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Eating salaries: Should NHL teams be allowed to share bad contracts to create more trades?
Brian Burke felt the NHL's salary cap system had a significant inadequacy: That it restricted the ability for general managers to make trades, because the CBA had eliminated the option for two teams to share the financial burden of a large contract in making a deal.
"We're paralyzed. It's almost impossible to make deals, and I think trades are healthy for our business," said Burke …
… back when he was GM of the Anaheim Ducks. In 2007.
So yeah, the battle between the general managers and the Collective Bargaining Agreement's restrictions on moving contracts has been waged for quite a while.
With the GM talks coming up this week in Boca Raton, it's expected that "salary sharing" will be a topic of conversation — just in time for the next CBA negotiations this summer.
Should teams be allowed to share the salary of a traded player, or does that run counter to the spirit of a salary capped league?
From Lyle Richardson, a quick primer on this CBA issue:
"Eating salary". Under the previous CBA, teams were allowed to absorb a portion of the salary of a player they wanted to move as an enticement to teams interested in said player.
That was eliminated under the current agreement, and has been considered a contributing factor to the reduction of trade activity in recent years, not just at the deadline, but throughout the regular season.
Toronto Maple Leafs general manager Brian Burke has, in the recent past, suggested the league reconsider this policy, but that request has fallen on deaf ears at league headquarters. Allowing teams to "eat" a portion of a player's salary or contract in a trade would not only allow more movement in the trade market, but make it easier for teams carrying expensive players who no longer fit into their plans -hello there, NY Rangers and Wade Redden - to ship them out to interested teams, rather than burying them in the minors.
The "eating salary" proposal is close to the current re-entry waivers clause, with one significant difference: The team that handed out the bad contract will receive compensation for moving that player.
The dollar-for-dollar trade environment has punished teams that give out bad contracts — leaving them to keep their hefty cap hits in the NHL, banish them to the AHL, send them through waivers or buy them out during specific windows. But those restrictions have forced teams to jettison other talent, as players then trickle down to teams that have considerable cap space. At least, in theory.
Back in 2007, for example, Burke had a $1.33 million backup goalie whose contract was too bloated to attract a trade partner. So Burke, needing to clear the salary, put that goalie on waivers, where he was promptly snatched up by a division rival.
His name was Ilya Bryzgalov. And the Ducks got zippy for him.
Moments like this are why Burke has been banging the "eating salary" drum for years, and it appears that some of this peers are finally picking up the beat. Market stagnation — like the painful slow and uneventful 2012 NHL Trade Deadline — has made Peter Chiarelli of the Boston Bruins reconsider Burke's position, and he's now in favor of "eating salary" in trades.
The devil's in the details, of course. What are the percentages for the teams sharing contracts? Who carries the heavier burden? Does this happen on all trades, or only for a select few each season?
In 2007, via ESPN, Burke advocated that the maximum salary a team could "eat" would be $2 million in a given trade, and that a team could only have $4 million in "eaten salary" for the season. Again, that was five years ago — both the cap and salaries have shifted dramatically since then.
In 2010, Elliotte Friedman wrote about a plan in which teams share salary but one team — that's close to the salary cap floor, for example — could have the entire cap hit count for their total. In other words, a team wouldn't have to pay all of Wade Redden's salary but would get the benefit of a $6.5 million cap hit.
From the Boston Globe, other considerations for loosening the trade market:
If the league were to allow, say, even a one-third share, the Rangers might consider carrying Redden at the cost of a $2.16 million cap hit while he played for another team at a reduced salary of $4.34 million. A two-thirds share would flip those figures around, with the Rangers stuck for the $4.34 million and the acquiring club taking on the former No. 2 overall pick at the bargain-basement figure of $2.16 million. A salary shared, a career continued.
Another potential remedy could be for the league and the Players Association to expand the window on contract buyouts. Although rare, buyouts currently take place almost exclusively during the two-week period leading up to July 1 free agency. Exceptions are granted for those clubs that have one or more salary arbitration cases later in the summer. By September's training camps, no buyouts are allowed until the following June.
The essential question in all of this is whether it would benefit the NHL.
If the GMs are right and this plan would open up trade routes that are currently about as welcoming a trip through the Bermuda Triangle, then it's worth investigating. If there are clear, and limiting, restrictions placed on how and when this devouring of salary can occur, then it's worth investigating.
There are other benefits: The AHL burial plot could be eliminated, as players like Wade Redden are freed from the minors. (For a good read on that, see Offside blog, which explains why this isn't a loophole.) Teams struggling to reach the cap floor can take on the big contracts of good players rather than handing big contracts to mediocre players during the free-agent frenzy. Or at least they'll have the option.
Our main concern here is that sharing the freight on fat contracts is a 1 Percenter problem in the NHL. The rich teams are the ones signing the Wade Reddens and Scott Gomezes and Roberto Luongos of the world to gigantic, immovable contracts. When's the last time a floor team stashed a contract in the AHL?
We like options. We don't want to see toxic contracts to handcuff a general manager and his team for years after the ex-GM who gave out that deal was fired. We're all for opening up the NHL for wheelin' and dealin', given that a Zack Kassian trade was the biggest news at the trade deadline this season.
But if the CBA has shown us anything, it's that we need to save the owners and GMs from themselves. Give an inch, they take the circumference of the Earth. If we're going to allow these guys to trade salary, it has to with limitations.
Otherwise, we'll get the worst potential aftereffect from all of this: More bloated contacts, handed out with the confidence that there's yet another escape plan from their consequences.
