CBA 101: Offseason Salary Cap

Image courtesy of openingfaceoff.net

Image courtesy of openingfaceoff.net

During the offseason, the upper limit of the salary is temporarily raised by 10 percent so that teams have the ability to manage their rosters with a little more freedom.

Many people turn a blind eye to this fact and solely look at the real upper limit of $70.2 million; often times already putting players out of their minds that are unlikely to play with the team that season. However, in the case of a team like the Flyers, this temporary upper limit can sometimes be a concern.

From the Collective Bargaining Agreement, Section 50.5 (c)(ii)(B):

Nevertheless, in order to ensure that Clubs may have sufficient time and flexibility to plan their rosters during the off-season, the Upper Limit shall be temporarily raised by ten (10) percent to permit Clubs additional flexibility with their Averaged Club Salaries during the period from July 1 until and including the last day of Training Camp. On the day following the last day of Training Camp, the Upper Limit shall again be lowered to the level as calculated in Section 50.5(b), and all Clubs must once again be in compliance with the Upper Limit from the day following the last day of Training Camp until and including June 30.

The question, with regards to this temporary upper limit, is what exactly counts towards the averaged club salary? From section 50.5(d)(i)(A):

From July 1 until and including the last day of Training
Camp of each League Year, “Averaged Club Salary” for
each Club for that League Year shall be calculated as the
sum of the Player Salary and Bonuses for that League Year
for each and every Player, from the following categories:

(1) The Averaged Amount of the Player Salary and
Bonuses for that League Year for each Player under
a One-Way SPC with the Club; plus

(2) All Deferred Salary and Deferred Bonuses to be
earned in that League Year (in accordance with
Section 50.2(a) and Section 50.2(b), respectively);
plus

(3) All Ordinary Course Buyout Amounts to be paid in
that League Year (in accordance with Section
50.9(i)); plus

(4) Any amount offered in that League Year by the
Club in a Qualifying Offer or in an Offer Sheet to a
Restricted Free Agent from the date of such offer
until the earliest of the following: (A) the
Restricted Free Agent signs an SPC with the Club;
(B) the Restricted Free Agent signs an SPC with
another Club; or (C) the Qualifying Offer expires
pursuant to Article 10.2 (for purposes of Two-Way
Qualifying Offers, the NHL portion of the
Qualifying Offer will be counted at a rate reflective
of the Player’s time on an NHL Roster (including
days on Injured Reserve, Injured Non Roster and
Non Roster status) the prior League Year so that,
for example, a Player who spent forty-six (46) days
on an NHL Roster (including days on Injured
Reserve, Injured Non Roster and Non Roster status)
in a 184-day regular season, and receives a
Qualifying Offer for $500,000 (NHL) / $50,000
(AHL), the portion of his Qualifying Offer that will
count for off-season accounting purposes will be
46/184 x $500,000 = $125,000); plus

(5) For any Player under a Two-Way SPC, the NHL
portion of the SPC will be counted at a rate
reflective of the Player’s time on an NHL Roster
(including days on Injured Reserve, Injured Non
Roster and Non Roster status) the prior League
Year so that, for example, a Player who spent fortysix (46) days on an NHL Roster (including days on
Injured Reserve, Injured Non Roster and Non
Roster status) in a 184-day regular season, and has a
Two-Way SPC for $500,000 (NHL) / $50,000
(AHL), the portion of his NHL Salary and Bonuses
that will count for off-season accounting purposes
will be 46/184 x $500,000 = $125,000; plus

(6) For SPCs entered into prior to the execution of this
Agreement, the face amount of any vested option,
the face amount resultant from a salary revision, a
salary or bonus guarantee, or other such
compensatory provision in such 1995 Standard
Player Contracts (see also Exhibit 16 of this
Agreement regarding options); plus

(7) With respect to any new Player Salary or Bonus
dispute between a Player and a Club arising after
the execution of this Agreement (i.e., relating to
Player Salary and Bonuses payable on account of
the 2005-06 League Year or any subsequent League
Year), any amount paid (excluding interest) in
satisfaction of any award or judgment relating to, or
settlement of, any such dispute, but only to the
extent that such amounts have not otherwise been
included in the Player’s Player Salary or Bonuses

I’ve bolded the portions of this section that are necessary using the Flyers as an example. Number one refers to one-way contracts, which are pretty self explanatory. However, many people write off guys like Chris Pronger, who is likely to spend the year on Long Term Injured Reserve (LTIR), or Matt Walker, who is likely to spend the entire year with the Phantoms. They still count towards the upper limit during the offseason.

Number two refers to bonuses. As an example, Brayden Schenn was sent to the American Hockey League to start the year last year so that he would no longer be able to acheive a games played bonus. It effectively reduced his cap hit, because a bonus was no longer achievable. During the offseason however, a bonus like that would count in full.

Number three refers to buyouts, which the Flyers actually have this offseason with Oskars Bartulis. They have $100k of dead cap space due to his buyout.

Number four refers to qualifying offers. That would mean Marc-Andre Bourdon would still count because we’ve made him a qualifying offer (therefore retaining his rights), and even though we have not yet re-signed him, he is counting towards the offseason upper limit.

Number five refers to two-way contracts. Any player on a two-way contract counts against the offseason cap “at a rate reflective” of the time they spent in the NHL. So even some of the guys who spent minimal time with the Flyers last year, still count against the offseason cap to some extent; guys like Brandon Manning, Ben Holmstrom, and Tom Sestito.

Truthfully, it’s relatively rare to have concerns about exceeding the offseason upper limit. However, if you have a number of players expected to go on LTIR (Pronger, Ian Laperriere, Mike Rathje), or players expected to spend the year in the AHL (Walker, Michael Leighton), like the Flyers have in years past, it is common for people to forget about them. In actuality, they must be accounted for when planning your offseason moves as General Manager.