Cap advantage recapture makes trading for Shea Weber far too risky to even consider

Recently, Flyers beat report Tim Panaccio offered the following prediction for this summer:

Even outside of the fact that I’m not sure Nashville would be eager to trade him after paying him such massive sums of money in his first year, I would argue, with all due respect to Tim, that it would be a terrible, terrible decision because of the new Collective Bargaining Agreement’s (CBA) “cap advantage recapture system”. If I were an NHL general manager, I wouldn’t touch Shea Weber with a ten foot pole Zdeno Chara’s hockey stick.

From the day on which Nashville decided to match the offer sheet that Shea Weber signed with the Flyers people have been speculating as to whether Nashville would trade him after the mandatory one year waiting period. Specifically, would the Flyers still be interested in acquiring him. With the Flyers’ absolutely horrendous defensive struggles this season, people continue to clamor for Weber in the summer.

I elaborated on the cap advantage recapture system in one of my earlier CBA Explained articles this season. In the simplest of explanations, it holds teams accountable for front-loaded contracts that are in excess of six years. If for a given year you are paying a player $14 million in salary and/or bonuses, but his cap hit is only $6 million, you are benefiting from a “cap advantage” of $8 million in that season. This system is designed to make you accountable for those “savings” should the player retire early and not fulfill his entire contract.

Let’s take a gander at how this would affect the Flyers, or any other team, acquiring Shea Weber this summer.

The first row is Weber’s salary/bonuses for each year of his 14 year contract. You can also find his cap hit for each season (which never changes, as it is the average), his age in each of those seasons, and the team for which he played in those seasons. In this hypothetical, the Flyers have traded for Weber after he played the first year of his contract in Nashville. I’ve highlighted seasons in which his salary/bonuses are greater than his cap hit in red, and seasons in which it is lower than his cap hit in green.

The last two rows are the most important. “Advantage” (highlighted in orange) shows the total accumulated cap advantage by the Flyers as you progress through the contract. “Penalty” shows the amount of the penalty the Flyers would have to pay for every remaining year on the contract, should Weber retire following that season.

In year two, Weber plays his first season as a Flyer. In this exercise, we can completely ignore year one with Nashville, as they are responsible for any advantage gained in that season.

With a salary of $14 million and a cap hit of $7.857 million, the Flyers see a “cap advantage” of $6.143 million. If Shea Weber then retires after year two, the Flyers are responsible for paying back that $6.143 million “cap advantage” over the remaining years left on the contract. 6.143 divided by 12 remaining years leaves you with a penalty of 512k every season for the next 12 years.

In year three, we have another season in which salary is dramatically higher than his cap hit; so the Flyers are accruing even more of a “cap advantage”. This is why you see the “Advantage” row growing larger for every “red” season in addition to decreasing for every “green” season. Additionally, we now have less years over which to repay this penalty; now 11 years instead of 12. You can see how this is getting scary. The “Advantage” amount keeps growing, and yet that amount is being split up over fewer years.

As the chart indicates, there are some pretty terrifying risks to consider. The largest the penalty ever gets would be after year ten at $4.822 million; and the Flyers would have to pay that for each of the last four seasons. Just to reiterate, at that point in the contract the Flyers have paid Weber a total of $90 million in salary/bonuses for nine seasons. Over those same nine seasons, he has hit the cap for $70.713 million ($7.857 X 9). The difference between those numbers is the $19.287 million you see and they would be responsible for repaying it, should he retire at that point.

Weber would be 36 years old, so it isn’t unreasonable at all to think that he could retire. You can also see that there is a very significant penalty all the way through age 38, when the penalty is still $3.787 million for two more years.

Weber would have to play through age 39, with only a single year remaining on his contract, for the penalty to become–what I would consider–reasonable at $716k. I don’t see how any team would be comfortable taking on this amount of risk.

If I were to play my own devil’s advocate here, there could be ways of avoiding the penalty. Maybe Weber suffers an injury (maybe even a “fake” one), and is then placed on Long-Term Injured Reserve (LTIR) throughout the life of his deal. However, as I try to state whenever I have the opportunity…LTIR is not an ideal scenario, as it still handicaps the team (when you aren’t relying on LTIR, you can afford to trade for Iginla, Morrow, and Murray like the Penguins because your dollar goes further). The league will also be on a new CBA at that point, so who knows if that will even be a possibility.

Additionally, maybe the cap ceiling rises so much that something like $4.8 million in dead cap space for four years is not a concern?

I was curious how the numbers would look if Weber were acquired later in his contract, effectively allowing Nashville to assume more of the expensive seasons. Maybe it would make sense to acquire him, but just not for next season.

Here we have the scenario after year two:

We still see significant potential cap penalties in excess of $3 million for multiple seasons. The most expensive being $3.286 million for four seasons. It’s quite a bit better than if they were to trade for him this summer; but it’s still scary.

In fact, if Weber plays through age 39, the Flyers would no longer have any risk of penalty, as they have no longer seen any “cap advantage”. After his age 39 season in this scenario, the Flyers have paid Weber a total of $81 million for 11 seasons. He has hit the cap for a total of $86.427 million. So the Flyers no longer have seen any “cap advantage” as they have actually hit the cap for more than they have actually paid Weber.

And after year three:

At this point, things don’t look quite so bleak. There isn’t a single potential penalty in excess of $2 million. It never gets any worse than $1.804 million for eight seasons; however that would require him to retire at age 32, which you would like to think would not happen. If Weber played through age 38, the same age as Kimmo Timonen currently, all “cap advantage” penalty risks would have expired.

When it comes down to it, the amount of risk involved with trading for Shea Weber this summer is so significant, that I would even balk at claiming him off of waivers. Yes, I said it. It sounds absurd, but it’s true. I certainly wouldn’t be eager to pay a high price in players, prospects, and draft picks in addition to assuming this long-term risk. This is the Flyers however, so anything could happen as they certainly don’t seem to be overly concerned with risk.

If the Flyers, and Flyer fans, are dead set on Shea Weber, wait at least one more season.

  • http://philadelphia.foobooz.com/ Art from Foobooz

    The penalty is just salary cap room that can’t be used. So with diminishing salary, wouldn’t Weber become attractive to a smaller market team that doesn’t spend up to the cap ceiling? Big worry would be him retiring but as long as you didn’t hold hold him too long, no penalty?

    • http://www.flyersfaithful.com/ Kevin Christmann

      Yes, if there is a “cap floor” team (aka a team that is closer to the cap floor than the cap ceiling), they may not care about these penalties at all. But for a team like the Flyers who are always at, nay…over, the cap thanks to LTIR, a $4 million penalty would be crippling. (But again, we don’t know where the cap ceiling will be in 10 years.)

  • Pingback: Flyers Faithful: Hockey Hilarity: Remembering Webering

  • Roland Brian Alonzi

    You’re forgetting a few things. 1) This is the team that signed Bryzgalov to that monster $51M contract. Who is thinking about year 12 or 13 of this contract? I would take Weber ANY TIME given what he represents. STUD BLUELINER that we badly need.