Tidbits about the cap, straight from the CBA.
The upper limit cap for the 2006/2007 is $44 million, but a team is actually able to carry players against the cap and go over this amount. Having done a bit of research on the cap in the actual CBA (trying to get a better understanding of New Jersey’s situation), I wanted to share some things that are not necessarily common knowledge among hockey fans.
10% excess – From July 1st and “up to and including the last day of training camp,” a team is allowed to carry up to 10% above the cap. However, the day after training camp is over, the team must adhere to the actual cap and shed any of that 10% excess. This means that on opening night, you must be within the cap upper limit.
Long-term injuries – This is a technicality, in my view, because when a player and team follow under these guidelines, his averaged salary and bonuses is basically written off the cap. In actuality, the amount is still carried, and the team is given an exception to go over the cap by the amount of the injured player. The requirements are three: a) The Club’s physician must find the player unfit to play for at least 24 calendar days and, b) unfit to play in 10 NHL Regular Season games and, c) the club will acquire a player to replace the injured player.
Performance Bonus Cushion – There are limits as to the amount that a player can make in salary, and also bonuses, and bonuses do count against the cap (even if not attained). The kinds of bonuses that can be given are also specified, and lacing up skates is not one of them, although signing bonuses and other one-time bonuses do exist. However, in the case of the Performance Bonus Cushion, only Class A (individual) and Class B (league-wide) performance bonuses can be used to exceed the upper limit. The rule is that a team can exceed the cap by up to 7.5% of the Upper Limit, so long as the exceeding amount is in the sole form of performance bonuses.
Regular Season acquiring of players – I consider this measure cosmetic, because I understand the context and makes sense to me, but others look at it as going over the cap. It deals with how long the player acquired plays for the club during the season, and it is even illustrated with an example in the actual CBA about a player being acquired through waivers. The example basically states to suppose the cap is $40M, and that a team is carrying a total of $39M against the cap, but to consider that the team is exactly at mid-season with half of their games still left to play. Because they are in mid-season they are able to pick via waivers (not re-entry kind) a player whose yearly hit against the cap is of $2M. This is because since he will only play half the yearly games for the club, only half (of the yearly $2M) hit will count against the club’s cap. That makes the hit of only $1M and puts the club still within the cap. On paper, however if you do not take into account the amount of games played by the player, it looks like the team is carrying $41M and is over the example’s $40M cap.
35+ Retirements – This actually does not help you go over the cap, but the opposite. I was trying to understand how Malakhov’s situation really applied under the CBA after having been given plenty of contradictory hearsay. I found that there is a provision that basically states that the salary of a player does count against the cap if all of the following apply: a) The player’s present contract was signed by the player when he was 35 years of age, or older and , b) The contract is a multi-year contract and, c) The first year of the multi-year contract has been fulfilled. This is regardless if the player retires or plays for the club, or even in what league he plays. The only exception is retirement due to permanent injury. Even sending him to the minors, does not work, because the CBA states that in such case, you can write off $100,000 from the cap for that player, but the rest of his contract counts against the cap. Apparently this is the situation that Lamoriello is facing with Malakhov in New Jersey.
I have not read the entire CBA, and there could probably be more ways to exceed the cap that I have not discovered, but I wanted to share what I had learned with the ones who are interested about the subject.
You can find the CBA at the NHLPA site, by clicking HERE