A Cap Counter
There’s been some confusion over Garth Snow retiring and becoming the Islanders GM and what that means for his salary.
What it means:
* Snow does not receive his player salary
* Snow’s player salary ($750k US)
might count against the Islanders salary cap (update below)
Due to Snow signing a multi-year contract when he’s 35 or older (he turned 36 the day before he signed it), retiring means the salary doesn’t go away in cap land. No one knows this better than local rival New Jersey (Malakhov anyone?).
Snow’s contract runs through the 2007-08 season and is $750k US each season.
Unbelievably, the new 472-page CBA doesn’t have a “became the GM” exemption.
It does seem quite ridiculous that this should hurt the Islanders cap space, and one would hope that if the Islanders would bring this matter before the NHL and NHLPA both sides could agree on a quick and logical resolution.
Update 110pm: Listening to Leafs Lunch, there’s a good point that Snow’s surgery in May could make his salary a cap exception due to injury.
Update Jul 20 135am: From Alan Hahn’s latest:
Snow also will appeal to the NHL to have the remaining two years of his contract, at $750,000 each, removed from the salary cap as an injury exemption. According to the collective bargaining agreement, Snow’s contract would still be a cap hit despite his retirement because it was signed after he turned 35.
However Snow, who sprained both knees in January, suffered a residual hip injury that required surgery in May. He said he didn’t expect to be ready for training camp, nor did he think he would have fully returned to form as a result of the injury.
“I don’t think that I would be the same goalie that I was,” he said.
Update Jul 20 1125am: Peter Botte of the Daily News chimes in with something similar:
Snow’s player’s contract called for a $750,000 salary for this season and next, and that figure technically remains on the team’s cap because of a CBA rule stipulating such for players who sign contracts after the age of 35. Snow said he will seek to add a veteran backup goalie to replace himself, but the Isles also announced they have agreed to terms with Bridgeport goalie Wade Dubielewicz, 27, on a one-year contract as insurance.
Snow indicated he will appeal to the NHL to have his contract dropped, because he underwent hip surgery in June and isn’t sure if he would have been ready by training camp.
Someone involved with the NHLPA reiterated to me what an NHL representive did: Snow’s contract should count against the cap and added “I think they will have a difficult case to plead to the NHL.”
I’ve been combing (i.e. abusing the search tool) the CBA and luckily I was pointed to the same relevent part by both sides, Article 50.5.B.5.
All Player Salary and Bonuses earned in a League Year by a Player who is in the second or later year of a multi-year SPC which was signed when the Player was age 35 or older (as of June 30 prior to the League Year in which the SPC is to be effective), but which Player is not on the Club’s Active Roster, Injured Reserve, Injured Non Roster or Non Roster, and regardless of whether, or where the Player is playing, except to the extent the Player is playing under his SPC in the minor leagues, in which case only the Player Salary and Bonuses in excess of $100,000 shall count towards the calculation of the Averaged Club Salary;
So the question then becomes: if the NHL doesn’t except Snow’s injury, can Snow demote himself a la the Lightning and Dave Andreychuk? Snow’s salary wouldn’t count against the cap, but the Islanders would have to pay him. Of course, they’re probably working out a contract for him to be general manager right now (I’m assuming one hasn’t been done so fast if Ted Nolan just signed his last week and Smith never signed one).
In a creative, but see-through move, this could be one scenario: Snow “unretires” and demotes himself to the AHL where no one expects him to report. His salary does not count against the Islanders cap. The Islanders would have to pay him his $750k US over the next two seasons. Any contract he signs to be general manager is $750k less than it would be for the next two seasons. Or, if his pay is/was to be less, a multi-year contract with $1.5 mil lopped off of it and then averaged out (and some sort of give-back if terminated early by Snow).
Just tossing ideas around that there may be more than one way for the Islanders to get Snow’s salary off of the player salary cap.
Update Jul 21 945am: Commenter Kel rightfully points out that the wording of the above article suggests only $100k per year gets lopped off the cap by sending a player to the minors.
Comments:
If the Isles get out of Snow’s contract, the Devils will be pretty mad. I think New York will be stuck with the cap hit.
Posted by Jamie Fitz on Jul 19, 2006 at 11:21 AMI think the Islanders have no intention of spending anywhere near the cap. So why should they care if Snow’s salary counts against it or not?
Posted by Greg Ballentine on Jul 19, 2006 at 11:27 AMThe clause in Article 50.5.B.5 prevents teams from avoiding cap hit by sending older players signed to large contracts to the minors, and that’s why it reads:
...his SPC in the minor leagues, in which case only the Player Salary and Bonuses in excess of $100,000 shall count towards the calculation of the Averaged Club Salary…
The league minimum is over $500,000, so there’s no significant savings in cap space for the Islander to have Garth Snow play in the minors next season as a player.Now what I find interesting is that how both sides NHL and NHLPA apply that clause to retired players, because it clearly says
All Player Salary and Bonuses earned in a League Year by a Player..
Retired players don’t earn any salary or bonus, right? Maybe I should look up the definition of “Player Salary and Bonuses” in the CBA.
Posted by Kel on Jul 20, 2006 at 04:35 PM
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