Could NHL implement compliance buyouts following COVID-19 shutdown?

The ongoing pause of the NHL’s 2019-20 schedule has raised questions over its effect upon league revenue and the salary cap.

On March 20, the New York Post’s Larry Brooks reported the league informed the NHL Players’ Association that revenue losses for this season could reach as high as $1 billion. That would significantly affect the salary cap for 2020-21.

NHL deputy commissioner Bill Daly earlier this month projected the cap could reach between $84 million and $88.2 million. Assuming the league returned to action and completed the regular season and playoffs, it’s unlikely to recoup enough to reach Daly’s predicted levels.

Following the pause to the schedule, some observers raised concerns the cap could fall below this season’s $81.5 million maximum. However, The Athletic’s Pierre LeBrun last week cited sources claiming the league and the NHL Players’ Association wouldn’t allow that to happen. He believes they could reach agreement on an artificial cap to satisfy both sides.

They could agree to keep the cap at this season’s level. Brooks, however, believes that could inflict havoc on a league in which half of its 31 clubs used long-term injury exemptions to remain under the current ceiling. He suggested the two sides could adopt an amnesty, or compliance, buyout policy to help clubs shed salary without penalty.

He’s not the only one making that proposal. During an appearance last Thursday on the radio show “Oilers Now” with Bob Stauffer, Sportsnet analyst Brian Burke claimed he’d heard some discussion of using compliance buyouts to help clubs adversely affected by a lower-than-projected cap.

The league employed that system following the 2012-13 lockout. Unlike current buyouts, which count as two-thirds the remaining value over twice the remaining tenure of the contract, compliance buyouts didn’t count against a club’s cap payroll. The player was prohibited from rejoining the team via trade, waivers or free agency for one year from the date his original contract was bought out. Each club was allowed two such buyouts spread over two seasons.

In 2013 and 2014, 18 teams used compliance buyouts for 28 players. Among the notables were Brad Richards, Vincent Lecavalier, Scott Gomez, Ed Jovanovski, Wade Redden, Martin Havlat, and Ilya Bryzgalov.

Compliance buyouts would be a godsend for cap-strapped clubs. For example, the defending Stanley Cup champion St. Louis Blues have over $73.7 million invested in 17 players, with defenseman Alex Pietrangelo eligible for unrestricted free agent status. Re-signing him could cost over $9 million annually, leaving no room to fill out the rest of the roster. If compliance buyouts are implemented for next season, they could perhaps shed the $5.75 million cap hit of aging forward Alexander Steen.

Another club that could benefit is the Vancouver Canucks. They reportedly attempted last summer to move winger Loui Eriksson, who’s signed to the end of 2021-22 with an annual average value of $6-million. His cap hit could handcuff management’s efforts this summer to re-sign goaltender Jacob Markstrom, defenseman Troy Stecher, and forwards Jake Virtanen and Adam Gaudette. They also face paying a big raise next summer to rising superstar Elias Pettersson. Getting all of Eriksson’s cap hit off their books would provide much-needed relief.

The Nashville Predators attempted to trade away struggling center Kyle Turris last summer, but couldn’t find any takers for his hefty contract paying out $6 million annually to the end of 2023-24. A penalty-free buyout for a club carrying over $72 million in cap payroll would give them some welcome breathing room.

Other compliance buyout candidates could include Buffalo Sabres winger Jeff Skinner ($9 million AAV), New Jersey Devils defenseman P.K. Subban ($9 million AAV), Ottawa Senators winger Bobby Ryan ($7.25 million) and Florida Panthers goaltender Sergei Bobrovsky ($10 million).

It’s still too early to tell if the league and the PA will agree to a compliance buyout plan following this season, let alone if it’ll follow the same rules as those following the last lockout season. Nevertheless, it could be an option worth exploring to help clubs squeezed by a flat cap.

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