Don’t expect NHL general managers to play nice when they are forced to deal with the vindictive, petty clause Gary Bettman made sure to include in the new Collective Bargaining Agreement.
The clause works like a time machine, going back to penalize teams which signed mega-long-term deals to take full advantage of a loophole Bettman and his negotiating team left gaping in the last CBA. It has been dubbed the Luongo Rule. To which Luongo responded on Twitter with, “Seriously how cute is that?”
The “Luongo Rule”? Seriously how cute is that? #adorbs #garybest
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Strombone (@strombone1) January 08, 2013
It may be cute to him, but it is irritating and troubling for NHL executives who will be penalized for signing the so-called back-diving deals, which were all permissible under the old CBA. If the league had an issue, they could have voided the contracts and sanctioned the teams who signed them.
Instead, the NHL investigated several of them, including Luongo’s contract. And they exonerated teams, because the contracts were played by the rules.
Well, Bettman and the league have done an about-face, changing the rules on the fly with a cheap shot clause that is sure to hit some teams in their salary cap guts. Generally, teams signed players to deals longer than a decade to spread out the money, and reap cap advantages with declining salaries that winked at the reality these players would likely retire years before the contracts were up. Take Luongo’s deal. He was paid $10 million in the first year of 12 and $1 million in the final two. It’s a $64-million contract with a yearly cap hit of $5.3 million. That is arguably a bargain for a top-tier starter with his resume.
It’s deals like this, worked out by sharp lawyers and capologists, which essentially exposed a diamond mine-sized loophole that embarrassed Bettman and the NHL. So now it’s payback. The Luongo Rule is Bettman’s attempt to exact his pound of flesh. The math is fairly straightforward: Luongo has played two years under his current deal and made $16,716,000. His cap hit was $10.6 million. The difference between the cap number and the salary is $6,116,000. That’s the figure the Canucks will be penalized if he retires before his 12 years are up.
If he retires after Year 9, the $6,116,000 will be spread evenly over the final three years. So, $2,038,666 will be lopped off their cap each season. If he plays 11 years, the Canucks get hit with the full $6,116,000 in dead cap space all at once.
It’s bush and counterintuitive. Why would the penalties increase the longer the players play? What’s going to happen if Zach Parise and Ryan Suter both retire one year before 13-year contracts are up? The Wild will be hit with a $20 million penalty.
