Tuesday, February 21, 2012

The NHL CBA & Chris Pronger's Contract: One For The Ages

Chris Pronger, the 37 year old defenceman for the Philadelphia Flyers, is suffering from post-concussion syndrome and his condition is not improving according to his wife Lauren. This according to csnphilly.com.

“I think this is very, very frightening for Chris. He’s been able to battle through so much and come out of it, but this is different for him. This is really tough on Chris. He wants to be out here more than anyone. This is his life, this is his passion. And this is tough… Unfortunately, I can’t report any major improvement. I certainly wish I could. It’s very disheartening.”

“I see a lot of differences in Chris,” she said. “Just hoping to have a couple good days in a row and see him back to his normal self again. I know he wants this, too. It’s very frightening to him, too.”

Lauren goes on to say that her husband’s personality has changed as a result of his illness (which is not uncommon):

“He is not himself and it’s not in a good way. I just want him to get  better. He still has a long life to live, three kids and a wife and everything. Right now, we’re just hoping for his health to come back. That is our priority.”

Pronger's Contract & Why 34 Is The New 35

At this point, the prognosis appears to be grim and Pronger's career may be over. Of course, the hope is that he recovers and can resume a normal healthy life.

But what about his contract? In 2010, Pronger signed a 7 year deal worth $34,450,000 with the Flyers. The cap it on the deal is $4,921,429 (remember the cap hit is the average yearly value of a contract and not what a player makes in a specific season).

The NHL CBA provides that a player's contract does not count against the salary cap if that player retires. However, there is an exception found at Article 50.2(c)(iv) of the NHL CBA: when a player aged 35 or older signs a multi-year contract, his cap hit will continue to count every year of the contract, even if the player retires before the contract is up.

When Pronger signed the contract in September 2009, he was 34 years old. He turned 35 the next month on October 14. However, when he signed the contract, he was 34 years old. So if Pronger retired, whatever would be left on his contract would not count against the cap - right?


That same Article 50.2 says that a player's age when he signed the contract isn't his age when he put pen to paper. Rather, it's his age "as of June 30 prior to the League Year" in which his new contract takes effect.

While Pronger signed his contract when he was 34 years old, he turned 35 in October - which is well before the June 30 date. So that means that Pronger was deemed to be 35 when his contract kicked in.

Consequently, as per Article 50.2, if Pronger retires his salary will still count as against the cap because he was 35 when he signed the contract.

Did The Flyers Know Pronger Was Really 35 years Old?

The next question is whether the Flyers knew Pronger would be considered 35 years old for the purpose of the CBA.

I can't say for sure. However, the surrounding circumstances suggest it is possible that the Flyers missed something.

Pronger makes most of his money in the first 5 years of his contract, taking home $33,400.00 of his $34,450,000. In the last 2 years of his deal, however, he makes just $525,000 per season. Pronger would be 40 and 41 years old in those last two seasons.

This strongly suggests that the Flyers and Pronger did not expect the defenceman to play out the last two years of his deal, when he would have been in his 40s. His salary is so low that it suggests that the final 2 years of the deal were included strictly to artificially lower the yearly cap hit. By adding in those 2 years, the cap hit dropped from $6.68 million to $4.9 million.

So if the Flyers didn't expect Pronger to play into his 40s, then it is reasonable to conclude that the team expected him to retire. If that's the case, and assuming no team wants to be saddled with a $4.9 cap hit for 2 years for someone who is playing shuffleboard with Betty White and Gavin MacLeod, then the assumption seems to be that the Flyers may have thought Pronger's salary would not count against the cap since he was 34 years old when he signed the contract.

If the Flyers knew that Proger would be considered 35 years old under the CBA, then his contract would have likely been structured differently.

Any Relief For The Flyers?

The Flyers have placed Pronger on long-term injured reserve (LTIR). By doing so, the team gets some cap relief.

This is explained in Article 50.10(d) of the CBA, which provides that a team may receive cap relief if a player has a "bona-fide long-term injury" that causes the player to miss at least 10 games or 24 days. The test is whether the player is "unfit to play", which according to the CBA includes things like being "injured, ill or disabled and unable to perform his duties as a hockey player".

If a player is placed on LTIR, his cap hit still counts against the team's payroll (50.10(d)(ii). However, the injured player can be replaced with a healthy player even if the replacement player's salary takes the team over the cap. The replacement salary, however, can't exceed the salary of the injured player (50(d)(iii). That's why I call the healthy player a replacement player. It can also be multiple players replacing one player.

The NHL can also challenge whether a player is really unfit to play.

In this case, the big question is whether the Flyers can keep Pronger on the LTIR until his contract is up in 2017?

There is nothing in the CBA preventing the Flyers from placing Pronger on the LTIR until 2017. So long as the team can show that Pronger is "unfit to play", he can sit on the LTIR, which effectively means, his salary won't count against the cap.

So for the Flyers it would make about $5 million dollars more sense to have Pronger sit on the LTIR then retire.


Anonymous said...

nice analysis!

Anonymous said...
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