CBA 101: Could the lockout result in additional 35+ contracts?

Image courtesy of openingfaceoff.netLast week I opened up CBA 101 to mailbag questions as I had more or less covered the critical topics with respect to the, now expired, Collective Bargaining Agreement (CBA). Flyers Faithful’s own Marcello submitted a question.

Let’s say a player signs a contract extension set to kick in during the ’13 season, when he turns 34. If there is no season and the contract does not start until he’s 35, is it now considered a 35+ contract?

This is a very interesting question, and to be honest, I didn’t definitively know the answer. So I took some time to scour the existing CBA but I am not so sure I have actually identified an answer; let’s take a look at what I’ve found.

Firstly, you can find an earlier CBA 101 on 35+ contracts here. As defined in the CBA Section 50.2(c)(iv):

“All Player Salary and Bonuses earned in a League Year by a Player who is in the second or later year of a multi-year SPC [standard player contract] which was signed when the Player was age 35 or older (as of June 30 prior to the League Year in which the SPC is to be effective), regardless of whether, or where, the Player is playing, except to the extent the Player is playing under his SPC in the minor leagues, in which case only the Player Salary and Bonuses in excess of $100,000 shall count towards the calculation of Actual Club Salary;”

Marcello’s question touches on the bolded part above. The key to a 35+ contract (at least as defined in the now expired CBA) is the date at which the contract takes effect; not the date at which it is signed. So if a lockout caused a contract to take effect one year later, you could conceivably have players that are now 35 in the league year in which their contract takes effect.

When the 2005 CBA was created they wrote in some definitions and provisions on how to handle contracts that were agreed upon during the old CBA (which was agreed to in 1995).

1995 Standard Player Contract” or “1995 SPC” means the standard form of employment contract for Player signings entered into by Clubs prior to the Effective Date, in accordance with the terms of the prior Collective Bargaining Agreement, pursuant to which a Player contracted with a Club to provide services as a professional hockey player. – Article 1 Definitions

 

11.1 Standard Player’s Contract. The standard form SPC annexed hereto as Exhibit 1 will be the sole form of employment contract used for all Player signings after the execution of this Agreement. The standard form SPC may not be amended or modified in any manner whatsoever. Filed form 1995 SPCs will be considered valid and effective until their expiration, as deemed modified by this Agreement and the Compliance Rules attached as Exhibit 16 hereto, provided, however, that notwithstanding anything to the contrary contained herein, any previously, and still outstanding, rejected SPC shall not be deemed to be registered or approved pursuant to this provision or otherwise, and such rejected SPC shall be grieved in accordance with Article 17 of this Agreement. – Article 11 RULES AND PROCEDURES GOVERNING STANDARD PLAYER’S CONTRACT

This section from Article 11 states that the 1995 contracts would be considered valid and effective. However, in order to comply with a number of new provisions (such as a salary cap and average annual value as one example), there needed to be some direction on how to handle these special cases. The CBA contains an entire section, Exhibit 16 COMPLIANCE RULES FOR THE 2005-06 LEAGUE YEAR AND SUBSEQUENT LEAGUE YEARS, dedicated to defining the needed rules of compliance.

As one example, how would teams calculate a player’s cap hit for a 1995 contract, when those contracts were never agreed to with any sort of salary cap in mind? They had to specifically define how to handle that.

(A) For any SPC entered into prior to the execution of this Agreement in which multiple years still remain, the Player Salary and Bonuses (except for traditional on-ice Performance Bonuses) –as well as 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 Contract –due to be paid or earned over the remainder of such 1995 Standard Player Contract shall be averaged over the remaining length of the SPC (including any applicable vested option years, salary revisions or guarantees), for purposes of calculating the Averaged Club Salary of the Club that is party to the SPC on a going-forward basis (see Illustration #3 below).- 50.5 (d)(ii)(A)

I found two interesting excerpts, that while they do not directly apply to our question regarding 35+ contracts, I think may provide a little insight into how the NHL and NHLPA may decide to handle it.

2(o). 2004-05 does not count as a year of service for Waiver purposes unless a Player earned a year of service either: (1) playing under his NHL SPC as a Loaned Player, or (2) playing under an AHL contract with the Player’s NHL Club’s AHL affiliate.

 

5. Option Clauses.

a. For SPCs existing prior to the expiration of the Expired CBA that contain options, such options shall remain exercisable under the same terms as outlined in the existing SPC

The fact that they agreed not to count 2004-2005 as a year of service for waiver purposes, and that they rolled option clauses over into the new CBA, leads me to believe that they may do something similar with respect to 35+ contracts.

So truthfully, I was not able to locate an answer to the question, but from what I’ve read I would believe that they would “grandfather” these contracts into the next CBA so that teams aren’t stuck with a 35+ contract they never intended to give. It had been reported that teams would not be penalized for spending to this summer’s salary cap even though many expect the upper limit to decrease. I would expect that they wouldn’t penalize teams in this respect either.