After being asked by the esteemed James Mirtle about whether or not Chris Pronger counts as being 35 for the sake of his new contract and the cap implications that flow from that, I went and took a look at the specific provision of the CBA. It reads:
All Player Salary and Bonuses earned in a League Year by a Player who is in the second or later year of a multi-year SPC which was signed when the Player was age 35 or older (as of June 30 prior to the League Year in which the SPC is to be effective), but which Player is not on the Club’s Active Roster, Injured Reserve, Injured Non Roster or Non Roster, and regardless of whether, or where, the Player is playing, except to the extent the Player is playing under his SPC in the minor leagues…
It seems likely to me that he’s over the age of 35 for the purposes of this deal. There’s another thing that caught my eye though. This is from the section of the CBA that deals with “Averaged Club Salary” or, in English, how you calculate a team’s salary cap number. Pronger’s new deal pays him $7.6MM, $7.6MM, $7.2MM, $7.0MM, $4.0MM, $0.525MM and $0.525MM. My understanding of how these contracts work, which I think is the dominant understanding in the media, is neatly encapsulated in this bit from Puck Prospectus:
Over 35 Signings: If a player who, as of June 30 of the upcoming season, is over the age of 35 signs a multi-year deal, the signing team will take a cap hit for each year on the contract, regardless of if the player retires. For example, if Chris Chelios signs a 3-year deal worth $2 million per year, and retires after the first year, the signing team still takes a $2 million cap hit for the remaining years on the contract. However, since Markus Naslund’s 35th birthday was after June 30, he was 34 as of June 30, thus his retirement removes his cap hit.
The only problem is this: that’s simply not what the section of the CBA says. Look closely at the amount that’s counted: “All Player Salary and Bonuses earned in a League Year…” It then lists a bunch of circumstances in which a player might earn his money. In a straight retirement though, a player earns nothing. The use of the phrase “All Player Salary and Bonuses earned…” stands in stark contrast to the amount that’s used to calculate the cap hit for players who are on the roster - in that case it’s “The Averaged Amount of the Player Salary and Bonuses for that League Year…”, which is calculated in the usual fashion.
There’s an interpretive rule that lawyers use when interpreting contracts that basically holds that different language means something different; if the drafter meant the same thing, he would have said the same thing. If Pronger’s full cap hit was to be charged regardless of whether he retired and I was drafting the CBA, I would have written “The Averaged Amount of the Player Salary and Bonuses for that League Year” instead of “All Player Salary and Bonuses earned in a League Year…”
If asked to interpret the provision as it currently reads, my answer would be that, in the event Pronger retires and the Flyers pay him nothing, the cap hit is zero. If he retires due to injury, the cap hit is whatever the salary figure is, not the cap figure on his contract. I don’t know whether that interpretation correspond’s with the NHL’s interpretation or not, but legally, I think it’s pretty sound. If it’s accurate, it makes the Pronger deal a lot easier to understand.
So uh…
IS the Khabibulan deal frontloaded?
I was proud of myself for resisting the snark about that. According to Gregor, no.
I was shocked there wasn’t a mention of it.
Felt like it was just sitting there on a platter and not once touched.
… and that’s just plain stupid.
So does this mean that the NHL just somehow screwed up when they made this part of the CBA and that all the over-35 retirees shouldn’t count against the cap? Or am I still confused?
So, this is what the critics were talking about when arguing for the use of more plain language in the next CBA….
All I know is that when Tie Domi was bought out of the second year of his 2 year contract with the Leafs, the full amount of the second year was included in the cap for 2006-07.
From Elliotte Friedman: “Yes, its an Over 35 deal, and yes, every year will count against the Flyers cap even if Chris retires.” Impressed Daly was up at 6 am”
The way the deal is structured I was thinking Philly might move Pronger to a cap floor team in the last couple years of the deal, but turns out a) he also has a NMC and b) is a dick. Not sure what Philly is thinking with the term.
I would have to assume that Philly’s lawyers read that clause the exact same way you do. It’s the only way this deal makes any sense considering his NMC. But if this is the case, why wouldn’t the Devils have gone down this road in the Malakhov situation a couple of years ago?
Two points:
a) I think Tyler’s reading of this is correct, and the only thing that makes much sense.
b) Tyler’s reading seems to clearly conflict with established NHL precedent.
The line “regardless of whether, or where, the Player is playing” seems like the most relevant one here and (by my admittedly uneducated eyes) seems to contradict the previous statement about salary/bonuses earned - implying rather strongly that “cap hit” was what was meant.
As per Darren Dreger’s blog:
“If Chris Pronger retires with term and salary remaining on his contract after next season, does his money stay on the Flyers’ cap?
There’s some confusion today in Philadelphia over that simple question.
According to the NHL, the answer is yes. The seven-year, $35 million extension Pronger agreed to on Tuesday doesn’t commence until after June 30, 2010. Pronger will be 35 at that point and any remaining salary will remain on the cap.
The Flyers disagree and interpret the CBA language governing the “over 35″ clause differently.
Sources say the Flyers’ lawyers are now aware of the league’s stance and are debating this issue.
Chris Pronger turns 35 on October 10, almost a full year before his seven-year extension with the Flyers kicks in.”
One of the Boston bloggers over at SBNation pointed out that the Bruins may have made a similar error with Tim Thomas, otherwise the date they signed him on makes no sense.
Interesting, but what explains how the NHL treated Tie Domi and Shawn MacRecran (sp?)
Jonathan;
I don’t know if Boston made a mistake there. They had a pending free agent that had a vezina season that just happened to be turning 35. The signing date makes sense if you consider they got him extended prior to the start of the playoffs. One less distraction and all that.
If they had actually Pronger’d the deal they probably would have structured it the same. Longer years, front loaded with the assumption of the players retirement prior to the end of it.
As for Philly, the biggest mystery to me is why I continue to assume that GM’s and their staff have some genius insight that I and other fans must be lacking.
The language in this is brutal. To the over 35 thing, I mean: “…which was signed when the Player was age 35 or older (as of June 30 prior to the League Year in which the SPC is to be effective)” - those are two concepts that aren’t necessarily the same.
Awesome that the Flyers are going after this. Shame that the Tambo and the Detroit Model apparently didn’t consider it.
@JW: You might be right about what they meant. It’s incredibly sloppy drafting though if that’s what they were trying to do. Same concepts should be expressed in the same language. That’s first year contract law.
This is incredible.
In your spare time you checked on what the Flyers and front office lawyers never bothered to check on themselves, even though a $5 million cap hit on a 42 year-old is something you’d think they’d want to clarify.
Tambellini. Tallon. And now the Flyers… These teams are run by schmucks.
Rick:
All I’m saying is that Boston may have been interpreting the rules the same way that Philadelphia evidently did; otherwise you’d think they’d wait until after the playoffs rather than conducting a contract negotiation down the stretch. JMO.
Jonathan;
And you may very well be right, I was just offering up a second perspective.
The structure of Thomas’s contract suggests to me that it’s a legit deal. Boston could have added 1 mil and 2 years to it and brought their cap hit down by 1.5 mil. As it is right now, if they are expecting cap relief by Thomas retiring part way through, they didn’t exactly provide an incentive for him to walk away from his last year or two.
If Boston was interpreting it the same way Philly did then they should be really critisized. Not only would they have been wrong but they are paying a premium from a cap perspective while doing so.
At any rate, it’s not really worth arguing over.
Pronger’s new deal pays him $7.6MM, $7.6MM, $7.2MM, $7.0MM, $4.0MM, $0.525MM and $0.525MM.
MC, isn’t there a clause in the CBA that restricts such payment structures? Something about average salary vs. minimum annual, or maximum reduction in salary from one year to the next. I’m certain there is, but I can’t remember the rule.
Does this contract qualify as legit on that structural basis?
Spoiler:
It can never decrease by more than 50% of the average of the first 2 years IIRC.
So $7,600,000 / 2 = $3,800,000.
Never does.
It all depends on what the meaning of “earned” is.
The intent of the provision and established precedents certainly suggest an understanding of what was meant.
This dispute really doesn’t involved the NHLPA since Pronger is going to get his money. The dispute will be between the league office and a member team. The Flyers can’t grieve the NHLPA.
How do disputes between the league office and a member team get solved, with regard to interpretation of league “rules”? Is Gary Bettman “God”?
Thx, PDO. That sounds right to my ear too, and if it is the case, he’s okay. Good memory.
Still, when we look at the structure, the length, and the inquiries on retirement, this contract seems deliberately intended to circumvent something the CBA was trying to restrict.
That is, creating a contract meant to lower a cap hit on a player likely to retire before the contract’s term ends. I.e. using retirement to manage the cap.
The language in this is brutal.
Yep. The use of the word ‘earned’ was a very bad idea. If Chris Pronger doesn’t play any hockey or get paid any money, then no salary/bonuses have been earned by him. No amount of torturing the English language can make it otherwise.
The hitch, I suppose, is that this straightforward interpretation causes the entire clause to crash in on itself — it’s meaningless. What’s the interpretive rule for that, Tyler? (i.e. is it something like, “Since this clause is nonsense on its face, but must have been inserted for a reason, let’s figure out what the most likely reason is, and interpret it accordingly.”?)
How do disputes between the league office and a member team get solved, with regard to interpretation of league “rules”? Is Gary Bettman “God”?
In essence yes. The league ruled against he Leafs in the Frogren signing bonus issue last year fining them something like $500,000 and a first round pick. Now the Flyers won’t be fined but they will likely be forced to keep Prongers salary cap hit on the books.
if the drafter meant the same thing, he would have said the same thing
I work on a theory that a maxim like that goes out the window when a contract is drafted by committee.
The hitch, I suppose, is that this straightforward interpretation causes the entire clause to crash in on itself — it’s meaningless. What’s the interpretive rule for that, Tyler?
You’re right Matt - there’s an interpretive principle that clauses mean something. With that said, it looks to me like this clause still means something, even if you interpret it as I suggest. There is, of course, also the argument that the amount to be applied to the cap hit is the actual dollar value from that year which, while not ideal, still beats the $5MM hit.
In essence yes. The league ruled against he Leafs in the Frogren signing bonus issue last year fining them something like $500,000 and a first round pick. Now the Flyers won’t be fined but they will likely be forced to keep Prongers salary cap hit on the books.
I don’t agree with this. There are provisions by which the commissioner’s discretion can be reviewed.
Probably more pertinently, it’s in the PA’s interest to have contracts like Pronger’s disappear when he retires. They have an interest in strong teams in good markets. They also have an interest in getting as much freedom as possible for their players. The interpretation I’ve suggested is, in my view, favourable for the PA.
The precise mechanics of it are a bit difficult. If I was the Flyers, I’d consider asking the NHL for a ruling and then offering to indemnify the PA if they were willing to grieve it.
Still, when we look at the structure, the length, and the inquiries on retirement, this contract seems deliberately intended to circumvent something the CBA was trying to restrict.
The problem with the circumvention argument is that you see it raised a lot by people when they think that something goes against the spirit of the CBA, even though it’s technically legal. That’s an argument that laypeople prefer, I think.
I’ll take a closer look at the CBA at some point and see whether it has a clause providing that it’s the entire agreement and no parol evidence is admissible.
Article 33 might be problematic. “…each party may offer testimony of conversations between them which informed their respective understanding of their provisions of this Agreement (i.e., “bargaining history”) and may refer to the notes, including any notes that were marked on drafts of this Agreement…in any grievance arbitration or other proceeding in which such testimony may be considered relevant.”
That’s an interesting provision. It seems to me to create a lot of uncertainty - you’re going to end up with situations where people have conflicting notes, etc. It certainly muddies the waters on the point that I’m driving at.
Of course there may very well be a new CBA when any dispute arises.
I wonder how Prongers agent (Meehan I think?)interpreted the clause?
Not that he is obliged to do Philly’s work for them but clearly from how the deal was structured it was apparent what Philly’s intent was when they offered it.
Is it interesting that most of the discussion, Dreger, Cambell, and the Flyers’ apparent issue regarding the application of the CBA to the contract, focuses on the “is this an over 35 contract” question, which I think is answered pretty clearly by the CBA, but the bigger question of how do we treat cap hits for retried over 35-year old players/contracts is basically unaddressed or assumed to be the Puck Prospectus take on it?
I strongly agree with Tyler here, it’s really difficult in looking at the CBA to come up with a persuasive argument for treating these contracts in the normal Averaged Amount fashion. The “Averaged Amount for Player Salary and Bonuses” and “All Player Salary and Bonuses earned in a League Year” for retired 35 year olds are in the same section. It’s an enormous stretch and would indicate beyond incompetent drafting to suggest they mean the same thing. I’m pretty sure this originally came up with Malakhov’s retirement; why did we think his contract would count against the cap for the length of the term back then? I would have thought that Lamoriello would have raised a fight on this, wasn’t he in the drafting sessions? He lost a first round pick in submitting to a contract interpretation that is not supported by the contract’s language.
Also, @PDO/spOILer: just an FYI, it’s not the average of the 1st two years, it’s the lower of.
Kipper’s contract starts with $8.5M/$7M and ends with $5M/$1.5M.
Thx, Matt.
26.3 seems like it gives a pretty broad residual power to the league for these sorts of questions.
Only if it can be deduced that the NHL/media/consensus view on the treatment of cap hits for retired players who signed their contracts at 35+ is supported by the provisions of the Agreement or the intentions of the parties as reflected in the provisions of the Agreement. I just don’t think that’s the case. Much like the Thelen arbitration order (the same one that made Wheeler a UFA), I’m not sure any of this is represented within the four corners of the Agreement. I could certainly be missing something though. It certainly could be what the parties intended (it certainly should be what they intended), but I don’t think that intention is reflected in the Agreement at all. Quite the opposite, actually. I’m just piggybacking on what Tyler said here. I think some of what he says is pretty obvious (of course the Oilers have no plan and signing Khabi was a monumental mistake no matter how he plays next year, my guess is he’ll have a good year), but this is a brilliant spot here.
I think some of what he says is pretty obvious (of course the Oilers have no plan and signing Khabi was a monumental mistake no matter how he plays next year, my guess is he’ll have a good year), but this is a brilliant spot here.
The former is probably more controversial than the latter.
Dan Tencer tackled this issue this week on CHED, discussing it with an HNIC broadcaster whose name I can’t recall. In any case, they are confident that PHI will be on the hook for the full cap hit if Pronger retires with two years left.
I mean sure, you’ve provided fancy “evidence” and “read the CBA”, but this is Diamond Dan Tencer for crying out loud. I mean I’m sure Dan would have read the relevant sections of the CBA as well if he wasn’t so darn busy interpretting the CBA for his listeners.
So I don’t know what to think here. I suppose that, like most thinking Oiler fans, I’ll just have to wait until Gregor and Staples weigh in with their sparkling insight.
The key clause in there is “which was signed when”. If it is irrelevant when it was signed, then the word signed would not have appeared. It would have been replacement with like “which is payable when”, or some such. That the word “signed” is in there makes it very clear that when he signed matters.
As for “earned”: since in the CBA they give a specific example as to exactly what happens and what it means for “earned” this overrides whatever Webster’s defintion of earned there is.
This is the difference here. The word “signed”, without a contravening definition in the document itself will take on the definition that a reasonable man will take.
As for “earned”: since in the CBA they give a specific example as to exactly what happens and what it means for “earned” this overrides whatever Webster’s defintion of earned there is.
Where is this Tom? As far as I see from the CBA, it uses earned in the Webster’s sense. When they want to talk about the cap hit, they talk about “Averaged Amounts”, which is a defined term.
The key clause in there is “which was signed when”. If it is irrelevant when it was signed, then the word signed would not have appeared. It would have been replacement with like “which is payable when”, or some such. That the word “signed” is in there makes it very clear that when he signed matters.
I’m not sold on this point. We know that the intent was to deal with contracts signed when a player was over 35 - if a guy signs a seven year deal at 30, he’s not supposed to be caught by this rule. So it should read “signed” instead of “payable”. This is not well drafted - I don’t think anyone would argue that - but I think the NHL’s preferred interpretation here is more tenable than it is with “earned”, subject to your comments about where I find the definition.
The former is probably more controversial than the latter.
I think the latter is - or rather would be if people other than the small pocket here knew/cared about this - pretty controversial, in that I’ve never heard anyone suggest that the Puck Prospectus take on retired players is dead wrong. But I’m not sure how anyone can read 50.5(d) and conclude otherwise. I’m assuming that the league sent out a memo around the time of the Malakhov debacle and explained its position with respect to retired, over 35′ers and provided its interpretation of 50.5(d)(i)(B)(5), possibly with some parol evidence, and without any significant NHLPA interest to countervail (retirees ain’t getting paid either way) and with the teams being generally weak and subservient to the league’s mandates (NYR and TML notwithstandin), that was that.
I still can’t find anyone else talking about this issue (it seems, though I certainly don’t listen to or know who Dan Tencer is, that all the major pundits are talking about the over 35 issue and the “as of June 30 prior to the League Year” language, which is fairly obvious and significantly eclipsed by this point), and I say this is controversial and interesting as all hell. It’s a fairly moot point as this is clearly not how the NHL and its teams interpret 50.5, but I’m damn jealous - though somewhat thankful because it would have driven me nuts - that I didn’t find it first.
Tyler
I’m not sure if this is a dumb point, but:
I get that ‘averaged amounts’ should’ve been used in this clause and that there is some wiggle room for Philly to fight here. But I’m not sure that, as you suggest, a retired player doesn’t ‘earn’ the salary laid out in his contract. He just doesn’t get paid what his contact says he earns.
That is, on one reading, the Webster’s definition of ‘earned’ does seem to suggest that a retired player, who isn’t having money transfered into his account isnt ‘earning’ anything, even if his contract suggests that if he were to play he would be paid X amount of dollars. On this reading ‘earned’ is synonomous with ‘paid.’
But, on another reading, ‘earned’ has a broader, more subjunctive, more counterfactual meaning than ‘paid.’ For example, suppose I get asked how much I earn. I might say I earn 1,000,000 (hahaha) a year, even if there are all sorts of conditions on my salary such that I might never get paid the full 1,000,000. Say, if I’m sick too often, etc.
I admit this is a stretch, but in natural language, people do talk about their ‘earnings’ this way, i.e. in reference to how much they would make only in certain circumstances. And it’s not unreasonable to think that when a player signs a multi-year contract, his ‘earnings’ are defined for each year, and even if he doesn’t hold up to his end of the bargain by playing, those are still, in one sense, his earnings.
I will concede that that’s a plausible interpretation. I am sure that Philly is prepared to suffer the $525K cap hit for the last two years on Pronger’s contract. There is, however, just no way of getting from there to a ~$5MM cap hit that I can see.
I could be venturing into completely foreign territory here but what happens if Philly opts for a buy out in those final years? It’s not as advantageous as paying him nothing but wouldn’t that ensure against having $5 million in dead cap space?
Whoops, nevermind. Just saw that under the CBA the “normal” buyout rules do not apply to players signed at age 35 or over.
The parenthetical comment in the CBA is there only to establish when the age is established: i.e., his seasonal age. It’s to say that on Jun 30, of any given year, what is that player’s age.
Indeed, they would have been better off having a glossary that shows “age” and says “for cap purposes, when we discuss age, we determine the integer to be as of Jun 30 of whatever year we happen to be discussing”. That’s the purposes of the parenthetical statement. It is NOT there to try to distinguish between “when he signed” and “when it the contract effective”.
As for the illustration, I’ll tell you on Monday, but there are a couple of references where they tell you exactly what happens when a player retires.
50.2(c) deals with calculating Actual Club Salary, which is real dollars, not cap hit.
50.2(c)(i) includes “The aggregate Player Salaries and Bonuses paid or earned for that
League Year for all Players on the Club’s active Roster, Injured Reserve, Injured Non Roster and Non Roster”
So there is a distinction made between “paid” and “earned”.
Oddly enough, 50.2(c)(iv) includes all salary earned by players signing deals after 35 in Actual Club Salary. That means that the 35+ rule actually affects the escrow situation, since it’s counted as a dollar paid by the owners.
But yeah, considering that 50.2(c) deals with calculating real dollars, and the definition from 50.2(c) is copied verbatim into 50.5, and considering that ‘Averaged Amount’ is used not 10 lines above… I don’t see how the league can argue that the two are the same.
Look at p.189 (50.2.C.2.ii), which is the section for Performance Bonuses:
“Players aged 35 or older as of June 30 prior to the league year in which the SPC is to be effective, who have signed a one-year SPC for that League Year”
Now, this part is unambiguous. It establishes when the integer of his age is calculated (Jun 30, 2009 for the upcoming season), and it is for the upcoming season (because it says “effective”), and it says that he signed a one-year contract for that particular season (without saying WHEN he actually signed it, be it Jul 1, Jun 29, or three years ago he signed a one-year extension).
This is not at all what we see one page later which specifically says “which was signed when the Player was age 35 or older”. The parenthetical part that follows that statement is there ONLY to tell us how to calculate someone’s age. The parenthetical part applies only to the age part of the clause and not to the entirety of the clause.
If it applied to the entirety of the clause, then it would be in conflict with the “which was signed when” part. If it applies only to the “age 35″ part (which is to say how do you figure a player’s age), then it is unambiguous. Seeing that on page 189 they make it very clear that the purpose of the “June 30″ is to determine that’s when you calculate his seasonal age, and seeing how they did not duplicate the wording of the entire clause of page 189 to page 190 (which they could have), then the key phrase on page 190 is “which was signed when”.
If it was irrelevant when he signed the contract, then page 190 would look like page 189. It does not. In order to make this agreement unambiguous, then you have to apply the parenthetical part of p. 190 to mean only the seasonal age calculation, and you must maintain the “which was signed when” clause literally.
***
To answer a previous issue: On p.203, it says “and regardless of whether or where the player is playing”. Since they explicitly handle the retirement scenario in the illustration, this overrides however you want to define “earned”.
I don’t agree with that interpretation. From where I’m sitting, a player can be earning money even if he’s retired. If, for example, he retires due to injury and keeps getting paid, it seems to me that that would fit. Or if the team just sends him home and keeps paying him.
Even if I concede your point though, that seems to me to put Pronger’s cap hit at $525K for the last two years of his contract. That’s what he’ll be earning, NOT $4.9MM or whatever the cap hit is.
If a player officially retires, he does not get paid. If he’s on the DL, he is not retired. Regardless, the provision “and regardless of whether” is a catch-all. The guy who signed a 2+ year deal when he was over 35 and then retires in the middle of that is a cap hit, regardless if he retires for injury or Russia or whatever.
***
Elsewhere in the document, the cap hit is determined specially as the average annual salary, not what he is actually paid or earned. Again, these terms are superceded by the illustrations.
If your suggestion is that the actually salary being paid at age 35 and over counts separately from the pre-35 salaries, then I’d like to see your page reference for that. This would affect Hossa and several other players. I didn’t see anything in there that made me think that, but neither was I looking for something with this scenario in mind.
i’m probably past the time where this reply matters, but if this is the case, why didn’t the devils force vladimir malakhov to retire? malakhov never retired - i’m not sure he has officially retired even now. malakhov didn’t get paid in 2006-07, either, so i see no benefit in him staying not retired or retired.
and as tango says, a player who retires is no longer getting paid - e.g. derian hatcher retiring this summer. mike rathje has yet to retire, he hasn’t played a game since 2007, but he’s still under contract and still being paid.
i recall back when this all went down in 2006, i was also harping on the word ‘earned’, i.e. if he ‘earns’ nothing, this shouldn’t apply. so either lou lamoriello didn’t push this hard enough, or no one noticed this possible byzantine parsing. either way, i hesitate to think that in the 10 months between malakhov’s initial suspension and his trade to san jose that no one noticed the possibility of this.
thanks for the catch. I’ll get in there and fix it….
Пет начина да направиш св. Валентин незабравим
Rewriting the Word of God