Lots of star players in the NHL are signing megadeals. 12-year and seven-year deals are being made, but are they just using this to cheat the salary cap?
Consider Marian Hossa.
He signed a 12-year $62.8 million contract for a cap hit of about $5.23 million per year for the entire 12 years. However, he is being paid $7.9 million per year for the first seven years, then $4 million, and the last four years he is being paid $1 million or less. He was 30 years old when he signed the contract so he would have to play until he is 42 to live out the life of the contract.
Who the heck plays until they’re 42 (Chris Chelios notwithstanding)? I fully expect him to retire when he is 38, so up until that point he would have made an average of $7.4125 million per year.
These are savings of over $2 million on the cap hit which they can spend on other players, interesting no?
Then we look at Chris Pronger.
He was under 35 when he signed the contract but since the deal kicks in when he is over 35 they said that even if he retires it will count against the cap.
The Philadelphia Flyers challenged this ruling to no avail. Look at the way they are paying him (over $7 million per year in the first four years and $4 million in the fifth year. If it was only a five-year contract, the cap hit would have been $6.68 million and if the deal was only four years, then it would have been $7.35 million.
The list goes on and on with Henrik Zetterberg's cap hit coming off the books when he's 40, Johan Franzen's also comes off when he's 40. Zetterberg might play until he's 40 (though it's unlikely) and Franzen, with all his injuries, will be lucky to make it to 35.
I always like to end on a good note however, so we will discuss Alexander Ovechkin.
He plays a hard style but his contract comes off the books when he's only 35. Also, the amount of money they are paying him yearly more or less stays the same. So that has been a fair contract that allowed them to lock up the greatest player of this generation.
For those of you who know me, you know that Ovechkin is in my opinion above everyone else. So I respect this contract.
In conclusion, I think these long term contracts (with the exception of Ovechkin) are just a way to circumvent the salary cap. I think what the league should do is count the amount of money paid each year as the cap hit. If there are signing bonuses, you can prorate them over the life of the contract, essentially the NFL rules. I think that would solve this problem.