Luongo deal has escape clauses
There was a lot of mutual admiration expressed after goaltender Roberto Luongo signed a monster 12-year extension with the Vancouver Canucks this week.
VANCOUVER — There was a lot of mutual admiration expressed after goaltender Roberto Luongo signed a monster 12-year extension with the Vancouver Canucks this week.
Canucks general manager Mike Gillis, who refused earlier this summer to give a similar deal to the Sedin twins, said Luongo was different. He was the right person, and the right player at the right position.
Luongo, for his part, heaped praise on Gillis and the Canucks. He said he believed in the general manager’s plan and ownership as he made what looked to be a full commitment to the city, where he is seemingly prepared to play out the rest of his career.
It was all true. But only to a point. Every relationship has its limits and neither side in this marriage was prepared to fully lock in.
The devil is so often in the details and there are some interesting ones in the Luongo contract which is set to pay him $64 million US over the 12 years. It’s no secret that most people don’t believe Luongo will play all 12 years, which would take him to age 43. Chances are he will retire before then, and most see him playing just eight or nine years in Vancouver. But it could be far less. This deal includes several “escape clauses,” mitigating risk by giving both parties an out if they’re unhappy.
The first comes five years into the extension. If Luongo isn’t pleased with where the team is at, or where it’s heading, he can then trigger a trade. The out clause is timed for what should be an organizational crossroads — one year after the Sedins’ current long-term deal is up. The Canucks have agreed to accommodate the request by moving Luongo at that point.
It’s likely Luongo would be a valuable commodity, coveted by NHL teams even at age 36. If it were to happen, the team which traded for him would owe him $27.2 million for the final seven years of his deal.
Two years later, after the contract extension’s seventh year, the Canucks have a reciprocal clause. If they want to go in another direction, they will have an opportunity to move Luongo despite his no-trade clause.
Luongo would be 38 years old. But, if he’s still playing at an elite level, should remain an intriguing trading chip. At that point of the deal Luongo would have five years left and he would be owed just $13.714 million.
The escape clauses will be a story down the road. For now, they may raise some concerns, especially from an insecure fan base which has, in the past, doubted Luongo’s commitment to Vancouver. But Gillis, a former agent, said there’s nothing to worry about as he doesn’t see anything unusual in the clauses.
“They are commonplace for high end players,” he said. “Especially for contracts that have term like this. It is not unique.”
There are a couple more scenarios which may play out over the course of the contract. With his limited no-trade, Luongo did not get a no-movement clause. It leaves the slim possibility that the Canucks could put him on the waiver wire or demote him to the minors in the later years of the deal. It’s admittedly preposterous but possible all the same.
If Luongo wanted to keep playing into his twilight years, and the team wanted to move on, the more likely scenario would see the Canucks buy out Luongo’s contract. Because his contract is heavily front-loaded, a buyout would provide a lot of relief after eight years: The Canucks would have paid $57-million to Luongo at that point, leaving just $7 million over the remaining four years. With a buyout amount of $4.7-million (two thirds of $7 million) spread over twice the remaining length of the 2-year deal, the Canucks would owe just $587,000 a year.
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