Thursday, July 30, 2009

Hossa Contract Under Review By NHL

Bruce Garrioch of the Ottawa Sun is reporting that the structure of Marian Hossa's 12-year $62.8 million contract with the Chicago Blackhawks is under investigation by the NHL. In early February, we took a look at a growing problem in the NHL when it comes to front loading long-term contracts as a way to circumvent the restrictions of the salary cap:
As teams begin to pick up on this strategy, many GM's will attempt to lock up middle-aged talent to extensive contracts in an effort to free up additional cap space...This trend is only beginning and has the potential to cause a major problem for the league down the road, which commissioner Gary Bettman cannot be thrilled about.
Hossa's deal obviously pushed Bettman and league officials over the edge. Under the current Collective Bargaining Agreement, the annual salary cap hit for player contracts is merely the average yearly amount of the total contract. According to Hossa's $62.8 million contract breaks down as follows:
2009-10: $7.9 million
2010-11: $7.9 million
2011-12: $7.9 million
2012-13: $7.9 million
2013-14: $7.9 million
2014-15: $7.9 million
2015-16: $7.9 million
2016-17: $4.0 million
2017-18: $1.0 million
2018-19: $1.0 million
2019-20: $750k
2020-21: $750k
The Blackhawks will have an annualized cap hit of $5.23 million throughout the duration of the contract. However, after closer examination, Hossa will earn $59.3 million of his money in the first eight years of the deal. If following the 2016-2017 season, the Blackhawks decide to part ways with the 38-year-old Slovakian winger, they can buy out the final four years of his contract at two-thirds of the remaining total salary of $3.5 million. What makes this situation even more beneficial to Chicago is that the buyout money is paid out over twice the remaining years of the bought out contract. This amounts to a blip on the radar of $290k a year. If Hossa were to retire at any time, both sides walk away from the deal with no lingering cap hit at all to the Hawks.

Garrioch quoted NHL Deputy Commissioner from an email in which Daly wrote:
“We’re trying to understand how it was negotiated and whether the intent and effect is to circumvent the cap. This was the first of the long-term contracts that took a player out past the age 40 and the value of the contract in its ‘out years’ was dramatically lower than its early years. We want to know if the possibility of player retirement was ever discussed or even contemplated.”
Unless Hossa received the secret formula to 47-year-old defenseman Chris Chelios' longevity last season while in Detroit, it's hard to imagine he'll ever end up playing out the final years of his current deal. According to, only 1.06% of NHL forwards in league history have retired after the magic age of 38 referenced above. For a player with numerous knee injuries in his past and who last week underwent shoulder surgery to repair a torn rotator cuff, my money won't be on Hossa to land in that 1.06%.

From a realistic perspective, it's hard to imagine the NHL's investigation uncovering proof to substantiate their concerns. This is more than likely a warning shot being fired by the NHL in an attempt to clamp down on the long-term contracts and perhaps posturing for an overhaul when the CBA will potentially reopen just two summers from now.

On the other hand, the Chicago Blackhawks haven't exactly had the most efficient month of July. GM Dale Tallon dropped the ball and failed to get qualifying offers to a slew of restricted free agents by the July 1 deadline...a mistake which some claim cost him his job just days later. Reports also surfaced recently that Chicago failed to give Hossa a physical prior to signing him to his contract and may have been unaware of his shoulder injury at the time. Whether there's a note in Marian's locker than says "Remember to Retire in 2017" remains to be seen, but the battle over this salary cap shell game is not going away any time soon.

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Newsmediaspan said...

I think it's very unlikely that the NHL will be able to prove any shenanigans went down. The only way to prove it would be if either someone from the Blackhawks' organization blabbed or if someone from Hossa's party blabbed. his is just meant to scare other teams away from doing the same thing.

Anonymous said...

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