I wrote a post last summer after the Maple Leafs signed David Clarkson in which I commented on the odd structure of his contract, in that it shifted a lot of dollars from salary and towards signing bonuses. My theory, based on the Vincent Lecavalier buyout, was that this provided Clarkson with buyout protection, in that the Leafs could only buy out the salary and not the signing bonus, making a buyout of Clarkson kind of useless. Here’s how Clarkson’s deal is structured:
For whatever reason, this was controversial and it’s bubbled up again lately. I have done some honest to goodness journalism and checked with an industry source who I trust. Here’s what he has to say:
Here is the relevant section from the Standard Player’s Contract regarding buy outs:
If the Club elects to terminate this SPC pursuant to this Paragraph 13, it shall be obligated to pay to the Player, in equal semi-monthly installments, to be paid in accordance with the payroll payment schedule applicable to the Club’s Active Roster, over twice the remaining term of the SPC (the “Buy-Out Period”):
(i) if the Player is under 26 years of age at the time the termination is effective, an amount equal to 1/3 of, or
(ii) if the Player is 26 years of age or older at the time the termination is effective, an amount equal to 2/3 of the total fixed amount of the Player’s Paragraph 1 NHL Salary, for the unexpired fixed-term of this SPC, reduced by any advance payment of Paragraph 1 Salary received by the Player prior to the date the termination is effective.
So, only Paragraph 1 salary is subject to the buyout, the signing bonus is protected and there should be no 2/3 cap relief for the Leafs on the signing bonus.
That’s how I read it too.Email Tyler Dellow at firstname.lastname@example.org