 billion to $1.2 billion if this season is completely lost. And how the books get closed on 2019-20 — or reopened, if play resumes — is still an open question.
@CapFriendly’s two cents:
If the NHL halts the cap counting as of March 12, which is the day that the season was paused, or as of March 16, when the rosters were frozen, this will have an impact on the team’s final cap hit number. This final number will dictate a series of other components that affect the following year’s salary cap. One such example is performance bonus overage penalties. Those are incurred when the performance bonuses earned by players result in the team exceeding the upper limit. The amount that exceeds the limit is applied against the club as a penalty in the following season. Another impact will be how clubs calculate the reduced rate for players on two-way contracts who start next season on IR.
On the note of performance bonuses, we have to wonder how a shortened season would impact performance bonuses that are game related. For example, certain bonuses only qualify if the player plays in 42 NHL games. What occurs if the player was at 39, but was on the team’s roster and would have met the bonus thresholds if the season wasn’t halted?
Also, if clubs stopped counting, will that impact a teams’ ability to recall players if there is a shortened end to the season? If they decide to start counting again just for those few days, how much cap space is the league going to give them and will it hinder a team’s ability to make roster adjustments or activate players off LTIR?
Trades
Questions:
How will a lost season impact a club that dealt for a player on an expiring contract at the deadline? How will a shortened or lost season impact a trade that has conditions or clauses in it?
Background:
This is a spicy meatball. There are notable trade conditions in last summer’s Milan Lucic-for-James Neal swap and the J.T. Miller deal to Vancouver, but what about the trades made before the deadline? The Canucks gave up future assets for Tyler Toffoli and only got 10 (productive) games out of him. The Carolina Hurricanes traded a conditional draft pick for Sami Vatanen and didn’t see him play one. Even the Arizona Coyotes, with their December acquisition of Taylor Hall, have to feel burned by not getting to lean on the former Hart Trophy winner during the stretch drive and playoffs. The list goes on and on, too.
@CapFriendly’s two cents:
The most interesting cases for me are the clubs that gave up significant assets in a trade for a player on an expiring contract intended for a playoff run. The league can’t give that player back or revert the trade if the season is cancelled because he’s on an expiring contract. Is it ‘too bad so sad’ in those cases? As for trade conditions, in deals where it’s the higher of whichever pick, my guess is that the league will have to use whatever they decide on for the draft lottery and the final standings order. A tricky case will be how to deal with conditions that revolve around a team making the playoffs, or the player needing to play a certain number of games with his new club. We will have to wait and see what is decided for those.
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Injuries
Questions:
What status will players who are injured during the pause be given when the league resumes?
Background:
At issue in the dispute between the Winnipeg Jets and Dustin Byfuglien this season was where and when he was hurt. Byfuglien was given a clean bill of health by the team during the year-end physical last spring and then didn’t report to training camp before having ankle surgery in the fall. The Jets ultimately didn’t have to pay him because teams aren’t on the hook to honour a contract for injuries that don’t occur on their watch. While the current pause is a different situation entirely, it could raise similar questions: Players are technically still in-season and almost certainly weren’t given physicals before spreading out across North America and Europe. What if someone gets injured during the time away?
@CapFriendly’s two cents:
Recently I watched a video on social media of an NHL player running with his daughter up a hill: What would happen if he rolls his ankle and breaks it? The Byfuglien situation from the beginning of this season crossed my mind. When the NHL returns and he’s injured, what status will the league deem him as, since he was injured in a non-hockey related incident at a time that there was no hockey. From a club perspective, are they within their right not to pay him?
Draft/Draft Lottery
Questions:
Will the league use points percentage to establish the draft order if the season isn’t completed? Will the draft lottery be expanded to all clubs? Would the league consider extending the ‘must-sign-by dates’ for the 2020 draft class to give teams more time to evaluate their prospects?
Background:
The last time every team had a chance at the No. 1 overall pick was following the cancellation of the 2004-05 season due to a lockout, and the prize that year was Sidney Crosby. How the Alexis Lafreniere draft lottery looks in 2020 won’t be determined until the NHL knows if it will be able to conduct a playoffs or not. In the meantime, teams are now left to finalize their draft lists without the benefit of being able to scout playoff games or get a final look at players of interest.
@CapFriendly’s two cents:
Development can change rapidly with prospects. A team may have intended to further scout a player that they had on their scouting draft board at No. 70 in January or February but didn’t get the opportunity to go back and get a final look in March or April – something that will surely challenge their final draft order. For that reason I wonder if the league might consider changing the “must-sign-by dates.” Teams have a lot of data and information, but will the league offer them any concessions by giving them a little more time to evaluate a player drafted in 2020 before they have to make a decision on whether or not to sign him?
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Expiring Contracts
Questions:
If the season extends into the summer, how will player contracts be handled? What assurances can be given to those on expiring deals?
Background:
The NHL’s new fiscal year starts July 1 so any contracts due to expire after this season currently only run through June 30. But if the playoffs are held in July and August …
@CapFriendly’s two cents:
Let’s say a player has five years left on his deal, in that situation he likely doesn’t care about the July 1 situation because he’s under contract well past that date. However, for players on an expiring contract, if I were in their shoes the first question I’d want to know is if I’m still insured, and what happens if I’m involved in a career-ending injury? Could we get a situation where a player tells the club ‘I’m not playing the shortened season and I’m not playing these playoffs until such time as I have a new contract and the assurances that come with it’?
NMC/NTC
Question:
How will the league handle players with trade clauses in their contracts that either begin or change on July 1, 2020 if the season extends beyond that point?
Background:
There are a number of guys who fall into this category. Some quick examples: Alex Killorn is scheduled to see his full no-trade clause revert to a 16-team no-trade list, Alexander Radulov will have his no-movement clause turn into a 15-team no-trade list and Sean Monahan is set to gain a 10-team no-trade list. Would those changes still go into effect before the start of the coming off-season?
@CapFriendly’s two cents:
Tampa was a club that jumped out at me because it’s going to be another off-season where it will again have to make some tough decisions and possibility part ways with players such as Killorn in order to free up the cap space needed to sign restricted free agents Mikhail Sergachev and Anthony Cirelli. But what happens if the league extends the 2019-20 season into August or early September? Will clauses like the one in Killorn’s contract get extended as well? If so, will that give Tampa enough time or flexibility to make the moves needed to be cap-compliant come October?
Performance Bonuses
Questions:
How will the league handle games-played bonuses for a shortened or lost season? How will the league handle “Schedule A” and “Schedule B” bonuses in entry-level contracts? How will the league address players who were on pace to spend 100 days on injured reserve?
Background:
The “Schedule A” bonuses carry specific targets, such as 20 goals, 35 assists or 60 points for forwards. Those are worth $212,500 apiece to players who have them included in their entry-level deals.
@CapFriendly’s two cents:
I’m assuming they’d have no choice but to prorate the totals, but that is simply a guess. However, if they don’t and a player who would have almost definitely hit a threshold or two were to just fall short, that would be tough.
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Accrued Seasons/Waivers/Arbitration/Entry-Level Slides
Questions:
How will a shortened season impact whether a player earns an accrued season? Or his waiver eligibility? Or his arbitration status? Or whether his entry-level contract kicks in or slides another year?
Background:
When the 2012-13 regular season was shortened to 48 games because of the lockout, most of these things wound up getting calculated on a prorated basis. While it’s reasonable to assume that a similar approach would be taken again, it could come with some unintended
consequences.
@CapFriendly’s two cents:
The one that will be most interesting is the slide-eligible players. The entry-level system allows a contract to be delayed by one or two years for 18- and 19-year-olds, respectively, if they play in nine or less NHL games during the season. This process is known as an entry-level slide. There are clubs who didn’t want to have one of their prospects burn a year and therefore sent them down to the AHL after they played nine games.
Now, let’s say the NHL implements a prorated system based on, for example, 70 games: Does that nine games now become the equivalent of 10 or 11? Examples include Martin Kaut in Colorado and Oliver Wahlstrom in Long Island. All of a sudden the early end to the season might mean they burn a year off their entry-level contract, even though the club had no plans to do so.
Scheduling
Question:
What will the critical dates calendar look like? How much can it be compressed if needed?
Background:
There’s a prescribed set of rules and deadlines built into the off-season that will all likely have to be shuffled because of the pause, which could be challenging if this season resumes.
@CapFriendly’s two cents: Let’s say they have a post-season that goes into August, how do you squeeze what normally takes about two and a half months of off-season activity into maybe a month while training camps are going on?
The off-season typically includes:
-Entry Draft (late June)
-Buyout period (begins June 15)
-Free agency (begins July 1)
-Arbitration (July and August)
-Rookie camps (July and August)
-Training camp (September)
It will be a challenge to fit all of these aspects of the off-season into the calendar if the playoffs extend through the summer.
Seattle Expansion
Questions:
How will a shortened or lost 2019-20 season impact a player’s pro seasons calculation for expansion? How will a shortened or lost season impact the “played in 70 or more NHL games in the last two seasons” requirement minimum for players being exposed?
Background:
A quick refresher on the expansion rules. Teams must expose at least two forwards and one defenceman to Seattle who are under contract for 2021-22 and played at least 40 NHL games in 2020-21 or 70 NHL games total since the start of 2019-20 — our paused season.
@CapFriendly’s two cents:
I haven’t had much time to investigate this matter as it relates to the stoppage in depth, but I’m starting to spend more time on it now. First off, Seattle must select 30 players whose total cap hit value don’t exceed the upper and lower limits of the 2020-21 season. Will a lost season, and the possibility of a lower than expected cap in 2020-21, change Seattle’s plans and who they end up selecting? Will it result in even less side deals like the ones we saw with the Vegas expansion draft?
Another interesting case is the minimum exposure requirement of 70 or more NHL games played within two seasons. How will a shortened or cancelled season impact that threshold and the number of players that Seattle will have to choose from? Will the games played threshold be prorated for the 2019-20 season? Or what about situations like Juuso Valimaki in Calgary, who’s been on IR all season but had resumed skating. All he needs is one pro game this season to be expansion draft eligible in 2021.
If the season gets cancelled, that’s one less player Calgary will need to worry about protecting, and one less player Seattle might have available to pick from.
