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Will the Canucks win a dispute with NHL on cap penalty?

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Slegr

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Roberto Luongo announced his retirement, and the Canucks are expected to face the cap recapture penalty clause in the CBA, costing about $3 million cap hit for the next three years.

 

As most know, this penalty clause was instituted by the NHL as new rule following the signing of the Luongo contract, and it was intended to retroactively penalize teams that benefited from contracts like this one. 

 

It's true that the actual difference in cap hit is actually closer to $2.2 million, since the Canucks still had $800,000 in retained salary from Luongo’s contract, and that $800,000 is now off the books.

 

Given the NHL created a CBA rule that came after the signing of the Luongo contract, I am going to make an assumption that the Canucks management will dispute this clause now that Luongo has declared his intentions. In fact, I'd be choked if they didn't dispute it. But my question is, will they win the dispute?

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It only becomes relevant if the Canucks intend to spend within $3m on the cap.  If they don't intend to then disputing it is pointless.  This team are not going to be cup contenders in next 2 possibly 3 years, so why sweat it.  According to Capfriendly they have $15m in cap space for next year with 22 roster players on the roster.  Sure they have to sign Boeser but that still leaves plenty to go after a big free agent if they want to, without coming within $3m of the league wide cap. Can they, perhaps, will they, probably not.

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@danaimo

 

With regards to the $3m in cap space, we may not use it this year, but Canucks will very likely want that cap available to them in the future, as they'll be looking to re-sign both Petterrsson and Hughes to new deals plus bolster the lineup throughout. This year it may not matter much, that $3m could haunt us in a couple years time if that's the difference between us landing a legit top 4 D or some bottom of the barrel spare parts.

Edited by Quinn_Jet
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Just now, Quinn_Jet said:

@danaimo

 

With regards to the $3m in cap space, we may not use it this year, but Canucks will very likely want that cap available to them in the future, as they'll be looking to re-sign both Petterrsson and Hughes to new deals plus bolster the lineup throughout. This year it may not matter much, that $3m could haunt us in a couple years time if that's the difference between us landing a legit top 4 D or some bottom of the barrel spare parts.

The Leafs are still paying Kessel 2 million.  This stuff happens.  For us fans it’s not fair, and a kick in the teeth.  Our team can still win.  

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6 minutes ago, Quinn_Jet said:

@danaimo

 

With regards to the $3m in cap space, we may not use it this year, but Canucks will very likely want that cap available to them in the future, as they'll be looking to re-sign both Petterrsson and Hughes to new deals plus bolster the lineup throughout. This year is may not matter much, that $3m could haunt us in a couple years time if that's the difference between us landing a legit top 4 D or some bottom of the barrel spare parts.

The real importamt contract is Petey's which will come in to effect in 2021.  That's the year when cap space will be crucial.  Another thing to bear in mind is the next US tv contract.  I've heard that the new NBC contract could be a huge windfall for the league and this affects hockey related revenue and consequently the cap.

Edited by danaimo
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15 minutes ago, The Lock said:

Doubt they'd win it. LA has similar issues with I think Mike Richards (anyone can correct me there if I'm wrong). The league would just have to point to LA and say "they have to deal with it too".

My understanding is that LA and Richards came to a mutually agreed upon settlement.  As far as the BOG voting - if Vancouver can provide evidence indicating they did not vote in favor of this penalty perhaps they might lobby the league for an exemption or some other kind of 'grandfather' clause? 

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We deserve to have this reversed for two main reasons:

 

1.  The contract was perfectly within the rules.  If the NHL had a problem with it, it wasn't our fault, it was their's.  They wrote the rules, they have to live by them.  You can't go back and retroactively change the rules and punish us for something we did that was perfectly legal at the time.  

2.  After Burrows blew the whistle on a ref that threw a game - the NHL spent years punishing us.  They slandered Burrows in various media.  Created hit-pieces.  Etc...  And then the refs spent years unfairly calling our games to punish us further, costing us a Stanley Cup in the process.  Of course, they admitted they were in-the-wrong the second they secretly fired the ref, ending his career (if the ref was so wrong that his career had to be taken from him - why did you just spend the last year punishing the whistleblower and his team?).

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I can see it being heartily challenged if the Canucks are against the cap and can’t find any other way to hide some contract. But for the first two years of it they’ll just comply because it’s a non-issue. Luongo may as well be on LTIR until the team actually hits the cap ceiling. 

Edited by drdeath
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Benning has been pretty aggressive in trying to make our team better from the sounds of it, but I still doubt we will have serious cap issues from this for a couple of years.  As mentioned, when Petey is up for nenewal, it will hurt then.  We aim to be a contender by then, imo.

 

I also agree it is ridiculous this is being held against us when the rule wasn't even in place. Retroactive rules being applied baffle me.

 

Man did we ever get hosed with the whole Luongo debacle.  The end of his contract with us couldn't have gone any worse. 

 

Unless your the Islanders with DiPietro maybe.  That was pretty bad...

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6 minutes ago, drdeath said:

I can see it being heartily challenged if the Canucks are against the cap and can’t find any other way to hide some contract. But for the first two years of it they’ll just comply because it’s a non-issue. Luongo may as well be on LTIR until the team actually hits the cap ceiling. 

You think?  Would allowing it to happen from the beginning not imply we are "fine with it" until it causes a problem?  (Which you are suggesting).  

 

The time to fight it is now.  Besides - decisions are not made overnight - this *might* be a lengthily battle.

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not sure how this can be disputed

how will someone be able to argue around the existing cba

agreed to by everyone

which mandates this specific penalty

 

yeah your honour back then i agreed this was appropriate

but now, not so much, i changed my mind

it just feels unfair now

and i certainly did not expect it to bite me, i thought luongo would use a loophole

but he might not like our team as much as i thought

and now that this is biting me, i feel it is not pleasent

here i am, being unhappy, so please, tell them to stop it

 

Edited by coastal.view
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It should be based on the fact that teams shelter “retired” players that had long contracts through LTIR. Which is worse? Signing a player within the rules with intention of having him play the contract or have players fail physicals to pay them but not count the cap. Especially when some teams have even gained assets through this procedure.

 

Players association Can’t be happy that this essentially kills potentially 9 million in potential earnings for the players over the next 3 years to dead cap space.

 

i wouldnt be surprised if they did something as they basically allowed devils off the hook when kovalchuk retired away from his contract and went back to KHL. 

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imo the best chance is to point out if they figure out a more fair solution now, they will save the NHL from a certain lawsuit from Nashville. Shea Weber's contract is the real time bomb. The NHL have to actually be prepared to do severe damage to Nashville in the event Weber decides to retire too. If that happens Nashville won't have any choice but to sue, as it could actually be a 24 mil one year hit, that would take years to recover from. And if Nashville wins based on recapture being unenforceable, how do you then compensate all the other teams that go screwed by it? 

 

In our case, we were not given the chance to take on Lu's LTIR (as far as we know there were not trade discussions).  Florida had clear motives to ask Lu to retire vs. go on LTIR and they benefitted a lot from that. The recapture clause didn't take this situation into account. 

 

The solution is to allow in cases where the player can't physically play anymore and retires to give the team who signed the original contract to choose either 1) take the recapture penalty, or 2) take the full cap hit as LTIR for the remainder of the deal, up to an amount of say 10 mil per year for however long it takes to run the cap hit out. 

 

This would save the NHL from the potential time bomb of Webers deal causing massive headaches. 

 

Edited by Jimmy McGill
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13 minutes ago, Bobby_Lu1ngo said:

It should be based on the fact that teams shelter “retired” players that had long contracts through LTIR. Which is worse? Signing a player within the rules with intention of having him play the contract or have players fail physicals to pay them but not count the cap. Especially when some teams have even gained assets through this procedure.

 

Players association Can’t be happy that this essentially kills potentially 9 million in potential earnings for the players over the next 3 years to dead cap space.

 

i wouldnt be surprised if they did something as they basically allowed devils off the hook when kovalchuk retired away from his contract and went back to KHL. 

The league seems to, for some reason, have a torn in the side, when it comes to Canucks....

Would be very surprised if they would change it in Canucks favour. 

Find it atrocious that most stinking contracts get shelved for all kinds of illnesses but Bobby Lu comes out and states his body simply can't take it anymore, yet he is a normal retiree... 

So basically its down to whether the player feels, he wants to support the club or not... 

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