Possible NHL Salary Cap Recapture Candidates

by | Aug 27, 2017 | Soapbox | 3 comments

If Henrik Zetterberg retires in two years, the Detroit Red Wings could face salary-cap recapture penalties.

Detroit Red Wings captain Henrik Zetterberg’s recently expressed doubt that he would still be playing when his contract expires in 2020-21. If he officially retires before then, the Wings would be tagged with a salary-cap recapture penalty.

On Jan. 28, 2009, the Red Wings signed Zetterberg to a heavily front loaded 12-year contract in order to garner a lower annual salary-cap hit. Such contracts were a notable loophole in the NHL collective bargaining agreement of the time.

Under the current collective CBA, however, salary-cap recapture penalties were imposed against the teams who signed players to those lengthy, front loaded deals. The later a player retires, the more expensive the cap-recapture penalties. 

We’ve already seen the effects of salary-cap recapture. In 2015, the Los Angeles Kings terminated the contract of center Mike Richards, which was due to expire in 2020. They were tagged $1.32 million annually for the remaining tenure.

Zetterberg, who turns 37 in October, said he probably only has a couple of seasons left in him, meaning 2018-19 would be his last. Unless the Red Wings are able to place him on long-term injured reserve or find some other creative loophole in the CBA, they’ll be on the hook for $5.5 million annually in salary-cap recapture penalties for the remaining two years of his contract. 

The Wings won’t be able to avoid it by shipping Zetterberg to another NHL team. Because he’s now into the latter half of his contract, Detroit will incur the full recapture penalties.

Zetterberg is among a handful of notable active players still on contracts signed under the previous CBA that evade the eight-year maximum of the current agreement.

While with the Nashville Predators in 2012, Montreal Canadiens defenseman Shea Weber signed a 14-year contract offer sheet in 2012 with the Philadelphia Flyers. The deal, which expires at the end of 2025-26, was matched by the Predators.

Chicago Blackhawks defenseman Duncan Keith inked a 13-year contract that began in 2010-11 and expires after 2022-23.

Washington Capitals left wing Alex Ovechkin’s 13-year deal began in 2008-09 and runs through 2020-21.

Zach Parise and Ryan Suter signed identical 13-year contracts with the Minnesota Wild in 2012. Their deals both expire at the end of 2024-25.

Pittsburgh Penguins captain Sidney Crosby re-signed a 12-year deal commencing 2013-14 that expires at the end of 2024-25.

Marian Hossa joined the Chicago Blackhawks on a 12-year contract beginning in 2009-10. The final season is 2020-21.

While with the Vancouver Canucks in 2010, Florida Panthers goaltender Roberto Luongo re-signed a 12-year deal commencing in 2010-11 and runing through 2021-22.

Detroit Red Wings forward Johan Franzen re-signed an 11-year deal beginning in 2009-10 that stretches through 2019-20.

While a member of the Philadelphia Flyers in November 2010, Los Angeles Kings forward Carter signed an 11-year contract extension beginning in 2011-12 and running through 2021-22. In June 2011, he was traded to the Columbus Blue Jackets and in February 2012 was acquired by the Kings.

Soon after being traded in June 2012 from the Pittsburgh Penguins, center Jordan Staal signed a 10-year deal with the Carolina Hurricanes. It expires at the end of 2022-23.

In 2010, Washington Capitals center Nicklas Backstrom re-signed a 10-year contract with the Capitals that expires at the end of 2019-20.

Following the LA Kings first Stanley Cup championship in 2012, goaltender Jonathan Quick re-signed a 10-year extension commencing in 2013-14. It will expire following the 2022-23 campaign.

If these players retire before the expiration of their current contracts, the teams that signed them will be subject to salary-cap recapture penalties.

Most of those clubs, however, will likely avoid that fate. Carter (32 years old), Quick and Ovechkin (both 31), Backstrom (29) and Staal (28) seem unlikely to retire before their current deals expire within the next six years.

Franzen’s playing career was ended by concussions but he hasn’t officially retired. The Wings annually place him on long-term injury reserve to get salary-cap relief at the start of each season. Unless they trade Franzen’s contract, they’ll continue putting him on LTIR until it expires in 2020.

Hossa will miss the upcoming season due to a skin condition exacerbated by his equipment. The Blackhawks will place him on LTIR. If it persists and forces the end of his career, they’ll keep him on injured reserve for the remainder of his deal.

The contracts of Weber, Keith, Parise, Suter, Crosby and Luongo, however, could become problematic for the teams that signed them.

Weber, 32, will be 40 when his current deal expires. Assuming he retires within the final three years, the Predators could see cap-recapture penalties ranging from over $8 million annually to $24 million.

Luongo is now 38. As James Mirtle noted in 2014, his cap-recapture penalties could get really ugly for the Canucks if he retires within two years of his contract end date, ranging from over $4.2 million to $8.5 million. The Panthers will also be penalized, but at most they’ll get tagged with $1.4 million annually if he retires next year and $1.28 million if retirement is in 2019. In 2020, it would be only $73K and nothing in the final year of his deal. 

Parise (33) and Suter (32) still have eight seasons remaining on their respective deals. If one of them retires in 2020, the cap recapture is over $3.9 million for each of the remaining years. If one or both retire in 2021, it jumps to over $5 million annually. 

While both could continue playing beyond 2021, it’s not a certainty they’ll reach 2025, when their contracts expire. If they retire with two years left on their deals, the cap recapture penalties will be over $6 million annually.

Like Parise and Suter, Crosby’s contract also expires in 2025. As he just turned 30, his chances of completing his contract are better than his two counterparts in Minnesota. However, if he packed it in with three years left on his contract, the Penguins could be on the hook for over $5 million per season.

The 34-year-old Keith has six seasons remaining and will be pushing 40 when it expires in 2023. If he retires before the final season of his contract, the Blackhawks would be penalized $4 million

Given the conditioning of today’s NHL players, most on this list could keep playing throughout the remainder of their respective contracts. Some could join Franzen and Hossa on LTIR.

Still, some could face the possibility of an early retirement, perhaps becoming costly to their current team’s cap payroll.

 








3 Comments

  1. Lyle. In this paragrapgh you imply cap recapture penalties some how relate to years spent with which team?

    “The Wings won’t be able to avoid it by shipping Zetterberg to another NHL team. Because he’s now into the latter half of his contract, Detroit will incur the full recapture penalties.”

    If Weber only played 5 of the 14 years then wouldn’t he be Mtl’s problem not Nashville’s?

    • Cap recapture hurts the team that received the benefit of the contracts structure against the cap. So Zettrberg is now making less than his cap hit, meaning all of the benefit has been received by Detroit, so no matter what, they are the only team that will take a penalty.

      Weber’s contract is a little different, as it was traded while there was still some cap benefit left, but it is very little compared to the remaining years of the deal. So there is little to no chance Montreal faces too much in cap re-captures. If Weber retires before the cap benefit Montreal received is recaptured naturally, it will be with enough years to spread it out over that it won’t be a large penalty, it it’s later, there will be no recapture.

      The Predators have doubled down on the issue in a way. Since they no longer have years where they will pay Weber less than his cap hit, they basically locked in a cap benefit that will get divided out amoungst his remaining term when he retires.