NHL BUYOUTS TO SAVE SEASON?

Jason Gregor
December 13 2012 09:43AM

We've seen NHL teams buyout players before, but yesterday Larry Brooks had an interesting take on how the NHL could use a "sum-zero amnesty buyout program" that could ensure the owners don't spend more than the 50/50 proposal.

Brooks outlined some of the  teams who would either be over the new proposed $60 million cap or would need to sign 6-8 players for less than $3 million to stay under the cap.

Here is the main gist of Brooks' suggestion:  

Players bought out under this program before this season at either one-third or two-thirds depending upon their age could be re-signed only for the difference between the buyout amount and the full contract. The entire amount would count against the players’ collective share but the buyout team would not be charged a cap hit.

When a major league baseball player is picked up after being released, the new team pays only the league minimum while the original team is on the hook for the remainder of the contract. This would be similar in concept.

It would be a win-win. Players would be whole. The owners would collectively pay only what has already been committed. Some teams would add players at a bargain rate. And those teams caught in the transition vise would have at least a chance to comply without unwarranted suffering.

It is an intriguing option to look at. Of course some players would get bought out and never get re-signed, but some teams could get some very good players at a bargain price.

I know many of you will wonder if the Oilers would consider this, and the most likely candidate would be Shawn Horcoff. I'm not sure it would be wise for the Oilers to get rid of him, yet, but for here is a breakdown of what his buyout would cost.

If the NHL comes back with a 48 game season, that  would be 58.5% of an 82 game season. Horcoff was due $6 million and $3.51 million is 58% of that.

Adding the $7 million he is owed over the final two seasons of his contract, the Oilers would have to buy him at $10.51 million.

They would have to pay him 2/3 of that, so they'd owe him $7 million. The unknown would be if the player gets all of that upfront, or if it would be spread out over five years. To entice the player it could be a lump sum payment now, thus they could make interest on it.

That would mean that Horcoff would be allowed to make no more than $3 million from another team over the next 2 1/2 seasons. He'd be a steal of a deal for any team who wanted a solid 3rd line centre, who could moonlight as a 2nd liner if needed.

This proposal could make for some interesting signings in the first few weeks of the season. I'd be in favour of it. Would you?

DAY NINE

We raised over $4,100 yesterday thanks to Reese, Justin and Ryan. Big thanks to On The Rocks, Crowley's Jewellers and River Valley Health for the great packages.

Today we have a great GM/COACH package.

We will have CHEF's dinner courtesy of Von's Steakhouse and Oyster Bar. It will include all your beverages as well.

You and three friends will dine with Eskimos GM Ed Hervey, head coach Kavis Reed and Wall of Honour inductee and current head coach of the U of A Golden Bears, Chris Morris. I'll also be there, but mainly to fill up your wine glasses.

All the proceeds from today will go towards Santas Anonymous. Bidding starts at 2 p.m and goes to 5:55 p.m. You can bid at 780.426.8326 or 1.800.243.1945.

RECENTLY BY JASON GREGOR

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One of Canada's most versatile sports personalities. Jason hosts The Jason Gregor Show, weekdays from 2 to 6 p.m., on TSN 1260, and he writes a column every Monday in the Edmonton Journal. You can follow him on Twitter at twitter.com/JasonGregor
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#1 Mojo
December 13 2012, 09:53AM
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I agree, we still need Horcoff. For now.

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#2 RyanCoke
December 13 2012, 10:49AM
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Re-signed? Does that mean we can sign horcoff after buying him out? Or does the rule still apply that you can't re-sign a bought out player? The word re-sign is a little misleading in this option. I would just say the player can then be "signed" for no more than 1/3 his contract.

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#3 TigerUnderGlass
December 13 2012, 10:52AM
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One problem - it does't encourage moneyed teams from burying contracts in the minors.

Lets look at Horcoff. If the Oilers can afford to do either one, which is the better option in terms of competing:

a) Pay Horcoff 2/3 aqnd let some other team get a steal on a good player?

b) Put Horcoff in the minors, pay him, and keep him away from other teams so they cannot get a good player so far below market value?

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#4 james_dean
December 13 2012, 10:53AM
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If only I had 2000$ to dine with these fine gents

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#5 RyanCoke
December 13 2012, 10:55AM
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@TigerUnderGlass

Well with a new CBA, option 2 will likely be no longer an option.

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#6 TonyT
December 13 2012, 11:12AM
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If this were the case, I believe the decision to buy Horcoff out would largely be contingent on the length of the no penalty grace period. If like the NBA, the teams had one buyout without penalty to be used at any time over the course of the CBA, then the Oilers could wait. If temporary, buy him out now.

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#7 Walter Sobchak
December 13 2012, 12:00PM
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Confused Gregor.

You got me thinking and now my brain hurts!

I like the idea, however, is this not one of the major sticking points with the NHL right now?

Is this not "cap" circumvention and a deal breaker in the eye's of the NHL, this is what they are trying to get rid of, anything that manipulates the way contracts can be used to manipulate the cap, no? Wether it's back diving or getting out of a bad contract the NHL see's it as a manipulation of a hard cap. Hence the 5 years 5% that's on the table.

Or am I just reading to much into this? Is this meant to be a one off, one time only?

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#8 Will
December 13 2012, 12:23PM
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Uf, I know Horcoff's an overpay, but could you imagine that conversation between Lowe and Katz? "Hey, so um, that big contract I gave to Horcoff, ya I'm going to need you to sign a cheque for 7 mill in order for him to go play on another team."

With how stingy Katz is on the arena deal, how likely do you think it is that Katz says, "sure thing."

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#10 RexLibris
December 13 2012, 12:36PM
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Buy out Horcoff and replace him with a bought-out Gomez? It would cut the contract term down by a year, and save some money.

Interesting details to think about.

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#11 DieHard
December 13 2012, 01:00PM
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Maybe I'm taking this wrong but if the Oilers buyout Horcoff and then re-contract him and we save 4.5M on the cap.

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#12 Max Powers - Team HME Evans
December 13 2012, 01:13PM
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Would that effectively make the bought out player a UFA? he could have the freedom to join Detroit instead of NYI? Or would it work like waivers, where the less privileged and worst teams would have fist dibs. Does that even make sense?

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#13 Wigswag
December 13 2012, 01:19PM
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Horcoff is worth 3.something per season (which is what he will be paid because of the lock out). Salary cap may be an issue in the last year of his contract at which time you buy him out. Like the idea if we had cap issues though.

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#14 grip it and rip it
December 13 2012, 01:22PM
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Will wrote:

Uf, I know Horcoff's an overpay, but could you imagine that conversation between Lowe and Katz? "Hey, so um, that big contract I gave to Horcoff, ya I'm going to need you to sign a cheque for 7 mill in order for him to go play on another team."

With how stingy Katz is on the arena deal, how likely do you think it is that Katz says, "sure thing."

Wow My thoughts as well, everyone is very free when it it someones elses money, Horc is a poor contract but get over it. We have a third line center everyone would want if the dollar figures was not attached to it. Boy I wish hockey would start 8(

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#15 Truth
December 13 2012, 01:41PM
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Imagine this, the Oilers buy out every single player under contract and then re-sign them for the length of contract at the league minimum.

Even better, for the players you would want to extend, work an extension in with the difference made up over the length of the contract. Katz would have to open up the pocketbook but there would be major cap room for probably 5-7 years.

For example (I'm assuming if they buy a player out at 3/4 of his contract and then re-sign the player they would pay full value, or the other 1/4 when they sign him again):

Taylor Hall, current contract = $6m/yr x 7 yrs = $42M. Buy him out for $42M and then sign him at the league minimum (say 800k for 7 yrs). Cap savings of $5.2M/yr.

Ladislav Smid, current contract = $2.25/yr x 2 yrs = $4.5M. Say an extension would be in order for 3 yrs at $4M/yr. Buy him out for $4.5M, pay him $12M over 5 years in a new contract. Cap hit is 150k above his salary for the first two years and then $1.6M under average for the rest of the contract.

The players get all the money up front and save the team the cap hit to add other players.

They would never allow this to happen, but a guy can dream.

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#16 TigerUnderGlass
December 13 2012, 02:01PM
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Jason Gregor wrote:

One of the proposed new clauses in the CBA was that any player who makes more than $1 million and is in the minors would count against the cap.

Thus stopping teams from burying their mistakes in the minors. We'll see if that is part of the new CBA.

Agreed. This is likely, it's just a point that they need to make sure of. They weren't entirely thorough last time.

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#17 TigerUnderGlass
December 13 2012, 02:05PM
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Will wrote:

Uf, I know Horcoff's an overpay, but could you imagine that conversation between Lowe and Katz? "Hey, so um, that big contract I gave to Horcoff, ya I'm going to need you to sign a cheque for 7 mill in order for him to go play on another team."

With how stingy Katz is on the arena deal, how likely do you think it is that Katz says, "sure thing."

He paid Souray to play in the minors. Don't mistake negotiating hard for "stingy".

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#19 Quicksilver ballet
December 13 2012, 03:50PM
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All these years the players often claimed "it's not about the money" when signing a new deal.

The last three months have proven them all...... liars!

Like your idea Jason on buying out the overpaid peripheral players like Horcoff and Dubnyk.

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#20 DSF
December 13 2012, 05:05PM
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Quicksilver ballet wrote:

All these years the players often claimed "it's not about the money" when signing a new deal.

The last three months have proven them all...... liars!

Like your idea Jason on buying out the overpaid peripheral players like Horcoff and Dubnyk.

Hemsky's $5M might be worth a look too.

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#21 Gazmort
December 13 2012, 08:34PM
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@DSF

You're a Canucks expert, right? What about some albatrosses in that club?

Let me guess, all perfect value-for-money contracts on the Coast, right?

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#22 Oiler Al
December 13 2012, 09:10PM
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I dont think you can resign a player you just bought out?

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