NHL Investigating Contracts of Pronger and Hossa

I’m not going to lie – I follow the Blackhawks more than any other team. I illustrated that in my first post here, “Will the Chicago Blackhawk’s Offseason End?” But this is an issue close to my heart for reasons that for the good of the NHL. I try not to be bias, and I do not think I am here.

It was been reported at the end of July that the new contracts of Marian Hossa, and Chris Pronger are under investigation by the NHL to see if they are “circumventing the CBA.” Hossa is scheduled to earn close to eight million the first handful of years in his contract, and in the last four years, it diminishes to nearly nothing.

Why is this a problem? Even though Hossa is getting that $7.9 million his first year his cap hit is closer to $5 million. In theory, if a team executed this constantly, they could actually be paying out $65 million to your team, and have a cap hit of only $55 million.

“But its twelve years,” you say. “When Hossa is making less than $1 million, his cap hit will be $5 million.” That is true for the ‘Hawks under two conditions. Hossa is still playing and is in Chicago.

Teams like Nashville, Los Angeles, and Phoenix all have some sort of financial issue, and are not able to spend money like Chicago, Philadelphia and other teams with plenty of money. Last year, the Kings had an issue with the cap – making the floor. A contract where the cap hit may be $5 million and you only pay the player $1 million looks very good, doesn’t it? After all, the organization is a business.

But what if Hossa retires 7 years into his contract? Because Hossa signed when he was under the age of 35, if Hossa retires for whatever reason he still gets paid his money and his cap hit goes away. In this scenario, the ‘Hawks would have had a collective cap hit of $36.4 million, and truly paid out $55.3 million – a difference of close to $19 million.

Chris Pronger’s contract is being investigated for the same reason as Hossa, but there’s a catch with Pronger. Does the contract signed mean his cap hit counts even if he doesn’t play? “But Pronger was 34 when he signed!” This is true, but the contract extension becomes effective when he’s the age of 35. Philadelphia rightfully challenged this ruling, and the CBA is a bit fuzzy in my opinion as to which category the extension falls into. If the NHL rules that Pronger counts no matter what, this will be a huge setback for Philadelphia.

I first noticed this “loophole” in contracts a while back when Detroit started handing out similar, but less extreme contracts. It did not occur to me that there’s a difference in cap hit, and actual salary until then. I thought it was just player preference. As long as the player retires before the actual salary is lower than the hit, usually these are smart deals for both sides.

To me, without question that the contracts of Pronger and Hossa were intended to get around the cap. The structure of their contracts say it all and the player’s are not going to care too much about when the money comes in. Where I have a big problem with the investigation is the NHL approved both contracts, then came back a month later and investigated them. The Flyers and Blackhawks did not give contracts that other teams cannot offer. These contracts are legal under the CBA and neither team should be punished for giving them out. But the teams where players do not want to go, like Edmonton, just lost the ability to overpay for players to come there. The big market teams are still able to throw their money around and overpay players under the CBA and that was the reason everyone lost the 2004-2005 season. Teams such as the Rangers were able to carry a team salary of $80 million, where Edmonton cannot get a player to come there.

My solution is simple. Modify the 35 and older part of the contracts to include everyone. For example, if you are 26 and sign a 20 year deal, you are going to have a cap hit no matter what for 20 years. If you get hurt, that’s part of the game. Every team runs that risk. This will discourage teams from handing out these long contracts. I also am a firm believer in if your salary is $5 million, your cap hit should be $5 million. You are only creating potential problems by making the salary hits and actual salary different.

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