Tuesday, January 17, 2012

Can Islanders Ever Get Out of Dipietro Contract? Answering A Reader's Question

Offside received a good question from Adam, who resides in New York. Here's the question and Offside's response with input from blog contributor Graydon Ebert:

Hi Eric,

I first heard you on XM NHL Home Ice about a year ago and I have been a regular follower of your blog ever since. You look at the stories from a unique, but important perspective that often isn't covered by other media outlets. Keep up the great work!!!

I have a question that I have tried to find an answer to for years now: With Rick DiPietro's ridiculous contract and endless injuries, how does retirement and insurance work? I am assuming that his contract is fully insured, so don't we have enough evidence where he could retire and still be paid by the insurance company? Are there deductibles? Who pays them, the team or the player? Buying DiPietro out is not an option due to the term and dollars on the contract and I think it is safe to say there is no chance of him coming back to play a healthy, successful career. What are the options to get rid of him without having to pay him? Are there options?

With every passing injury, me and every Islanders fan wonder what the options are. Hopefully you can help clear it up!

Keep up the great work with the blog!

Best Regards,

New York, NY

Adam, we can certainly appreciate your frustration. Now 30 years old, DiPietro still has nine years remaining on his 15-year deal worth $67.5-million. The latest injury is a sports hernia that will keep him out until at least April.

If you remove the 2010-2011 season, when he played 26 games, he has played 23 games since 2008, including 8 this year.

As per Article 23.4 in the CBA, a player who is disabled and unable to play because of an injury sustained during employment is entitled to be paid his salary for the remaining fixed term of his contract as long the disability and inability to play continues.

The player can also make a claim under the NHL/NHLPA career ending disability policy but this disentitles him to the salary under this contract.

In DiPietro's case, should it get to the point where he can't play anymore, it is highly unlikely (i.e., no chance) that he would choose the disability policy over getting paid under his contract. Why forsake the money under the contract.

It is likely that the Islanders have his contract insured given its size. The Isles pay the insurance (and not the player since the team is seeking the coverage). They pay DiPietro's salary and then recoup some or all of it from the insurance - depending on how the policy is structured (always look to the contract as a starting point). That means they would pay the premiums and any deductibles.

The Islanders probably don’t have any other options other than to pay him. Speaking to Newsday, Dipietro declared just last week that he had no intention of retiring.

“Nothing like that has even crossed my mind. Knock on wood, the doctors have said this is something you can come back from. Lots of athletes have. I know I still want to play.”

The Islanders can seek some salary cap relief with the long term exemption but as long as he was hurt playing hockey they have to pay him one way or another.

Ultimately, that’s the risk of signing a player to such a massive contract.


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