I need more Cups. The distant future is no longer that distant. When 2019 rolls around Toews, Kane, Seabrook and Crawford are all going to be in their 30’s and collectively counting for $40mm against the cap. And that’s before we dive into the issues that Marian Hossa’s ridiculous contract might present.
Before the 2013 CBA, teams were handing out these extremely long contracts in order to circumvent salary cap issues. In cases like Hossa’s, teams would front load the salary on contracts while stretching out the cap hit on the length of the deal. Hossa earned $7.9mm/year in salary in the early years of his contract with a relatively low $5.3mm cap hit. Because the contract is twelve years long, the Hawks stretched the cap hit equally throughout the length of the contract and suffered minimally in relation to the salary Hossa was earning. Which allowed them to sign better players and win Cups because even though Hossa’s contract value was high, his cap hit was low. In 2016-17, Hossa is only earning $4mm but his cap hit is still $5.3mm and will remain that much until he’s 42.
When the teams created these long deals they were holding on to the glimmer of hope that a player would retire, thus freeing up that cap space they were now stuck with. Well, after the 2013 CBA Bettman basically gave the middle finger to every GM that took advantage of that loophole. There is now something called the cap recapture penalty. Yes, it sounds like a Schoolhouse Rock song but trust me, it’s not nearly as fun. If a player retires before their contract is up, any positive difference in total salary paid and accumulated cap dollars paid will be distributed through the rest of the contract. Second City Hockey did a great analysis on Hossa’s situation if he would’ve retired last year:
If Hossa retires following the 2015-16 season, he’ll have earned $55.3 million with an accumulated cap hit of $36.925 million during his contract with Chicago. That difference, which comes to $18.375 million, would be distributed over the next five years — the remaining term of his contract — onto the Hawks’ books. So if Hossa retired after this season, the Hawks would have an annual cap hit of $3.675 million on their books through the 2020-21 season.
So at some point it’s possible the Hawks will be paying for a player who isn’t on the ice. Prior to 2013, it would’ve benefited teams if players retired before their contract was up, but the CBA completely reversed that. And by the way, most of the contracts for the core players are structured this way. Look at the cap hits towards the end of the contracts for Keith, Seabrook, Kane, and Toews. Because they earned most of their money at the beginning and the cap was spread evenly, there are potential dark days ahead financially for the Hawks if every player doesn’t remain dominant well into their 30’s. In 2020 the Hawks will be paying dearly for these contracts, but there’s no turning back. Win now!