Perhaps the story of the NHL Trade Deadline, since it certainly wasn’t the quantity of trades or the numerous star players on the move, was the advent of the third-party salary cap broker in trades. Three different deals were made at the deadline that included three teams, with the third team strictly being used as a means to retain salary on the centerpiece player moving to a contender short on cap space. In each one, the third team retained the maximum 50% of salary after the seller had also retained 50%, leaving the buyer with just 25% of the player’s cap value. For their part, the third team received a draft pick from the buyer and were able to shed a minor league salary as well.
The Tampa Bay Lightning first used the Detroit Red Wings to broker the trade of defenseman David Savard from the Columbus Blue Jackets. Tampa had been expected to be quiet at the deadline given their miniscule cap space, but ended up getting one of the best defensemen on the rental market. Next, the Toronto Maple Leafs employed the San Jose Sharks as the middle-man for their acquisition of Nick Foligno, again from the Blue Jackets. Toronto had little cap flexibility and a long shopping list at the deadline and would not have been able to add Foligno without help. Finally, San Jose volunteered to be the third team again the deal that sent Mattias Janmark from the Chicago Blackhawks to the Vegas Golden Knights. Vegas has had the worst cap situation of any team in the league this season, restricted from making standard roster moves and several times forced into short-handed lineups. Yet, using this new three-team retention format they were able to add a top rental.
This all poses a question that at least a few other NHL clubs have been asking: should this be legal? The NHL has cracked down on salary cap circumvention in the past and there appear to be some who believe this is simply the newest version, allowing cap-strapped contenders to acquire players that they never could otherwise. However, according to TSN’s Pierre LeBrun on the latest edition of “Insider Trading“, this is one perceived problem that the league will not tackle. LeBrun reports that the league has been well are of this method of trade and were not fooled by the deals made at the deadline this year. After all, it was more than three years ago now when the Pittsburgh Penguins seemingly invented this formula – albeit in a more complete hockey trade – in the Derick Brassard deadline deal with Vegas and the Ottawa Senators. The Golden Knights then used the format to their advantage just last year, adding Robin Lehner from the Blackhawks via a cap-retention pitstop in Toronto. Clearly, there is a group of teams who have taken to this specific style of three-team trade, with Vegas and Toronto chief among them, and there are others who are not happy about it. As such, the NHL has already done its due diligence on the legality and will not take action.
Their reasoning? There simply is no cap circumvention occurring here. LeBrun relays that the league has no issue with a third team being used solely for cap retention, as hockey capital is being acquired by all parties. The Red Wings and Sharks received mid-round draft picks in exchange for their assistance and were even allowed to help balance the checkbook by sending out another contract. The NHL feels that this is a valid use of cap space as an asset to make a legitimate trade. So while it does create situations in which the rich get richer without otherwise having the cap space to do so, all parties are being reasonably compensated within the NHL rulebook. Teams may not like it, but that doesn’t make it illegal. And with the flat cap environment likely to continue for another year or two, this style of trade isn’t going away any time soon.
Smart business decisions. I wonder if NFL teams will start doing this type of business.
As far as I know, there is no mechanism in the NFL salary cap to retain salary. Iin the NFL, trades usually accelerate the signing bonuses and it ends up actually creating a bigger cap hit that year.
NFL also has non-guaranteed contracts
Hey, if all parties are OK with it, why not. The teams squeezed by the cap can still add talent, the teams with cap space to burn can better leverage it, the player with a big contract on a non competitive team has more potential places to land… the other major sports could learn a thing or two here
This is terrible. You’re not supposed to be able to just stack your team. This goes against parity and is a slippery slope. Eventually you can have bad teams start making trades with certain contenders taking on even larger salary retentions and it’ll look as ridiculous as the NBA cap. A couple of super teams, and 4 to 6 team tank.
@Modified_6 – You and I may be the lone voices on this, sadly. I’ll still refer to it as a type of money laundering, aka the “accidental on-purpose *loophole* for the league.”
Not entirely alone.
I’ve always liked the flat cap, and circumventing it shouldn’t be permitted.
It will eventually lead to unbalance and then “Oh no, well we should not allow this” because there will invariably be abuses.
Pretty sure the league is playing wait and see before reacting.
^ I don’t like it either. Adding a major rental UFA like Ovechkin (if the Caps were not contenders) for 9.5 /2 = 4.75 and then 4.75 /2 = 2.375 at the deadline is ludicrous. Now replace Ovi with two 6 million dollar UFAs and you’re getting 2 reallllly good players at 1.5each
Don’t like it. Player should only be allowed to have salary retained one time
The whole purpose of the cap (allegedly) is to ensure that no one team would have a financial advantage — that is, the ability to spend more on player salaries — over any other team. This obviously violates that purpose. It took a lockout to get players to agree to a cap in the first place, and if the owners can manipulate it from their end, the only ones feeling the pinch of forced austerity from the cap (remember, we only have a cap because the owners couldn’t control their own spending) is the players. The union should oppose this.
“The whole purpose of the cap (allegedly) is to ensure that no one team would have a financial advantage.”
The whole purpose of the cap is to produce parity, not to bean count to the Nth degree. Allowing teams to turn cap space into assets produces parity.
“The union should oppose this.”
Why on Earth would the union oppose it? Cap space going unused is the LAST thing the union wants. The union loves this.
Parity is a theoretical *result* of equal access to the marketplace of players.
And it’s cap space going unused on players, just for the purposes of “bean counting.” That’s why.
Hope the Preds can do this with Duchene’s contract. Even if it takes 10 teams to filter the contract thru. :D
But seriously, despite a salary cap that was supposed to create all kinds of parity, we still have maybe a half dozen teams that are legit Cup contenders. Just as it was in the non cap era.
@Gbear – I like! He could end up Shanghai’d in Slobovia! With 1950’s-era goalie pads! (But, I’m a forward! Not anymore!) No guitars allowed, Matty, and no moonlighting for extra Russian Gas!
And yet the league is okay retroactively punishing teams for contracts that they previously deemed legal. The fact that if Jeff Carter retires after this year, Columbus and LA will be penalized, while Pittsburgh is rewarded, and Philadelphia (who signed the contract, as well as Shea Weber’s) will be unscathed is ridiculously stupid all-around!
If Shea Weber retired early they will end the policy.
Retirement at 39 years old and it will cost Nashville 24 million in cap recapture.
Of course it’s ok that the Canucks are still paying for Luongo.
But you’ve pointed out how well managed the league is (Bettman).
Not really sure how these deals are any different than teams working out trades with expansion teams to pick certain players for draft picks in return.
Taylor Hall NBA’d his trade this year and that needs to stop.