At the risk of stating the super obvious, all NHL contracts can have salary amounts that vary from one year to the next. However, if you’re reading this, you’re probably a Flyer fan, and you probably rarely think about a player’s salary. To fans of “rich teams” like the Flyers, when it comes to contracts the only number that matters is “cap hit.”
A player’s cap hit is determined by taking the average annual value (AAV) of the deal. So ultimately, the salary matters very little when it comes to filling out a roster.
The now expired Collective Bargaining Agreement featured a bevy of “back-diving” contracts. These are contracts in which players received most of their money up front, and featured multiple years at minimal dollars towards the end of the contract designed to lower the player’s AAV and thus their cap hit.
One of the biggest changes in the newly agreed to CBA are the restrictions on contract variance from year to year. In simpler words, there are further restrictions around how much a player’s salary can change from one year to the next.
Additionally, contracts are now capped at seven year lengths, or eight for teams re-signing their own players.
As a “rich team”, the Flyers typically benefited by being able to offer huge sums of money in the early stages of a contract. They could then add years onto the end of the contract, to reduce the AAV and have a more manageable cap hit. This is something many small market teams would struggle to match.
As an example, Chris Pronger’s contract goes from $7.6 million in years one and two, to $525k in the last two years, resulting in a $4.921 million cap hit.
Danny Briere goes from $10 million in year one to $2 million in his final year.
Ilya Bryzgalov goes from $10 million in year one to $1.25 million in his final year.
These back-diving contracts, and the idea of a rich team taking advantage of their cash flow was never more apparent than this past summer when the Flyers signed Shea Weber to an offer sheet. I also touched on all of the various CBA nuances surrounding the Shea Weber offer sheet at the time.
Weber signed a 14 year $110 million dollar deal for a cap hit of $7.857 million. He will make $14 million per year in years one through four (with $13 million of each year being a signing bonus).
Per section 50.6(a) of the now expired CBA, a player can’t make more (in salary and bonuses) than 20 percent of the cap ceiling in any given season. The cap ceiling at the time was set at $70.2 million, so the absolute most Weber could make in a given season is $14.04 million. He is just about making the most money allowed by the expired CBA…and most of it is a signing bonus.
His contract then drops to $1 million in the final three years of the contract.
Now let’s assume that section 50.6(a) remains the same, and that players still will not be able to pull in more than 20% of the cap ceiling in a single year. Using the terms of the new CBA, we know the Flyers could have only signed Weber to a seven year offer sheet. Additionally, the contract salary can’t vary more than 35% from one year to the next, and it can’t ever drop below 50 percent of the highest salary.
So what does that look like?
The chart below shows Weber’s contract as it currently stands (the offersheet from the Flyers which Nashville matched), and then two scenarios under the new CBA contract terms.
The red number, 14.04, is the maximum amount that Weber can make in a season, based upon a $70.2 million number (this past summer’s cap). The orange number, 9.126, shows a decrease by the maximum allowable 35% from one year to the next. And the yellow number, 7.02, is the lowest the salary can drop (50% of the highest year or 14.04 in this case).
The first scenario under the new CBA terms starts with maximum money in year one, and decreases by the maximum amount each year, until it reaches the 50-percent number. This results in a $8.32 million cap hit.
The second scenario under the new CBA terms starts with maximum money in years one and two (if the Flyers really wanted to throw money around), and decreases by the maximum amount each year, until it reaches the 50% number. This results in a $9.32 million cap hit.
Both numbers not only result in a higher cap hit when compared to his existing contract, but they are also much more easily matched by other clubs.
Whereas only a handful of teams could have afforded to offer Weber the offer sheet he ultimately signed with the Flyers; many teams (I daresay, most), would be able to offer the contracts in the scenarios I outlined above.
The Flyers have lost one of their competitive advantages…money.