I join Jennifer Burke on CTV National News to break down the Biogenesis MLB case. Lots of questions and we look to provide some answers.
Wednesday, June 5, 2013
I join Matt Cauz and Company on TSN Toronto radio to chat Biogenesis.
Click here to listen (starts at 22 minutes or so).
Click here to listen (starts at 22 minutes or so).
Tuesday, May 14, 2013
Bill Daly Interview: The Lockout, NFL Concussion Lawsuits, Homosexuality, Olympics, World Cup, Social Media & Personal Questions
Recently I had the opportunity to interview Deputy Commissioner and Chief Legal Officer of the NHL Bill Daly.
We discussed a lot of the key issues facing the league, including the lockout, NFL concussion lawsuits, homosexuality, Olympics, World Cup and social media. He also answered some personal questions.
I've gone ahead and transcribed the interview and it can be found at CBSSports.com.
I joined CTV National News and broke down the key elements of the Boogaard lawsuit against the NHL.
Monday, May 13, 2013
Thursday, May 9, 2013
Bill Daly joined me on my radio show Offside for a lengthy and in-depth interview.
We covered the lockout, homosexuality in sports, Olympic participation, a possible World Cup revival, the impact of the NFL Concussion lawsuits on the game of hockey, social media and his Canadian roots.
That's right - Canadian roots. He also used to vacation in the Maritimes.
Friday, May 3, 2013
Ottawa Senators forward Eric Gryba hit Montreal Canadiens forward Lars Eller during second period action in Game 1 Thursday night in Montreal. Eller was knocked unconscious before he hit the ice. With his arms limb and unable to brace for impact, Eller’s face collided with the ice (sadly reminiscent of Kevin Stevens).
The result for Eller was a pool of blood gathering on the ice around his head, a broken nose, broken teeth and a concussion. Eller was taken off the ice on a stretcher and Gryba was given a major penalty for the hit and a game misconduct.
The Canadiens have lost one of their top players. For Canadiens fans it’s a shame, as Eller has emerged this season as a strong two-way player.
Gryba now faces a discipline hearing with the league to determine whether he will be suspended.
So now we are faced with the inevitable question: to suspend or not to suspend?
Well we need to look at the rules, the NHL CBA and of course the hit.
So first the rules. We’ve all heard about Rule 48 or the primary contact to the head rule. Here it is:
48.1 Illegal Check to the Head – A hit resulting in contact with an opponent's head where the head is targeted and the principal point of contact is not permitted. However, in determining whether such a hit should have been permitted, the circumstances of the hit, including whether the opponent put himself in a vulnerable position immediately prior to or simultaneously with the hit or the head contact on an otherwise legal body check was avoidable, can be considered.
Another important consideration is the NHL CBA. It sets out the factors relied upon when determining whether to impose supplemental discipline. Here's the language from the CBA:
In deciding on supplementary discipline, the following factors will be taken into account as per paragraph 6 of Schedule 8 (this is the old CBA but it shouldn’t change):
(a) The type of conduct involved: conduct outside of NHL rules; excessive force in contact otherwise permitted by NHL rules; and careless or accidental conduct. Players are responsible for the consequences of their actions.
(b) Injury to the opposing Player(s) involved in the incident.
(c) The status of the offender, and specifically whether he is a "first" or "repeat" offender. Players who repeatedly violate NHL rules will be more severely punished for each new violation.
(d) The situation of the game in which the incident occurred: late in the game,lopsided score, prior events in the game.
(e) Such other factors as may be appropriate in the circumstances.
Of there factors, Paragraph 6(a) is key. It provides for discipline in cases of illegal hits or legal hits delivered with excessive force.
Now on to the hit. I've slowed the video down and captured these images, which are helpful in analyzing what happened:
From these images, Gryba does not make primary contact with the head. His hips and torso drive into Eller. The elbow is not up, nor is the shoulder delivered to the head. Contact is made with Eller’s body initially and that contact is away from the head.
So how is Eller rendered unconscious before he hits the ice? As a result of the initial impact, Eller’s head hits Gryba in the back of the shoulder knocking him out.
These images are quite helpful in getting a better idea of the manner in which the hit was delivered and received.
So without that primary contact to the head, the application of Rule 48 is off the table.
However, what about Paragraph 6(a) of the CBA, which provides for discipline in cases of hits that fall within the rules but are delivered with “excessive force”.
While the result of the hit was disheartening, the hit itself did not seem one that could be fairly characterized as “excessive”. Gryba lined up Eller (who had his head down), and a strong impactful hit was delivered. This was not a case of Gryba going after a defenseless Eller. It was, unfortunately for Eller and the Canadiens, a hit that not only falls within the rules but was also not excessive.
Problem is the laws of physics conspired to produce the result we saw.
It’s close but there is insufficient evidence to conclude that the hit was worthy of a suspension.
It was a legal hit with a terrible result. Still legal, though.
It was a legal hit with a terrible result. Still legal, though.
By the way, I’m a Habs fan.
Monday, April 29, 2013
I join Sandie Renaldo of CTV National News to discuss Brian Burke's lawsuit.
Click here to watch.
Click here to watch.
Friday, April 26, 2013
Thursday, April 25, 2013
I joined CTV National News today to discuss the U.S. Government's lawsuit against Lance Armstrong. They have alleged, in part, breach of contract and fraud, and are seeking in excess of $100 million.
Lance's defensive team called the action "opportunistic and insincere".
Pot meet kettle.
Friday, April 19, 2013
I joined Dave and Simmer at the Team 1200 to talk the perils of a 24 hour news cycle. We also talk about Adam Scott's sponsorship potential.
Friday, March 15, 2013
As a born again in the 1990s, Stu also speaks to reconciling his faith with punching people in the face.
Stu is very articulate. A wordsmith. That made for a compelling interview.
Click here to listen.
Thursday, March 14, 2013
by Fraser Blair - @fmblair
What the New York Islanders decide to do with Tim Thomas after this season might provoke a legal challenge under the new CBA. Circumvention anyone?
As we explored in Part 1 of this series, Thomas has been suspended without pay for failing to report to the team. By rule, the $5 million cap hit on Thomas’ contract counts towards the calculation of the Islanders compliance with the Lower Level. Technically, the cap hit does not count towards the team’s Upper Limit.
If Thomas stays home for the entire season the Islanders will have the right to ‘slide’ the remaining year on the contract to 2013. If he refuses to report next season, he will once again be suspended and the Islanders’ Lower Level will be credited with $5 million.
In a vacuum, there is nothing wrong with this conduct. Extending the contract of a player who was suspended for failing to report is neither new nor offensive in and of itself. However, the precedent set by the Kovalchuk case tells us that circumvention matters aren’t analyzed outside of their full context.
The anti-circumvention rules of the CBA are contained in Article 26. Article 26.3(a) describes the elements of a circumvention offence. It reads:
“No Club or Club Actor, directly or indirectly, may: (i) enter into any agreements, promises, undertakings, representations, commitments, inducements, assurances of intent, or understandings of any kind, whether express, implied, oral or written, including without limitation, any SPC, Qualifying Offer, Offer Sheet or other transaction or (ii) take or fail to take any action whatsoever, if either (i) or (ii) is intended or has the effect of defeating or Circumventing the provisions of this Agreement or the intention of the parties as reflected by this Agreement...”
This was the provision at issue in the Kovalchuk case. In that case, arbitrator Richard Bloch determined that the 17-year $104 million back-diving contract between Ilya Kovalchuk and the New Jersey Devils amounted to cap circumvention. Eric has a nice summary of the decision on this site.
Bloch’s decision contains a high level analysis of the purpose of the Upper Limit of the salary range system. He concludes that the purpose is to promote ‘competitive balance’ amongst NHL clubs by ensuring a degree of payroll parity within the league.
Circumvention, then, can arise due to conduct that defeats the principle of competitive balance. Following this reasoning, Bloch concluded that Article 26 is wide enough to capture conduct that is not explicitly prohibited by the CBA but nevertheless offends competitive balance. As a result, Article 26 necessitates for a deep contextual inquiry into all the relevant factors surrounding the transaction.
This reasoning trumped the NHLPA’s argument. The union had argued that none of the terms of Kovalchuk’s contract actually broke any explicit rules in the CBA and that by extension, the CBA and the salary range system were not circumvented. However, since Bloch determined that a contextual approach was the most appropriate method for analysis for Article 26 issues, the context of the transaction became the determinative issue in the case.
The relevant contextual factors were the combination of a substantial drop in salary over the last 6 years of the contract, the fact that only one NHL player has played past his 43rd birthday (the contract would have paid Kovalchuk until he was 44) and the switch from a ‘no-move’ clause to a ‘no-trade’ clause. Together, this proved that it was “reasonably unlikely” that Kovalchuk would or was intended to fulfill the full extent of his contract.
Note how the standard of proof was reasonableness. The evidence doesn’t have to be unequivocal. In other words, the evidence must form an intelligent and logical basis for the facts its trying to prove.
In sum, the Kovalchuk decision determined that a wide range of conduct may be caught by Article 26. Regardless of intent, Article 26 prevents otherwise permissible transactions that, when examined in their full context, have the effect of offending competitive balance.
Using the template provided by the Kovalchuk decision, would the Islanders violate Article 26 were they to extend his contract with the knowledge that he will not play next season?
To make a persuasive argument, the NHLPA would first have to establish that the purpose of the Lower Level is the same as the Upper Limit: to ensure competitive balance within the league. This would not be a difficult hurdle to clear as the Upper and Lower Levels create a fixed player salary range within which every team must operate. In other words, they promote salary parity together.
The more difficult aspect of the union’s case would be its ability to prove that the Islanders extended Thomas’ contract despite knowing that it was “reasonably unlikely” that he would play in 2013-2014. As was the case with Kovalchuk, none of the conduct that would be undertaken by the Islanders would violate a specific provision of the CBA. As a result, the NHLPA would have to show that the sliding of Thomas’ contract constitutes circumvention in the specific context.
The NHLPA would likely discharge this burden if Thomas is publicly adamant about his intention to not play next season or simply tells the Islanders that he will not report to the Club. However, the NHL would point to Thomas’ has public statements of his intent to compete for the United States at the 2014 Olympics as evidence that it was reasonable for the Islanders to believe that he intended to fulfill the remaining year of his contract.
It will be interesting to monitor how Thomas’ age (39) factors into the arguments. The NHLPA would argue that his advanced age adds to the unlikelihood of him playing in the NHL. However, the NHL could argue that his age doesn’t help the NHLPA given the number of goaltenders of his age or older who have recently played in the NHL. I’m not sure how this factor would be interpreted, but it is clear that the relevance of age would be more contentious that it was in the Kovalchuk case.
Another contextual factor might be the upcoming changes to the calculation of a team’s compliance with the Lower Level. As we explored recently, the new rules will prevent performance bonuses from counting towards the Lower Level. We also showed that the Islanders will be seriously impacted next season by this change.
Might the NHLPA argue that the acquisition of Thomas is an attempt by the Islanders to mitigate the changes to the Lower Level that take effect next season? It’s a circumstantial but plausible argument and Article 26 allows the consideration of circumstantial evidence. It’s clear that Thomas’ $5 million cap hit would significantly help the Islanders reach the floor without actually having to spend the money.
In any event, the Islanders are definitely a team to monitor over the next few months. The new CBA appears to close some of the loopholes he has exploited. I’m looking forward to how he will react to the new rules.
Saturday, March 9, 2013
Marc Staal getting hit in the eye with a puck has once again sparked a discussion as to whether NHL players should wear visors.
The starting point for this discussion is whether the NHL can force players to wear visors.
Visit TSN's website here for my answer.
Monday, March 4, 2013
I wrote an article for CBS entitled Canadiens GM Marc Bergevin Making Strides On Ice And Balance Sheet. Bergevin has cleared significant cap space with some shrewd moves, while not compromising the quality of the team.
Sunday, March 3, 2013
By Rory Johnston (@RnfJohnston)
When the Colorado Avalanche found out yesterday afternoon that RFA centre Ryan O’Reilly had signed an offer sheet with the Calgary Flames, they had 7 days to make a decision on whether to match the Flames’ offer. Instead, it took them only a few hours to decide they wanted to keep him.
Colorado has now secured O’Reilly’s services for the next two years, albeit at a salary that’s a fair bit higher than what they would have preferred. Another downside - they’ve gone without him for the first 19 games of the season and are sitting outside of a playoff spot.
The Flames’ offer came with a twist: the structure of the offer was carefully designed to make it less attractive for the Avalanche to match. It’s only a two-year deal, set up so that O’Reilly will make $6.5 million in 2013-14, and only $3.5 million this year ($2.5 million of which comes as a signing bonus). By jacking up the salary in year two, O’Reilly will be guaranteed a rich payday if the Avalanche want to retain him.
The structure of the Flames’ offer was meant to be a ‘Poison Pill’. The high second-year salary of $6.5 million will set the bar for future negotiations and salary arbitration such that O’Reilly may never be cheap again. That means that the Avs first year offer must be $6.5 million – subject to possible conditions.
So the Flames purposely torpedoed any long-term savings on the contract in an effort to make it a less attractive option for the Avalanche to match.
‘Poison Pill’ is a term I’m borrowing from NBA offer sheets, which use a different salary cap trick to make it hard to match offer sheets, but the concept is the same: it’s a contract term that could hurt whichever team signs the player, with the goal of keeping a team from matching an offer.
Some have noted that the higher salary in year two means that the qualifying offer necessary to keep O'Reilly will be a steep $6.5 million for 2014-15. Quite possible - but not the only option.
At the end of the 2013-14 season, O’Reilly will be a restricted free agent once again, and instead of tendering a qualifying offer, the Avalanche could file for ‘cut-down’ arbitration in the hopes that they can retain O'Reilly at a lower price than his $6.5 million 2013-14 salary. 'Cut-down' arbitration is a rarely-used CBA provision that allows teams to file for arbitration with the hopes of giving their player a pay cut of up to 15%.
In 2012, the Vancouver Canucks filed for cut-down arbitration for Mason Raymond – and he settled with the team, agreeing to take a 14% pay cut after injuries had slowed down his performance.
In O’Reilly’s case, the 15% pay cut would be measured against his $6.5 million 2013-14 salary. So the lowest possible salary he could get at arbitration would be $5.525 million. Though it might be counter-intuitive to give a pay cut to a player on the rise, NHL salary arbitrators may look at other RFA-eligible players at similar age and experience levels and conclude that few players at O’Reilly’s age make as much money.
There are no guarantees, though. Since the Mason Raymond case was settled before going to arbitration, O'Reilly would be a real test case for cut-down arbitration. It’s tough to know how that would unfold (if we get there). While there may be reasonable arguments justifying a drop from the qualifying offer, if O’Reilly has a reasonably good season in year two of his deal, it will probably be tough to get an arbitrator to cut his salary. Honoring the intent of the qualifying is the starting point and there will need to be good reason to move off that.
Why did the Avalanche match so quickly? Avs GM Greg Sherman had presumably given a lot of thought to this ahead of time, including making a decision on how high an offer he would match. Sherman was Colorado’s Assistant GM before graduating to the big job in 2009. In his previous role, he was the team’s lead contracts man, handling contract negotiations, a bit like the old role occupied by Leafs GM Dave Nonis. Sherman, no doubt, had the various possibilities (including, possibly, the option for cut-down arbitration) in mind well in advance before the offer sheet dropped.
These guys are generally prepared – we just don’t hear about it.
Friday, March 1, 2013
By Fraser Blair (@fmblair) & Eric Macramalla
Earlier today, Sportsnet.ca reporter Chris Johnston reported that Ryan O'Reilly, who signed an offer sheet with the Calgary Flames last night, would have had to clear waivers before he could play with the Flames this season.
"In a bizarre twist to an already unusual story, Sportsnet.ca has discovered that the Flames were not only in danger of losing 2013 first- and third-round draft picks as compensation if the Avs hadn’t matched the O’Reilly contract, but they also would likely have had to surrender the player before ever getting him in uniform.
That’s because O’Reilly would have needed to clear waivers before joining the team’s roster.The unsigned forward spent part of the NHL lockout playing with his brother, Cal, for Magnitogorsk in Russia. According to Metallurg coach Paul Maurice and KHL spokesman Shawn McBride, he appeared in games on Jan. 21 and Jan. 23 – both after the shortened NHL schedule was back underway – which meant that waivers were required before O’Reilly could return to the NHL as a free agent midway through the season."
Johnston raises a very interesting point, the consequences of which would have been serious and embarrassing for the Flames and General Manager Jay Feaster.
Under the old CBA, Article 13.23 provided that any player who signed an NHL contract while he was playing overseas at the beginning of the NHL season had to clear waivers before playing with the Club with which he signed. You may recall that in December 2011, forward Antti Miettenen was signed out of the Finnish Elite League by the Tampa Bay Lightning. According to 13.23, the Lightning placed him on waivers and he was subsequently claimed by the Winnipeg Jets.
The old CBA would have required waivers for O'Reilly regardless of whether he signed with the Avalanche or another Club because O'Reilly played in two KHL games after the 2013 NHL season began.
However, since the old CBA expired and the new CBA has yet to be ratified, reference is had to the Memorandum of Understanding (MOU). On page 19 of the MOU (which is a summary of the terms that govern the relationship between the parties moving ahead until the new CBA is drafted), it states as follows:
“All Players on a Club’s Reserve List and Restricted Free Agent List will be exempt from the application of CBA 13.23 Waivers in the case of a mid-season signing.”
So some have reasoned that this provision eliminates the need for a player to clear waivers if he is re-signing mid-season with his current club only.
However, there is the argument that the conditions for avoiding waivers are only limited to the following:
1) A player must be on “a” Club's Reserve List and Restricted Free Agent List, and;
2) He must sign a contract mid-season.
In other words, the language doesn't expressly provide that a player may only avoid waivers if he re-signs with the team that holds his rights (in this case the Avs). Instead, it states that so long as the player is on “a” Club's Reserve and Restricted Free Agent list, he will not be subject to waivers before playing, regardless of where he signs.
Put another way, the Flames likely interpreted the MOU to provide that O’Reilly being on the Avs reserve list makes him waiver exempt for all teams.
Articles 10 and 13 of the old CBA, the portions that govern offer sheets and waivers, are chalk full of references to the “Prior Club” (the Avalanche) and the “New Club.” (the Flames) This is significant because it shows that the NHL and the NHLPA have treated the Prior Club and the New Club differently in other provisions of the CBA.
So the MOU does not distinguish as to the club signing the player. So the language is such that the parties understood there would not be a distinction between the Prior and New Clubs in this regard.
This gives the Flames an arguable case that O’Reilly should not have been placed on waivers. Not surprisingly, the Flames have stated that their interpretation is not consistent with the League’s interpretation on this point. This is perhaps a strained argument since arguably the idea between the provision was to let current teams bring their players back post-lockout without a penalty. Still, the language utilized by the sides casts some doubt in its interpretation.
If the O’Reilly did indeed go on waivers, we may have seen the case go to arbitration by way of a Flames grievance. That would have been messy.
So it's fair to conclude that the Flames weren't totally out in left field on this one. Maybe Texas Leaguer area but not left field.
Finally, this issue will likely be cleared up in the final collective bargaining agreement, which we expect will be ratified soon.
Finally, this issue will likely be cleared up in the final collective bargaining agreement, which we expect will be ratified soon.
Friday, February 22, 2013
I wrote an article for TSN explaining why we should not be surprised that Oscar Pistorius was granted bail earlier today. I also address his potential jail time, the charges, why the bail hearing is not the trial and the fact that this will not be a jury trial.
Tuesday, February 19, 2013
Here is a full copy of the Oscar Pistorius affidavit, which is his account of what happened that night.
It was presented today at his bail hearing. Under South African criminal law, Pistorius needed to show exceptional circumstances warranting his release on bail given the gravity of the crime. However, his lawyers have argued that the crime is being too harshly categorized and for that reason the onus should not be on him to justify his release.
Tuesday, February 12, 2013
By Fraser Blair
One of the concepts that I wrote about in the first piece about the Tim Thomas trade was the salary cap’s Lower Level (the salary floor). Under the new CBA, the way teams will approach the Lower Level will be significantly different due to 2 changes in the operating structure of the payroll range system.
First, beginning in the 2014-2015 season the Upper and Lower Limits of the payroll range (the cap floor and the ceiling) will no longer be calculated using the current formula. The current formula adds or subtracts $8 million from the salary midpoint in order to determine the Lower and Upper Levels. The salary midpoint is determined by the following steps: (1) multiply hockey related revenue (HRR) by the player’s share; (2) subtract player benefits from (1); (3) divide the figure from (1) and (2) by the number of teams.
Midpoint = [(HRR*0.50)-Benefits] / 30 teams
Note: The previous formula also adjusted the midpoint upwards by 5% each season. The NHLPA CBA summary mentions a growth factor but doesn’t specify the amount.
Last season, the salary midpoint was roughly $56.3 million. As a result, the Upper Limit was $64.3 million and the Lower Limit $44.3 million.
The Upper and Lower Limits will still be calculated based on the cap midpoint under the new formula, but those figures will be determined by adding or subtracting 15% instead of $8 million.
Regarding the Lower Limit, the two systems would produce the same results if the salary midpoint were $53.33 million. At all midpoints below, $8 million exceeds 15%. Conversely, as the midpoint rises the cap floor is lower under the new formula than it would be under the previous system.
This appears to be a moderate victory for low revenue teams. Under the new CBA, the Lower Level will be lower than it would have been under the previous system. Furthermore, once the salary midpoint reaches $69 million, (likely between years 6 and 7 of the CBA assuming 5% revenue growth) the difference between the new and old formulas for calculating the Lower Level will be $2.35 million. That’s not an insignificant amount of money, though I’m sure the owners of the Florida Panthers and the New York Islanders would still tell you it’s too high. They may be right, but that’s not the point here.
Although the Lower Level won’t be increasing as much as it did in the past, the second change to the Lower Level system will make it harder for teams to reach the salary floor. According to the NHLPA summary, performance bonuses will no longer count in the calculation of a team’s Lower Level. This provision was featured for the first time in the NHLPA’s CBA proposal on October 17, 2012, and it’s not surprising that the players fought for it its inclusion.
Since 2005, Clubs have been able to offer performance bonuses to certain types of players. Performance bonuses are almost always offered to high draft picks and free agents who sign and Entry Level Contract (ELC). Under the old CBA, teams could offer up to $2.85 million in performance bonuses to players on their ELCs. Those bonuses counted towards the calculation of the Club’s Upper and Lower Level salary requirements but will no longer be counted towards the floor.
Performance bonuses were governed by Exhibit 5 to the previous CBA, and were broken down into two categories. The first category, Individual “A” Bonuses are linked to individual player accomplishments. There are nine categories of “A” Bonuses for forwards, ten for defencemen and eight for goalies. For skaters, the bonus categories include Ice time, goals, assists, points, points per game, plus-minus, blocked shots (defencemen only), selection to the All-Rookie team, selection to the NHL All-Star Game, NHL All-Star Game MVP. For goalies, in addition to the All-Rookie and All Star Game bonuses, the categories are Goals Against Average, Save Percentage, Wins and Shutouts.
The maximum value of any of these bonuses is $212,500, and a player cannot receive more than $850,000 in cumulative Individual “A” Bonuses. In other words, the ELC of a forward may contain $212,500 in bonuses for all nine categories, but if he hits on more than four, he’ll only receive $850,000.
The second category, Individual “B” Bonuses are bonuses payable in respect of League Wide Awards and Performance. The “B” Bonus categories are also listed in Exhibit 5 and the maximum value of any player’s “B” Bonuses in a single season cannot exceed $2 million. However, the CBA allows teams to negotiate the amounts payable individually with their players. For example, a most generous ELC will entitle the player to a $2 million bonus upon any of the following:
• winning the Conn Smythe trophy
• being named a 1st or 2nd Team All Star
• finishing, 5th in balloting for the Hart, Norris, Selke, Richard or Vezina,
• finishing 10th in scoring and/or
• finishing 10th in points per game
***Note: Individual “B” bonuses in respect of winning the Calder Trophy ($212,500) and the Lady Byng ($150,000) are also permitted, but Clubs may not negotiate bonuses in excess of the stated amounts.
The bonus requirements can and likely are more strenuous for most players, although players like Justin Schultz who signed their ELCs as UFAs and players with a realistic chance of playing in the KHL may have enough leverage to negotiate better bonus packages. Even at the most generous end, it seems highly unlikely that a player on his ELC would reach the full value of his Individual “B” Bonus ceiling in each of his first three seasons.
I spoke with prominent player agent Andrew Scott of Octagon and he corroborated this theory for me. Mr. Scott told me that outside of the elite young players (think Sydney Crosby, Evgeni Malkin and Alexander Ovechkin), players on their ELC do not obtain the full value of their performance bonuses.
Given this, it’s safe to say that Clubs in need of reaching the Lower Level were able to gain a financial advantage under the old rules by, at least in part, writing large and unreachable performance bonuses into their ELCs.
For example, let’s take the case of Ryan Nugent-Hopkins of the Edmonton Oilers. Nugent-Hopkins received the full range of Individual “A” and “B” bonuses and we’ll assume for the sake or erring on the conservative side that he obtained the full permissible bonus for each category. We’ll consider the Individual “A” bonuses first.
Ryan Nugent-Hopkins: 2012 Statistics
All Star MVP
Nugent-Hopkins qualified for the PPG bonus, the ice time bonus, the All Rookie Bonus and the All Star Bonus. As a result, the maximum he would have received in Individual “A” bonuses last season was $850,000 As a result of not scoring 20 goals, notching 35 assists, finishing amongst the top-3 forwards in plus/minus or winning the MVP of the All Star game, Nugent-Hopkins did not qualify for those bonuses.
Turning to the Individual “B” bonuses, Nugent-Hopkins won the Calder Trophy and we’ll assume that the Oilers paid him a bonus of $212,500 for that trophy. He did not qualify for any of the other “B” bonus categories.
In sum, the most Nugent-Hopkins could have earned from Individual “A” and “B” bonuses in 2012 was $1,062,500. When we add in his salary ($925,000) and his signing bonus ($92,500), we get a maximum total value of $2,080,000. That figure is $1,695,000 below his cap hit.
This is already getting to be a long piece, so I’m not going to go through the other Oilers currently playing under ELCs (though it’s important to note that Jordan Eberle likely qualified for all of his $312,500 performance bonus money). However, it would appear to be the case that outside of the elite players alluded to by Mr. Scott, players on their ELCs do not hit on the full range of available performance bonuses.
With each of the last three first overall picks and Justin Schultz on their roster, the Oilers are probably the extreme end of the bonus spectrum. But the point here is that some teams have been able to gain a financial advantage through the performance bonus system by tying largely unreachable bonuses to ELCs.
Looking ahead to next year, the Edmonton Oilers’ cap hit of $44.5 million contains about $8.5 million for performance bonuses. With at least 7 roster spots to fill, the Oilers won’t have trouble reaching the floor.
The New York Islanders, on the other hand, will be an interesting club to monitor next season. With $29 million committed to 12 players, the Islanders will have to spread the remaining $15 million amongst the 9 (or so) roster spots available. Again, it’s not that this amount will be difficult to fill, but they won’t be able to rely on their prospects to carry the cap load the way the Oilers have in the past. Under the old rules, the cap hits of several near-NHL ready prospects like Griffin Reinhart (bonus: $2.35M), Brock Nelson (bonus: $1.925M), Nino Neiderreiter (bonus: $1.925M), Ryan Strome (bonus: $850,000) Mike Halmo (bonus: $850,000) and Calvin de Haan (bonus: $600,000), would have totaled $13.8 million. Under the new regime, the maximum value of those players relative to the Lower Level is only $5.3 million.
General Manager Garth Snow will have to walk the difficult line of ensuring a sound development for his Club’s prospects and making sure he reaches the floor. Perhaps this indicates that the trade for Tim Thomas was made for the purpose of reaching next season’s Lower Level. f Snow can slide Thomas’ contract to next season because of his suspension (which he will likely try to do) and avoid an NHLPA grievance for cap circumvention (which will form the subject of Part 2 of my Tim Thomas series), then he’s a lot closer to the Lower Level.
In conclusion, this is a bad provision for the fans who will have to wait longer in some cases to see their team’s top prospects wear an NHL uniform. There just isn’t the same business (non-hockey) incentive for floor teams to dress their young players as there used to be.
On the other hand, this was a really shrewd inclusion by the NHLPA. The likely result is that floor teams will have to spend more money on veteran players in order to reach the lower limit.
Friday, February 8, 2013
By Fraser Blair
(Part 1 of 2 Part analysis the Tim Thomas trade. Part 1 examines the trade itself. Part 2 will examine the possibility of a circumvention grievance if Thomas’ contract slides into the 2013-2014).
The trade of Tim Thomas is perhaps the most interesting trade from a non-hockey perspective since the implementation of the salary cap in 2005. This trade has absolutely nothing to do with on-ice affairs of the Boston Bruins or the New York Islanders but has everything to do with the NHL’s ever-rising Lower Limit salary threshold (or salary floor).
Getting to the Lower Limit is increasingly difficult for low revenue teams and in recent years, some of these teams have taken creative approaches to minimize the financial implications of reaching the floor. GM Garth Snow and the New York Islanders took the creativity to a new level yesterday by acquiring the suspended Thomas from the Boston Bruins in exchange for a conditional 2nd round pick in 2014 or 2015. The pick will go to Boston if Thomas plays in at least one game for the Islanders or a team he's traded to.
Since he's suspended, Thomas hasn't been paid by Boston and his contract did not count against the Bruins’ Upper Limit calculation. However, Section 50(10)(c) of the CBA required the Bruins to maintain enough cap space to accommodate Thomas in the event that he returned. It reads:
“For Players that are suspended, either by a Club or by the League, the Player Salary and Bonuses that are not paid to such Players shall not count against a Club’s Upper Limit or against the Players’ Share for the duration of the suspension, but the Club must have Payroll Room for such Player’s Player Salary and Bonuses in order for such Player to be able to return to Play for the Club.”
So the Bruins have been forced to keep their salary cap commitments $5 million below the Upper Limit because of Thomas even though his salary doesn't technically count towards the salary cap. It’s a subtle but important distinction that becomes relevant when we assess the different implications of this trade for the Islanders. Put another way, if Thomas’ cap hit won’t technically count towards New York’s Upper Limit, how does it help that team reach the Lower Limit?
Well, the inclusion of the term “Upper Limit” and the exclusion of the term “Lower Limit” in Section 50 would seem to allow Thomas’ cap hit to count towards the floor but not the top end of the cap. In other words, Thomas’ cap hit counts towards the team’s Lower Limit but not its Upper Limit. Convenient for both the Bruins and Isles.
This seems a bit strange. It would be interesting to see the outcome of a grievance initiated by the NHLPA on the basis that the same rules should apply to the calculation of a Club’s Upper Limit as they do to a Club’s Lower Limit.
Here's the NHLPA's argument: You can’t reach the Upper Limit until you cross the Lower Limit, and therefore the same rules that apply in determining whether a Club has complied with the Upper Limit should apply in determining whether a Club has complied with the Lower Limit. By extension, the Thomas’ cap hit should not count towards the Islanders’ Lower Limit because the CBA does not count it towards the Upper Limit.
That reasoning works - but the issue is the language of the CBA is probably determinative of this question. It seems that the specific inclusion/exclusion of the words Upper/Lower Limit was intentional and designed to enable Clubs near the Lower Limit to take advantage of this strange rule that counts cap hits like Thomas’ on one hand (in determining whether the Club has reached the Lower Limit) but not the other (in determining whether the Club has breached the Upper Limit). The language is clear and if the agreement favoured the NHLPA’s logic, it would have been written differently.
Although the Islanders appear to be trade appears to be one designed to avoid spending money, a circumvention grievance pursuant to Section 26 is unlikely to be successful for two reasons.
First, whether the circumvention rules apply to a trade is questionable. The spirit of the Section 26 is directed towards Circumvention in player contracting. The language is written in a way that would certainly allow for argument, but this argument would be highly technical and formalistic.
Secondly, even if Section 26 did apply the Islanders haven’t committed Circumvention. As Eric Duhatschek pointedout today’s Globe and Mail, the Islanders had already reached the Lower Level by the time they acquired Thomas yesterday. Lubomir Visnovsky’s return to the Club earlier this week put the Islanders above the Lower Level. In this regard, the Club showed some savviness and may have protected against a grievance by not using Tim Thomas to get to the salary floor.
Thursday, February 7, 2013
I joined Scott MacCarthur at TSN Radio. We talked Alex Rodriguez, Melky Cabrera, Lance Armstrong, Barry Bonds, Roger Clemens and PEDs.
I got all riled up. And justifiably so.
I got angry just writing this entry.
Click here to listen.
Wednesday, February 6, 2013
I join Jennifer Burke at CTV National News to discuss the possibility of criminal charges materializing against Lance Armstrong.
Lance is going to be busy on the legal side for a while.
Click here to watch.
Thursday, January 31, 2013
by Fraser Blair
Restricted Free Agent (RFA) P.K. Subban and the Montreal Canadiens recently agreed to a 2 year $5.75 million contract, and the consensus is that the Habs ‘won’ the deal. Subban was reportedly seeking a 5 or 6 year contract worth an average north of $5 million. It is therefore easy to see how many could view the actual deal as a significant bargain for the Club.
But I’m not convinced. Before I justify my position, I need to explain how the market for RFAs operates.
The Collective Bargaining Agreement that governed the market for NHL players between 2005 and 2012 dramatically changed the market for RFAs. The last agreement (as will the new agreement) allowed players to qualify for unrestricted free agency after 7 NHL seasons. Prior to 2004, players could only qualify for UFA status following 10 seasons in the NHL. The major consequence of this new system was an increase in the number, value and length of long-term contracts handed out to players after the completion of their Entry-Level Contracts (ELCs).
Many of these contracts consumed the entirety of a player’s RFA years as well as a number of his first years of UFA eligibility. For example, Erik Karlsson’s 7 year $45.5 million contract with the Ottawa Senators covered all four of his RFA years as well as first three UFA seasons. Tyler Myers’ 7 year $38.5 million deal with the Buffalo Sabres did the same.
The annual average value (AAV) of these two contracts takes account for the player’s value at several stages of his career: his four individual seasons as an RFA and the block of UFA seasons. As a result, the AAV doesn’t accurately gauge the player’s market value in any respective seven seasons, especially not his value during his first two seasons as an RFA.
So if we’re going to determine whether or not Subban is underpaid under this current deal, we can’t look at the RFA-UFA extensions. Rather, we have to compare the AAV of Subban’s contract to the AAV of similar contracts signed by similar players.
In determining who and what was similar, I limited my search to defencemen who signed two year contracts covering the two seasons immediately following the expiration of their ELCs. For the purposes of ensuring salary cap neutrality, I restricted my focus to contracts signed after 2010, when the upper limit was $59.6 million.
Here are the top 5 most expensive contracts of this type by AAV. Subban’s contract tops the list:
P.K. Subban (Montreal Canadiens): 2 years/$5.75M ($2.875 AAV)
Erik Johnson (St. Louis Blues): 2 years/$5.2M ($2.6 AAV)
Michael Del Zotto (New York Rangers): 2 years/$5.1M ($2.55 AAV)
Dimitri Kulikov (Florida Panthers): 2 years/$5M ($2.5 AAV)
Zach Bogosian (Winnipeg Jets): 2 years/$5M ($2.5 AAV)
Even if you think that Subban’s the best player in this class (hint: he is, both by advanced and conventional metrics), he’s still the highest paid player on that list by a significant margin (10% is a big difference).
Furthermore, the backloaded nature of his contract also insures that Subban will receive a qualifying offer of $3.75M for the 2014-2015 season. No other player in this class was accorded that benefit to that degree. (Players making over $1 million must be offered 100 percent when made qualifying offer).
In conclusion, these players show the two-year value of a top-4 defenceman following the expiration of his ELC. Based on the salaries of these players, it appears that Subban has been paid fairly relative to his peers. He’s receiving more money than any other defenceman in recent history on a 2 year contract following his ELC. The structure of the deal also ensures a healthy salary for the 2014-2015 season.
Monday, January 21, 2013
by Fraser Mackinnon Blair (@fmblair)
Although the NHL season has only just begun, some are already looking forward to seeing how the new CBA will effect this summer’s free agent period.
We know that one of the NHL’s main requirements for the new CBA was a term limit on player contracts. The NHL and the NHLPA agreed to impose a general contract limit of 7 years, with the exception that a team may re-sign its own player to an 8 year contract. The rule is there to give teams an advantage in negotiating contracts with their home-grown stars.
However, it’s possible that the contract limits add an additional layer to the new CBA: the sign and trade. The sign and trade is very popular in the NBA. Not so long ago, both Lebron James and Chris Bosh were acquired by the Miami Heat via the ‘sign and trade.’
A sign and trade occurs where a pending free agent signs an extension with his current team on the understanding that he will be immediately traded to another team. It became popular in the NBA as the rules allowed a free agent to sign a longer and more expensive contract extension with his current team than he could with another team.
It made sense for the Cleveland Cavaliers to entertain the possibility of a sign and trade when they knew that LeBron James was going to sign with another team and that they were otherwise going to lose him for nothing. Given that there were many teams interested in James, including the New York Knicks, the Cavaliers were able to obtain a couple of draft picks from the Miami Heat in exchange for their superstar. A small pittance, but a pittance nonetheless.
Let’s take this back to the NHL.
Corey Perry and Ryan Getzlaf of the Anaheim Ducks headline the list of potential unrestricted free agents this summer. At 27 years old, Perry and Getzlaf are likely to receive a maximum length contract, whether they sign with the Ducks or elsewhere. The question is whether another team (say the Leafs) would approach the Ducks with a sign and trade offer.
Assuming that Perry or Getzlaf will not re-sign in Anaheim and are happy to play for Toronto, then the sign and trade is a win for all sides. The players get their 8 year contracts and move to a preferred location. The Leafs get their players and the Ducks get some form of compensation.
But not so fast.
According to the Summary of the CBA that has been posted on the NHLPA’s website (we’re using a summary because the final document hasn’t been completed), a team’s 8-year rights cannot be ‘traded’ after the trade deadline of the previous season. As a result, the Leafs could not trade for the rights of Perry/Getzlaf during the exclusive negotiating period between the end of the season and July 1st and subsequently sign the players to 8-year contracts.
In addition, the 8 year contract rights in the case of a UFA expire on July 1st. So such a deal would have to be constituted between the end of the season and the beginning of free agency. By design, this is also the period during which teams have exclusive negotiating windows with their pending UFAs.
So what does this all mean?
The sign and trade in the NBA has created this weird situation where the new (Heat/Leafs) team negotiates with the player (James/Bosh/Perry/Getzlaf) through the old team (Cavaliers/Raptors/Ducks). This may look like tampering, but the fact that it has gone on for this long in the NBA suggests otherwise.
This also seems like a blatant circumvention of the CBA but the summarized CBA doesn’t speak directly to whether the sign and trade is forbidden. Given (1) this silence, (2) the known history of the sign and trade in the NBA and (3) the fact that the same law firm (Proskauer Rose) has handled the CBAs of both leagues, the presumption would likely be that they are allowed.
At this point we don’t know for sure, but I expect that savvy teams with pending UFAs will reach out to potential suitors for their UFAs, and potential suitors will look to get a jump on their competitors prior to July 1st. The end result will be fewer UFAs available at-large on July 1st.
Of course, this could all be meaningless if the final CBA outlaws these maneuvers. But at this point it appears that the sign and trade will be allowed and will impact the way teams approach free agency.
Friday, January 18, 2013
I appeared on TSN's SportsCentre last night after the big Oprah-Lance interview. I talked about the legal side, and why Lance did what he needed to do on the criminal side.
After the clip, I surprised the whole TSN staff with new cars. Everyone screamed.
Click here to watch the clip.