Forgive me ahead of time if I deviate from the Rangers’ theme a little on this but since we have discussed the merits of buying out the remaining term of Wade Redden’s contract ad nausea in the various threads, I’ve given some thought to the general principle of buyouts.
As I am sure most of us know, the ability to buyout a player’s contract was negotiated into the CBA during the last round of negotiations. With the implementation of the salary cap, the buyout function gives managers a chance to extricate the team from “cap-killing” contracts.
Of course, since the cap was intended to keep big money teams from out-spending their small market brethren, buying out a player’s deal doesn’t come without some penalty. Otherwise a team like the Rangers may have already bought out a few players.
Basically, the team that buys a player out is still on the hook for 2/3 of the remaining salary left on the life of the contract. That figure is then spread out over twice of the remaining term of the deal.
For purposes of illustration, I’m going to look at what buying out Wade Redden does to the Rangers cap situation over the next several seasons. Wade had 4 years left on a deal that averages $6.5 million per. His remaining “actual salary” is $23 million. Below is the annual cap hit that the Rangers would incur according to www.capgeek.com
WADE REDDEN BUYOUT FROM CAPGEEK.COM
With 4 years left on his deal and an annual cap hit of $6.5 million, the Rangers would see significant cap savings (more than $4.5 million) in the first two years and moderate savings in years 3 and 4 (a shade more than $3 million). After that time, when Redden’s contract would have expired, the Rangers would be carrying nearly $2 million in dead cap space for 4 years.
The numbers don’t make buying out Redden’s contract very palatable. For a Rangers team that is struggling on the ice and looking for ways to improve a roster that is light on offensive skill, not having much cap space is proving to be an obstacle too large to overcome. Most teams are in a similar bind as the Rangers and are not willing or interested in taking on salary so trades are difficult to make.
If the Rangers are going to improve the on-ice product, they are going to have to find a way to create cap space. Even if the option of a buyout was an attractive one, the window in which teams can buy players out doesn’t come around until the offseason.
It might be that the best way to create the cap space necessary to make a move is by demoting a player with a high salary. That brings me back around to Wade Redden and why I think the NHL may need to re-visit the practice of contract buyouts.
Imagine if New York were to demote Redden to Hartford so they could acquire another player. Would the Rangers ever again feel inclined to recall Redden? Depending on whom they might acquire with Redden’s $6.5 million cap hit safely in the AHL and what they do this offseason, the Rangers may not even have enough cap space to bring Redden back up from Hartford.
Essentially then the Rangers would be effectively ending Redden’s NHL career prematurely. I wouldn’t feel too badly since he’ll still make his money but what about at the conclusion of his contract? Would anyone want a 37 year-old defenseman that had spent the previous 4 seasons in the minors? Not likely.
Of course I find it incredibly unlikely that Redden would happily play out the balance of his contract in Hartford but I suppose anything is possible. Lord knows I would be the happiest guy in Hartford if I were being paid $23 million over the next four years to play a little puck.
The bottom line is that the best alternative for the Rangers to create the cap space needed to improve this lackluster roster is to demote (perhaps permanently) a player like Wade Redden. How does that move benefit the league as a whole, Wade Redden and therefore the player’s association, and small market teams?
Demoting players to the minors to clear cap space has been done before; I seem to recall that the Devils dropped Alexander Mogilny to the minors just after the lockout. But this type of move can end a career for all intents and purposes. Why not fix the buyout provision to make it easier for a team to buy a player out of his deal. In that scenario, the player becomes an UFA and is free to continue his NHL career rather than spending the duration of his contract in purgatory.
I realize that teams need to be punished for mistakes in free agency and that big market teams can’t be allowed to buy their way out of cap hell. The salary cap was introduced as a way to level the financial playing field between the haves and the havenots. Circumventing cannot be allowed.
Still, there has to be something that can be done to appease all sides. I don’t want to see careers ended prematurely because a GM was too clueless to pay a player appropriately. I certainly can’t fault the player for accepting the outrageous salary in the first place.
So my fellow HB readers, what do you guys think? Should the buyout provision be fixed? Is it even broken in the first place? What would you do?