FanPost

A quick note on the salary cap floor

Apparently, there was a game of sorts last night.  Funny how I don't remember much except the wailing headache and the mysterious desk imprint on my forehead.  Hm.  But anyway, in the comments about "last night's game" is a perennial discussion here in Islanders Country about the Cap Floor.  To wit, suggestions by several of us to remove certain well-paid gentlemen from the active roster have been met with cries of "It will put us below the Cap Floor!"  These cries are countered with, "So what?  Don't they just make you pay out the difference to everyone?"

It's time to see if we can figure this stuff out, and to do that, we're forced to face an opponent more fearsome than Sauron and Gargamel combined: the NHL's Collective Bargaining Agreement.

Normally any discussion of the salary cap involves the ceiling, not the floor.  For example, if you want to add a guy who would put you over, you have to subtract salary FIRST and only then will you be permitted to add that guy.  Within the CBA, one can find many examples and illustrations of what a club can or cannot do when they're right at that upper boundary - but precious few of what happens down in the Baltic-and-Mediterranean end of town, where the Isles currently sit, hoping someone will land on their Marriott and owe them a money.

The CBA calls the Cap Floor the "Lower Limit."  (Do not attempt to adjust your browser!)  The entirety of their warning to clubs wandering near this uncharted land is in Article 50.5 c (i):

Lower Limit.  No Club shall, after commencement of the regular season, be permitted to have an Averaged Club Salary that falls below the Lower Limit for that League Year.

Elsewhere, the CBA spells out exactly what goes into the Averaged Club Salary, which is calculated daily at 5:00 pm.  (It really says this.)  The upshot is, a club's ACS includes total of salaries already paid and salaries remaining for current roster members, along with bailouts and bonuses and etc.  This must remain above the salary floor number at all times during the season.  Or else... ?

For that we consult Ezekiel 25:17 Article 50.12 c (iii), which reads thus:

Non-Compliance Provisions.  In addition to the provisions of Article 26 of this Agreement, the NHL shall discipline Clubs for material and intentional non-compliance with these provisions, provided, however, that a Club's first offense shall carry a mandatory fine in the amount of any revenue discrepancy plus $1,000,000, plus the loss of a first-round draft choice; and a Club's second and any subsequent offense shall carry a mandatory fine in the amount of twice any revenue discrepancy plus $5,000,000, plus the loss of three (3) first-round draft choices.

For example, this means that if the Isles had dipped below the floor in 2007, then their first pick in 2008, Josh Bailey, would never have happened.  In addition, they would have owed the league a cool million plus whatever amount they fell under the floor.  If they had then gone ahead and fallen under the lower limit again, that's John Tavares, Nino Niederreiter, and Ryan Strome all gone to other clubs, and Charles Wang lighter by five million bucks at the minimum.

Even Rick DiPietro's most ardent detractors have to admit, that's a mite steep. 

The provisions outlined under Article 26 (and mentioned above) have more to do with active attempts to circumvent the Upper Limit while trying to sign players.  Article 26.13 c outlines all the furious vengeance the Commissioner can lay upon thee in the event such a contravention is attempted, much of it similar to the quoted penalty above.  The Devils were punished under 26.13 for their attempt to monkeyshine the Upper Limit in the Ilya Kovalchuk contract, for example.  And though this is purely speculation on my part, I believe that the NHL repeats the penalties in both these articles to make it clear that the Member Clubs face these penalties for violations involving player compensation, not just for violations in reporting their revenues for escrow accounting purposes.  (Article 50 goes into that in some detail, immediately followed by the "Non-Compliance Provisions," so it's a reasonable precaution.)

For further information, one can always weed through Articles 9 through 11, which govern Entry-Level Contracts, Free Agency, and the Standard Player's Contract.  Articles 12-14 govern waivers and other player assignments, all of which would affect the Islanders' decisions on personnel movement (and the salary cap consequences).

Hope that helps.

<em>Submitted FanPosts do not necessarily reflect the views of this blog or SB Nation. If you're reading this statement, you pass the fine print legalese test. Four stars for you.</em>

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