When will Nino Niederreiter sign? Understanding your CBA

Note: This is CBA navel-gazing -- not breaking news -- so please do not interpret the topic choice as any indication something is afoot.

We've all speculated about the upcoming season's permanent home for top 2010 Islanders draft pick Nino Niederreiter. When we polled visitors here last week, about 70% of us expect (or hope) he'll spend the majority of this season back with his WHL squad in Portland. Something that occasionally comes up in these discussions is: "Wait, he doesn't even have a contract yet. How do we know he'll even get one regular season game in?"

And it's true: We don't know. In fact, that's a potential reason not to sign him until they're sure he's ready for at least a regular season trial. As with Calvin De Haan last year, when he stuck with the club through most of camp but didn't sign until May 2010, there are team incentives to wait. In contrast, older draftees such as Josh Bailey, who didn't sign until the end of camp in 2008, have their own incentives to wait.

Thanks to birth dates -- and what I assume is the CBA's attempt to mitigate the whims of Fortune's Wheel deciding when you were born -- those situations are different. But explaining why entails diving into the CBA (after the jump), where being born after Sept. 15 makes you wait till next year to be drafted -- but gives you a small slice of leverage when signing your first contract.

Note: If I've overlooked something (always possible with the CBA) or misinterpreted something (always possible with both humanity and the CBA). do let me know and I'll correct it. It's not like this is some place where a book-peddling columnist can take potshots without understanding (or bothering to look at?) the contracts he's talking about, with little incentive to correct the record.

First, a repeat of one given in any discussion like this: Entry-level contracts for top-of-the-draft picks are usually largely formalities. There is definitely wiggle room, but the top 1-3 picks will always get max rookie salary as well as max or near-max bonus possibilities, with the triggers for those bonuses varying. We've seen that with Taylor Hall and Tyler Seguin this summer, we saw it with John Tavares last summer -- all of them got $900,000 base salaries, the rookie max for 2009 and 2010. (In 2011 the max goes up to $925,000.) Those guys are going to play in the NHL in their draft year, no question, so the team can make some free news in the summer by signing them.

Get lower in the first round though, and it's not so clear. If a player might not play in the NHL his draft year and his birthday fits in a certain range, the team might want to wait just a moment -- or the player might, too.

As many note, Nino Niederreiter only turns 18 this week. He's young by draft standards -- essentially, almost a year younger than Tavares and Bailey were when drafted -- and with his rare route to the spotlight, young in hockey years.

How Old Is Nino?

9.2 Age of Players. As used in this Article, "age," including "First SPC Signing Age," means a Player's age on September 15 of the calendar year in which he signs an SPC, regardless of his actual age on the date he signs such SPC.

Nino turns 18 this week, Sept. 8. So for the clauses that follow, he's already 18. As we'll see later, even though John Tavares and Josh Bailey were also still 18 by Sept. 15 of their draft years (everyone has to be), their late birthdays change how the CBA says the Islanders could do with them if they waited.

 

The 9-Game Trial

Here's the rule almost all of us know, from Section 9-1 of the CBA. I will bold stuff of particular relevance:

(d) (i) In the event that an 18 year old or 19 year old Player signs an SPC with a Club but does not play at least ten (10) NHL Games in the first season under that SPC, the term of his SPC and his number of years in the Entry Level System shall be extended for a period of one (1) year, except that this automatic extension will not apply to a Player who is 19 according to Section 9.2 by virtue of turning 20 between September 16 and December 31 in the year in which he first signs an SPC. Unless a Player and Club expressly agree to the contrary, in the event a Player's SPC is extended an additional year in accordance with this subsection, all terms of the SPC, with the exception of Signing Bonuses, but including Paragraph 1 Salary, games played bonuses and Exhibit 5 bonuses, shall be extended...

We know that if Nino signed but didn't play more than nine games, the start of his contract would just be bumped forward a year. Consequences: He would still get his signing bonus now, but the rest of his salary would be deferred until next year (if he played 10 or more games), or the following year (if his time in the Entry Level System were extended again). Wait -- they can do it the following year, too? Yes:

 

Bumping Forward (Extending SPC pursuant to blah blah blah)

If Nino signs this month, doesn't play 10 games -- and then doesn't play 10 games in 2011-12 either, what happens?

(d) (ii) In the event that a Player signs his first SPC at age 18 and has had his SPC extended pursuant to Subsection (i), and such Player does not play at least ten (10) NHL Games in the second season under that SPC, then the term of his SPC and his number of years in the Entry Level System shall be extended for one (1) additional year...

So Nino, who is about to turn 18 but is already 18 for the purposes of the CBA, could sign this month but still not have his ELC kick in until 2012-13. This probably isn't news to any of you.

 

Happy Birthday

However, the Islanders could also wait to sign Nino until CBA age 19 (i.e. in calendar year 2011), and they'd still have the ability to defer the start of his ELC for two years after the signing. In contrast, they could not have done this with John Tavares or Josh Bailey. You may have overlooked it, but there was a clause up in 9-1 (d)(i) that separates Nino (born Sept. 8) from Tavares (born Sept. 20) and Bailey (born Oct. 2):

...except that this automatic extension will not apply to a Player who is 19 according to Section 9.2 by virtue of turning 20 between September 16 and December 31 in the year in which he first signs an SPC.

In other words, if the Islanders signed Tavares last year but didn't play him more than 9 games (pretend he was a less-certain "NHL ready" player), they could have still deferred the start of his ELC compensation outside of the signing bonus. But had the Islanders for some reason waited until this year to sign Tavares, he would have been 19 by calendar year but 20 by "year in which he first signs an SPC," which means they couldn't have automatically deferred his ELC anymore.

With Tavares, there was no incentive to wait; in fact, waiting would have removed the option of buying time if he weren't ready the year after he was drafted. (Likewise with Bailey who, if he weren't going to play in 2008-09, might have been inclined to wait until calendar year 2009 to sign.) With Nino -- although it's unlikely he's not ready until 2013-14 -- there is a mild incentive for the Isles to hold off.

Talented Young Fella Age on Draft Day Age Sept. 15 of Draft Year Age Dec. 31 of Draft Year Options if signed during Draft Year Options if signed year after Draft Year
Tavares/Bailey 18 18 19 ELC can be deferred twice (Draft Year + 2) ELC begins immediately (Draft Year + 1)
Nino 17 18 18 ELC can be deferred twice (Draft Year + 2) ELC can be deferred twice (Draft Year + 3)

 

So, during training camp of their draft years, here's how the incentives sat:

John Tavares: Already signed during the summer -- he was playing his Draft Year no matter what. Leverage: No one.

Josh Bailey: Waited to sign until he made the team -- if he wasn't going to play NHL games in 08-09, he'd be wise to wait until calendar year 2009 to sign. Leverage: Player.

Calvin De Haan (May 9 birthday): Wasn't signed until Draft Year + 1, although he might have preferred to start the clock sooner, to get the signing bonus and to get the clock started. Leverage: Club.

Nino Niederreiter: If the Islanders won't play him this season, they have incentive to wait until calendar year 2011 to sign him. Leverage: Club.

 

But Wait, There's More

Admittedly, this was all just an excuse to go CBA browsing. All of this may not be much of a concern, because it's reasonable to expect Nino will be ready for 10+ NHL games by the time he's 20 and wouldn't need yet another deferral. But you never know, and it doesn't hurt to hold all your options open.

Meanwhile, the CBA does have one incentive (for cap-pushing teams, at least) to sign guys a year before they plan to use them for 10 games or more: The signing bonus is paid immediately and averaged out over three years, which means for every year the player's ELC does not kick in, his average total compensation (for cap purposes) during the ELC is lowered.

It's in 50.5 (g) (iii) of the CBA, the "slide rule":

For any Entry Level SPC that has its term extended pursuant to the provisions of Sect ion 9.1(d) of this Agreement (i.e., the SPC "slides"), and in which the Player received a one-time Signing Bonus at signing (which for Payroll Room purposes, shall be averaged over the length of the term of the SPC pursuant to paragraph (i) above), the original averaging of the Signing Bonus shall not be readjusted as a result of the "slide," although, the Averaged Club Salary following the slide shall be adjusted based on the new total Player Salary and Bonuses to be paid following the slide.

This may have been a small incentive when the Canucks signed Bailey's draft classmate Cody Hodgson (February birthday) -- who has yet to play an NHL game -- around the same time back in 2008: By deferring his ELC twice, his cap hit has dropped from $1.725 million down to $1.6 million if he plays this year.

The ramifications for this slide rule were outlined at Copper & Blue in a post last month. Since I've given you enough legalese for one day and they outlined it better, you can just go there for more. Since the Islanders aren't pushing and aren't expected to be pushing the cap any time soon, I doubt the slide rule is a factor for them.

Ultimately, do I expect Nino to sign a deal this year? If I had to bet, I'd bet yes. But if the Islanders determine during camp that he's not ready for any regular season action -- the same decision they made with De Haan last year -- does it make sense to wait until 2011 to sign him? In one small variation of risk management, yes it does.

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