The Mogilny Decision…

As I was driving home tonight I was listening to the Team 1200 sports radio station here in Ottawa and apparently there is some outrage and misunderstanding about the Mogilny decision today. The announcers were talking about how there are probably 29 other teams who are upset at this decision. Let me say that this is probably not the case and the reason is simple.

The over age 35 and in the second or later year of a multi-year contract rule where the players salary will count against the cap regardless of where or even if he is playing was put in place to stop teams from circumventing the salary cap. Here is how a team might be able to do that.

They could sign 38 year old player X to a 5 year contract that pays him $3 million in year 1 and $500,000 in years 2,3,4 and 5. The average salary will then be just $1 million and the salary cap hit would be just $1 million in year 1 of that contract. There could also be a wink-wink-nudge-nudge agreement between the player and the team that after year 1 the player will retire. If the over 35, multi-year contract rule was not in place the player just made $3 million and the team only counted $1 million against the cap effectively allowing the team to sign another $2 million player. The rule was not in place to shaft a team if one of their older players got seriously injured and could not play.

As for other teams GMs being upset. Do you think the Carolina Hurricanes would be upset at this decision if Rod Brind’amour gets seriously injured this year and can’t play again? Brind’amour just signed a 5 year contract. Do you think the Los Angeles Kings would be upset with this decision if Rob Blake, the guy who signed a 2 year $12 million contract, got injured next month and couldn’t play again? Do you think the St. Louis Blues will be upset considering they have signed Weight for 2 years and $7 million? There are a number of other teams in similar situations. Do you think any of them will be upset at the decision?

On a side note, I wonder which will be the first team to offer a 34 year old a 10 year contract at $5 million per year for the first 5 years and$500,000 for the last 5 years. Makes you think that maybe the biggest mistake the Islanders made in the DiPietro deal is not making it a 20 or 25 year deal with a bunch of $500,000 years at the end of the contract to drop the average salary even more. I mean, they have already committed the real dollars, why not reduce the salary cap dollars in the process.

This article has 14 Comments

  1. I believe they will change this in the off season. Speaking of upset. How about trading Malakhov to the Sharks. He was able to dump 3.6 million. For those of you that don’t know. Malakhov is retired!!!!! He traded a retired player to the Sharks. But he gave the Sharks a No.1 pick so they would do this. BTW, the Sharks have a nice bit of cap room. But I think they should of used this for the playoff run.

    Some people are calling Lou a genius. But why did he get in this pickle in the first place.

  2. They can’t change it. It is written in the CBA. The only way they can change it is if they negotiate with the players and just maybe the players have a few things in the CBA they would like to change as well. In my mind this is the rules and they make total sense.

  3. Well yes, I mispoke….Or in this case mis-typed. I meant to say that when the next CBA would be up. I believe what you say will start to come true and something may have to be hammered out before the CBA is up. This could be abused quite a bit. But if everybody can do it. What the hey.

  4. There will always be loopholes and there will always be GM’s wily enough to find and “exploit” those loopholes. In some ways it’s hardly surprising Lou was the first to do so.

    Everyone has been talking about the Devils managing to dump Malakhov’s $3.6 million but no one seems to remember Jeremy Roenick going to the Kings, along with a draft pick, for basically nothing. Everyone talks about maintaining “wiggle room” under the cap but no one seems to consider that cap space can now also be considered a commodity. San Jose’s roster is pretty well set, and even with Malakhov’s hefty salary under their belt they still sit much further below the $44 million cap than most teams who are expected to contend for playoff spots this year. Unused cap space can’t be saved from year to year so why not get something in return for it?

    DJ, the idea of throwing a bunch of years at $500k at the end of big contracts is very interesting. I for one never thought about that before. I wonder how long before it does happen, now that the idea is out in the open?

  5. Yeah throwing extra years at $500.000 sounds good at first but if you think let’s say you sign a player age 36 ( star player ) for 3 years 7 mill and then throw another 10 years for $500.000 that means you will get the player for 2 mill/year and it will count against your cap for 13 years !!!! Only way out is if the player will get seriously injured ! Retirement will not solve the problem ! Would you take that risk ??? I’m sure that the player won’t risk the rest of his life being paralized ( playing untill he get’s the chance for a career ending injury ) just to help the team get out off the deal !

  6. Hey, just found this site, seems very interesting and very well done.

    Anyway, as for the situation you suggest at the end, re: a 34 year old – I think a lot of players don’t know when they are going to retire when they are 34, and signing such a contract would be rather confining. Same with the DiPietro scenario you suggest. It’s also possible that the league reserves the right to reject any contract – remember when they rejected Owen Nolan’s because it included a lockout payment, for example. It’s unclear what powers the commissioner’s office has in these matters.

    I do expect more players to sign up to their 34th year, however – from there it’s less clear.

  7. The Long-Term Injury provision isn’t a loophole. Mogilny would still be playing for the Devils — or at least counting against the cap — if he didn’t have a chronic degenerative hip condition. Because that’s the actual reason Mogilny had to quit playing, I have no problem with him not counting against the cap.

    Not to say that GMs won’t try everything in their power to convince the league that retiring players have long-term injuries…. 🙂

    There are loopholes in the cap system, though. One is the Wang loophole that he’s trying to exploit with DiPietro’s contract. Should the Islanders buy out DiPietro’s contract next year, they’re on the hook for $2.25 million of cap room for the next *28* years.

    We don’t know if civilization will be around for 28 more years, much less the NHL salary cap.

    On the other hand, if Wang does this with two or three more players, in 20 years the Islanders’ salary cap could be effectively $10 million lower than every other team’s. The Islanders would likely fold at that point.

    Unless the league agreed to nullify the cap hit for new owners — which is probably what would happen.

  8. I think much of the “anger” – real or imagine – stems from the fact that Mogilny was burried in the AHL last season. There’s a belief, right or wrong, that the Devils have intended for this since halfway through last season. I know I for one, until I heard the NHL had required an independent medical review, was skeptical of any NJ team doctor declaring Mogilny unfit to play.

  9. Lippsman, while I agree that it seems shady that Malakhov was traded as a cap number, you have to consider two things before ruling it such:
    1) Malakhov left the Devils midseason, never declaring himself retired. He was suspended by the Devils for failing to report and thus the Devils owe him nothing. He is a defected player and is not retired. Trading the rights of an abandoning player to another team is completely different than trading a retired player to that team. Malakhov is still under contract and if the Sharks want to, they can have him play whereas if he were retired, they really couldn’t.
    2) If 29 other GMs are angry about this, how could the trade happen in the first place? The Sharks’s GM also offloaded a cap number in Alex Korolyuk, who hasn’t played in the NHL since before the lockout. Both Lou and the other GM (his name escapes me) did the same thing, but the Sharks got a first round pick out of it. So what!

  10. So when exactly did Mogilny’s hip ailment become a long term injury? I’d argue before Lou even signed him. Which makes this LTI exemption smell awful.

    I have no problem if AlMo got hurt as a River Rat, but he didn’t. Get injured while under contract, fine, no cap hit.

    Can anyone please point to a game while with the Devils organization where his hip suddenly became irreversibly damaged? That’s what I thought.

    If a GM signs an injured player for whatever reason, said GM should not be able to remove the contract from team salary cap figures at a later date if no further significant injury has taken place. Sorry. Goes against the spirit and intent of the CBA.

  11. Aaron, if just opens up a huge can of worms. Most of the other GM’s are mad about it. Malakhov will never play in the NHL again. Everyone knows that. And even if he did defect. Which is what he did. The Devils were still on the hook for his salary.

    It doesn’t bother me at all. If you can find a loophole use it. But is does go completely against the spirit of the CBA.

    I still believe this will be addressed in the future.

  12. Mogilny has a degenerative hip condition – it is very likely that the initial injury occured when he was a Maple Leaf. He was not playing very much at the end of the season in Albany.

    Mogilny passed a physical in 05-06 – are you seriously contending that the New Jersey doctors lied about his hip condition then? Do you think the Devils didn’t at least find out about the condition of his hip before this, and arranged it all to play out this way? If everything had gone according to plan, Mogilny would still be a Devil and Jamie Langenbrunner would likely be playing elsewhere.

    The NHL would have a gigantic problem if they started to try to pinpoint when players got injured with regard to this new clause. It is now both hips of Mogilny’s that are failing him, by the way – I don’t think anyone’s lying about this. The NHL should have a better process in place to evaluate a player like this – but there’s no doubt that Mogilny is seriously injured.

  13. Ya I feel bad for Mogilny, he definetely deserved better than to end his career this way. The Devils are idiots for signing him to that deal in the first place, they should have known better and of his condition. I still think his salary should count against the cap….a deals a deal in my book.

  14. Definitely no doubt he is injured. I just think he has been injured since his last season with the Leafs, and the Devils muffed their due diligence and signed damaged goods. So, yeah, the 05-06 physical may have found him fit, but obviously from the salary amount to where he spent the season, that physical failed to find what it should have, or may have not been a condition of AlMo’s contract, or could have been performed after he had signed and passed so Lou wouldn’t look like an idiot, or……you get the idea…I could speculate ad nauseum about that physical….doesn’t change the fact that Mogilny was injured before he returned to the Devils, and never returned to NHL-calibre health.

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