What Is A Compliance Buyout?
In the next couple of weeks, you are going to hear the term compliance buyout on the radio, TV or talking hockey on Twitter. I’ve tried to put a simple explanation together for those of you that don’t quite understand the lingo. I have also attached a couple of links for more information if you wish to delve deeper into the explanations.
In the simplest terms, the league and players created a tool to help teams dump salary.
In the new Collective Bargaining Agreement negotiated between the NHL and the NHLPA, member teams were permitted two “compliance” buyouts to take place during the 2013 and/or 2014 off-seasons in order to ease the transition to a lower salary cap.
The salary cap needs to transition from 70.2 million this past season to 64.3 million for the upcoming 2013-14 season. The compliance buyout works the same as the regular buyout as explained by capgeek.com. ☛ ☛ ☛ ☛ click here
The new agreement allowed teams to use one of those compliance buyouts prior to the start of this past season (lockout season) but the player’s full salary for the 2012-13 season still counted against the team’s (70.2 m) salary cap.
The league allowed teams to execute one of their two compliance buyout options prior to this past season if the players cap hit was more than $3 million. The Montreal Canadiens used one of theirs on Scott Gomez and the New York Rangers on Wade Redden. The players received full pay and it is counted at their full cap hit for 2012-13 after which the compliance buyout payments kick in.
For one season following a compliance buyout, the player is prohibited from rejoining the team that bought him out.
Players that are bought out, will become unrestricted free agents eligible to sign with any team. Wade Redden signed with St.Louis and Scott Gomez signed with San Jose.
NHL teams can start the buy-out process 48 hours after the completion of the “Stanley Cup Finals.” Then the teams have until the start of the “Free Agent” period starting on July 5th to submit those buy-outs to the league. For you arm-chair GM’s out there, I have linked the ☛ ☛ “Buy-out Calculator” ☚ ☚ and you can figure out the buyouts for your “favorite” players.
There are many names being mentioned as candidates for this buy-out but it’s not that easy stroking a cheque for the amounts of money being talked in these buy-outs. It makes interesting discussion though.
I’ll list a few names below and you can use the draft calculator to figure out the money.
Ilya Bryzgalov – G, Philadelphia ✔
Brad Richards — C, Rangers:
Roberto Luongo – G, Vancouver
Mike Komisarek – D, Toronto ✔
Daniel Briere – F, Philadelphia ✔
Keith Ballard – D, Vancouver ✔
Anton Volchenkov – D, New Jersey
Dany Heatley – F, Minnesota
Vincent Lecavalier – C, Tampa Bay ✔
Note: Due to signing bonuses in his contract, the Lightning pay Lecavalier an additional $8 million over the next three seasons.
Under the current Collective Bargaining Agreement, each team is permitted two compliance buyouts before July 1, 2014. The buyouts do not count towards a team’s salary cap obligations.
Not included in the above list are buyouts made during the 2012-13 season by the Montreal Canadiens and the New York Rangers on Scott Gomez and Wade Redden respectively.
1. If a player is older than 26 at the time of the buyout, they get two-thirds of the money remaining on their contract.
2. Players who are younger than 26 at the time of the buyout will get one-third of the money remaining on their contact.
3. The team buying out players must pay out the money owed over a period of twice the remaining length of the contract.
Discuss amongst your-selves as it should prove to be very interesting. There may be some very useful players that become available at bargain basement prices.
Once again, keep in mind the next window for this buyout is 48 hours after the Cup final to July 5.