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Sykora Free Pass vs Buyout

Maybe I am the only one who really cares about this, but it struck me as odd when Russo reported that Sykora was on Unconditional Waivers. Anyone else? Well, it bugged me, so I read the CBA and I think I have the reasoning.

Make the jump if you would like. If not, well, fine then.

Star-divide

For the record, Russo has reported all along the way that the process of waivers was started in order to eventually terminate Sykora's contract. I was curious about how they are able to do so, what with a CBA in place and all. Generally, an NHL player cannot simply be fired is all I'm saying.

The CBA can be found HERE, for reference, or you know, for some light reading.

OK, according to page 251, part 13:

The Club, in addition in addition to rights hereunder, at its option, by written notice delivered to the Player in person or by overnight mail to the Players' address set forth herein, may terminate this SPC on the following conditions:

An SPC is a Standard Player Contract, by the way.

It then goes on to spell out the process by which Unconditional Waivers can be accomplished, and what it means to both the player and to the team. The question that struck me was why would the teams not just use this clause rather than a buy-out when terminating a contract?

The first sub-part to the clause clearly spells out that a buy-out must be initiated, and then spells out how that buy out will work. So, how did the Wild avoid having to buy-out Sykora, and avoid the buy-out period completely? Simple. They put him on regular waivers first.

By placing him on waivers, they gave all 29 clubs their shot at him. The team then reserves the right to assign him to Houston, something they know Sykora is not going to agree to.

This is where the legalize fun part begins. Looking at section 14 (b) of the CBA, it says:

14. The Club may also terminate this SPC upon written notice to the Player (but only after obtaining Waivers from all other Clubs) if the Player shall at anytime:

(b) fail, refuse, or neglect to render his services hereunder or in any other manner materially breach this SPC

 

In other words, the Wild, according to the CBA and the SPC, have the rights to place Sykora on Waivers, and should he clear, assign him to their AHL affiliate. They exercised this right, and Sykora has refused to render his services under the SPC with the Wild, making him in breach of contract, and allowing the Wild to put him on Unconditional Waivers and terminate the contract.

It is a very round about way of doing something that should be simple, but cannot be or teams would abuse it. It also becomes evident in this situation, that Sykora has had to be kept in the loop throughout this process, or it would be considered a major insult to him to go through this process.

My only remaining question would be to the NHL. Is this type of dealing between player and team considered collusion? The Devils used it to let Brenden Shanahan out of his deal before the season started. We have to assume Shanahan was involved in that process as well. Seems the NHL was OK with that, so they must be OK with other teams doing so as well, right?

Player and team working together to circumvent the buy-out process. Hmmm...

Let me be clear. I am not accusing anyone of anything. I am just wondering out loud (or in type as the case may be) about the process. Looking for answers, not making accusations.

Thoughts, anyone?

-Buddha

(h/t to @BenThrashers for hashing this out a bit over Twitter today)

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From Russo

They didn’t have to buy him out because the buyout deadline is passed.

Proprietor of Hockey Wilderness - We take Minnesota hockey WAY too seriously.

by nathaneide on Jan 28, 2010 12:00 PM CST reply actions  

Interesting. So why didn’t they do that in MTL with Laraque? They basically told Laraque to go away and plan to buy him out whe the window reopens to do so.

by BReynolds on Jan 28, 2010 12:40 PM CST up reply actions  

you have to assume he’s in on it because alan walsh isn’t whining about it on twitter

Join me on the Hockey Blog Adventure! (or Twitter.) GO BRUINS! (and Wild!)

by Cornelius Hardenbergh on Jan 28, 2010 12:10 PM CST reply actions  

You are not the only one who cares

Though I find it astonishing that very little is being made of this situation.

Here’s an example of how this “faked refusal to report” might lead to a slippery slope:

The year is 2019. Old man Zetterberg goes to the Wings’ management and says he doesn’t really feel like playing for only a million, since the new minimum wage is twice that.

The GM proposes that they waive him, then assign him to the minors, at which point Zetterberg would refuse the assignment and have his contract terminated. A day later, Detroit signs him to a new one-year, $3M deal and suddenly Zetterberg wants to play.

My concern is that knowing that this is possible later on, what’s to stop big market teams from simply signing guys to a contract that pays him $20M this season, with the intention of simply terminating his front-loaded contract once the yearly wage falls below the acceptable level for that star player, then wiping the slate clean and offering him the salary that he deserves at that point?

The Rangers could pay Kovalchuk $20M next season, at a cap hit of $6.5M, on a 6-year deal with the following salary:

  • Year 1 – $20,000,000
  • Year 2 – $10,000,000
  • Year 3 – $5,000,000
  • Year 4 – $2,500,000
  • Year 5 – $1,125,000
  • Year 6 – $562,500

After three and a half seasons, they could then waive him, and either (a) eliminate his $6.5M cap hit, or (b) have him clear waivers, become a UFA, then re-sign him to a new contract.

Okay, so maybe Kovalchuk will still be coveted at only $6.5M, so it’s not the best example. You see my point though, don’t you? Big market teams who can afford to pay a guy $20M can not only stretch his deal out to reduce the cap hit, like Zetterberg. Now they can pull a “Sykora” and re-up Zetterberg at some point, meaning they’ve essentially bypassed the entire salary cap system.

For all of the issues raised by Pronger’s signing as a 35-year old, why wouldn’t Philly simply work out a back room deal with him in a few years to erase his cap hit from their books?

by TD O'Dell on Jan 29, 2010 10:04 AM CST reply actions  

Well, after 35, the contract doesn’t come off the books, no matter what, so they fixed that issue.

As for the Zetterberg example, as long as no one plucked him off waivers, it would certainly be possible. Ugh. Maybe loopholes will always be an issue.

by BReynolds on Jan 29, 2010 10:47 AM CST up reply actions  

No matter what?

Even if Pronger refuses to report for an AHL assignment?

What if he just plain doesn’t show up for training camp?

Okay, so I’m just being melodramatic. Gotta hand it to Walsh, though. If Sykora was willing to trade dollars for TOI, I’m sure he’ll land somewhere for less than the pro-rated $1.6M. And it’ll cost Fletcher less than the $800K he might have been on the hook for, had he gone the traditional route.

Maybe there were no takers before, but for $200,000 why wouldn’t Boston add him to the pile? If Laraque is willing to play for food in Sweden, wouldn’t Sykora accept a two-month deal at minimum wage?

by TD O'Dell on Jan 29, 2010 11:30 AM CST up reply actions  

I can’t say never, because they did the same thing with Shanahan in NJ this summer. But the NHL has to approve it, so maybe there is a line they will not cross? Oh, wait. Never mind.

by BReynolds on Jan 30, 2010 10:21 AM CST up reply actions  

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