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Minnesota Wild, owner Craig Leipold validate need for cap circumventing long-term deals in NHL

Greg Wyshynski
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"We're not making money, and that's one reason we need to fix our system. We need to fix how much we're spending right now. [The Wild's] revenues are fine. We're down a little bit in attendance, but we're up in sponsorships, we're up in TV revenue. And so the revenue that we're generating is not the issue as much as our expenses. And [the Wild's] biggest expense by far is player salaries." — Craig Leipold, Minnesota Wild owner, to Star Tribune on April 11, 2012

After she birthed Invention, Necessity was the mother to its fraternal twin Hypocrisy, a problem child that would punch other kids on the playground and occasionally set the linens on fire. Thing is, sometimes you just need something that drives you to change the sheets.

Leipold's words in April and deeds in July make him a hypocrite: Crying about expenses related to player salaries, and then adding $196 million in expenses for two players. Unless, of course, he meant the Wild would fix their spending levels by inflating them for the two largest contracts in franchise history.

But as I said: Hypocrisy, or its perception, can be beneficial. Had he stuck to his guns, Wild fans don't experience a game-changing day for the franchise and Leipold doesn't get a chance to write a valentine to those fans (.pdf) as the "Secret Weapon" in negotiations.

Just as important: Had Leipold and the Wild not dabbled in the dark arts of long-term contracts and cap circumvention, these signings might not have happened for Minnesota.

Parise and Suter have identical 13-year, $98-million deals, which include $25 million in CBA-protected signing bonus money up front and some creative accounting to make that work on the back end: a $4 million drop in salary from 2022-2023 ($6 million to $2 million) and then two years of $1 million in salary in 2023-24 and 2024-25, when both players will be around 40 years old and spending their days ice fishing while younger players take their roster spots on the Wild, following their retirement.

Their cap hits are $7,538,462 annually; elephantine, but lower than they would have been on a shorter term or without the decreasing base salary at the back end. They also fit snugly into the rewritten rules under the current CBA that govern low-salary years up to and including when the player turns 40.

There are now 17 NHL players with contracts of nine or more years entering the 2012-13 season; three more, Jordan Staal, Jonathan Quick and Sidney Crosby, have their deals kicking in next summer.

As the NHL and the NHLPA continue their negotiations, the topic of contract term limits is expected to be debated. There's growing concern that these deals adversely affect the free-agent market and the trickle down of talent in the NHL. And there are some owners and GMs that simply don't dabble in them; hell, in the previous CBA negotiation they wanted a 3-year term limit.

A facet of that argument is the ability to use low salary years on the back-end to offer huge money up front and keep the total cap hit low. It's a practice that irks the League. It's a practice that some GMs see as unfair while others see it as a necessity in a capped League.

Here's Gary Bettman on them, three years ago in Summer 2009:

Q. Are you concerned about long-term contracts?

Some of them will work our great, some of them won't. I think over time we have to continue to look at them. I've always been a fan and a proponent of shorter-term contracts, except in the extraordinary case, because it gives you more flexibility. But when you look at Alexander Ovechkin signing the contract he did to ensure he was always going to be a Capital, I don't think anybody has said anything bad about that contract.

Granted, that was nearly two dozen contracts ago for the NHL. Maybe Bettman's watching the reaction to Suter and Parise in Minnesota, and sees this as an extraordinary case.

Which is to say there are always exceptions. Leipold bemoaned player salaries, and then spent $198 million on two free agents. GMs point and laugh at the creative accounting of some teams to retain their talent or attract new players, and then suddenly they're the ones pinning B.S. salary years at the end of a contract.

The NHL will talk tough on long-term deals and act out on cap circumvention, but the League and its owners, deep down, all want that Minnesota Moment. If you're going to have a salary cap that doesn't allow for teams to exceed it with reasonable penalties — say, like, a luxury tax — then the 10-plus years and frontloading of deals should, and I think will, continue.

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