Canucks, other NHL salary-cap dodgers would be crippled by ‘Gary’s revenge’
Proposed rule will punish teams for signing players to front-loaded contracts
VANCOUVER — The Twitter artist @strombone1, who is presumed to be the goaltender soon to be known as an ex-Vancouver Canuck, had this to say Tuesday about the latest wildfire raging on the social media:
“The Luongo Rule? Seriously how cute is that? #adorbs #garybest”
For those, like me, who arrived late for compressed-English classes, apparently the hashtags mean “adorable” and that NHL commissioner Gary Bettman is, in Luongo’s tongue-in-cheek opinion, the best.
Alas, deciphering the Luongo Rule itself — that’s not an official name, but its wide usage is something of a feather in the salary cap of the Vancouver Canucks’ finagler-in-chief, Laurence Gilman — is not so easy.
What it really ought to be called is Gary’s Revenge, a petulant add-on to the Collective Bargaining Agreement, one which aims to punish those teams that dared to exploit the loopholes Bettman left in the last CBA, by signing star players to long-term, front-loaded contracts.
Most of those deals were drawn up with the full knowledge that the players in question would probably be long (or at best a little) gone from the game by the latter, low-salaried years of their contracts, but in the meantime, the salary cap hit would be averaged out over the full term, allowing for more maneuverability for the teams.
All perfectly legal under the old CBA. But embarrassing to Bettman, who left the barn door open as a passel of his best horses slipped through, while protesting that the deals were against the spirit of the CBA. It makes you wonder what all that expensive legal help the NHL engages does for a living, if it’s not to close loopholes before they bring down the house.
So Bettman’s oversight was used against him by teams all over the NHL map — including Mike Gills/Gilman on the Luongo deal — and now The Commish is spoiling to get even.
He aims to make the teams that originally entered into those deals responsible for seeing them out, even in cases where the players are traded midway through.
The good news, for the Canucks and every other team that has players signed into their mid-40s is that, like so many other clauses in the CBA that awaits ratification — you know, the one so important, it took a four-month lockout to craft — it is all but certain to misfire.
By the time most of these deals expire, Bettman will be gone and there will probably be a new CBA that modifies the nonsensical provisions of Gary’s Revenge. Most of the GMs who exploited Bettman’s poorly-thought-out 2005 legal document will have retired, or moved on. Some of the owners, too. Those that are still around will be using the Long-Term Injury dodge to avoid paying the cap hit on aged players.
Long before 2021, when the CBA can be reopened, the poorly-conceived salary cap/salary floor structure will have driven some teams to the verge of (if not into) bankruptcy and will have even some of the middle-class franchises screaming for mercy when they are forced to spend $55-60 million, just to reach the floor. The revenue-sharing pool will be exposed as painfully inadequate.
And meanwhile, the back-assward design of the Luongo Rule — punishing the player’s original employer more severely if he comes close to playing the full term than if he retires halfway through — not only makes no sense, even to Bettman (if it does, I’d love to hear him defend it) but is probably challengeable in court.
Those teams signed legal contracts at a time when such contracts were permitted by the CBA.
Fining them what amounts to millions, a decade after the fact — or in the case of teams like Minnesota (Zach Parise, Ryan Suter) or Nashville (Shea Weber) or New Jersey (Ilya Kovalchuk), potentially tens of millions — would be nothing less than petty, ego-driven pique on the part of a commissioner who appears to have put his dwindling reputation ahead of the best interests of the game. Not for the first time.
Listen, no one’s about to argue that Luongo’s signing was a great deal by the Canucks. It didn’t look like one from Day 1, and the fact that he’s headed down the road two years into it makes it official.
And Gary’s Revenge doesn’t really impair their ability to move Luongo. In fact, with the other new provision that allows teams to eat part of player’s salary in order to trade him, the overall effect probably makes it easier.
Nor would the Canucks, I’m guessing, even dispute that a team that makes a deal like the one they made with Luongo ought to have to repay the $6 million or so in cap relief it got on his contract over those two years. It’s the repayment schedule that’s all out of whack.
If the reports are true, and if the terms haven’t been quietly amended since they were first revealed Monday, here’s the joke: the Canucks could trade Luongo, say, to Toronto, where he plays five seasons then retires with five years left on the deal. The Canucks get to take the $6 million in cap relief they have saved over the first two years of Luongo’s deal, and spread it over the five years he did not play, in $1.2 million chunks. Easy.
Yet if he fulfills all but one year of his 12, pretty much justifying the original signing and making it clear that the contract was not a circumvention of Bettman’s “spirit,” the Canucks’ salary cap gets dinged all $6 million in Year 12.
A far worse case is the fix Nashville is in, through no fault of its own, all because it lost Suter to Minnesota’s extravagant offer, and had to match Philadelphia’s 14-year, $110-million offer sheet to Shea Weber or else lose its other defensive cornerstone.
For each of the first four years, in which Weber is paid $14 million, the Predators get more than $6 million in cap relief owing to the length of the deal. But the bill comes due at the end of his contract. If, for example, they trade him after four years, and he plays until age 40 and then retires with a year left on his contract, in Year 14 Nashville would get slapped with a $24.5-million cap hit, equalling the relief they got from his first four years, crippling the team’s ability to ice a competitive team in 2026.
The clause all but forces a team like Nashville to trade Weber before his cap-relief figure gets too big. Maybe that was the whole idea. Gary’s Revenge.
It’s absurd, and probably unenforceable.
But that’s the CBA the NHL seems about to sign.
The thing is, if you are Vancouver’s governor, or New Jersey’s, or Nashville’s, or Chicago’s, or Philadelphia’s — or the governor of any other team that entered into those long-term deals on solid legal ground that even the league grudgingly approved — why on earth would you vote to ratify it?
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