Daddy needs a new pair of shoes, so buy me out baby...

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Daddy needs a new pair of shoes, so buy me out baby...

Postby ukcanuck » Thu Jun 20, 2013 10:42 am

Ok that's now three players bought out under the new CBA compliance buy out provision, and with more surely to come...
Viola, a thread for it.

What's the deal with this buyout thing anyway? Who pays, the team or the owner?

What I mean is, if I am aqua linguini and Luggage eyes wants to but out Ballard for example, who is owed another 8.4 mil according to cap geek. Do I have to cut a check from my personal stack or can I have the team pay it and roll that debt into the equity of the organization?
once its off the payroll it's not a cap issue anymore but it's still a cost that reflects on the balance sheet, can I get a tax break?

Furthermore does Ballard get a one time pay off or does he get it in increments over time, like say the the two years on the contract still remaining ?

Could aqualung deposit 10 million with investors group and third party sign the dividend cheques ?
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Re: Daddy needs a new pair of shoes, so buy me out baby...

Postby Hockey Widow » Thu Jun 20, 2013 11:47 am

I believe it is something like 2/3 of remaining salary over double the term left on the contract, or something like that.

It does not count against the cap but it does count against the players percentage of revenue sharing.

So with Ballard being owed 8.4 you take 2/3 and you get 5.5 approximately he is owed over 4 years (double his remaining term) for about 1,375,000 per year. It would be paid by the club and is independent of any salary he makes on a new contract he gets as a FA.

Thats why buying out players like Luongo, Bryz and Dipietro are so costly to the team and only the wealthy teams can really afford to do that. But since it has no impact on the cap it makes sense under the right circumstances.

With Luongo having 9 years left on his contract we would at around 64 million we would be paying him for 18 years around 2.3 million per season. Dipietro's numbers work out to something like 1.2 per year for 8 or 10 years. Bryz is around 14 years with around 1.8 per. But again since it does not reflect on the cap as a fan I see no worries with it. If the team has the coin then big deal and as far as revenue sharing there is no double dipping because it still counts against the players share.
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Re: Daddy needs a new pair of shoes, so buy me out baby...

Postby Cornuck » Thu Jun 20, 2013 12:02 pm

The Philadelphia Flyers announced Thursday that the team will buy out the final two years of the contract of forward Danny Briere.
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Re: Daddy needs a new pair of shoes, so buy me out baby...

Postby Strangelove » Thu Jun 20, 2013 12:57 pm

Hockey Widow wrote:I believe it is something like 2/3 of remaining salary over double the term left on the contract, or something like that.

It does not count against the cap but it does count against the players percentage of revenue sharing.

So with Ballard being owed 8.4 you take 2/3 and you get 5.5 approximately he is owed over 4 years (double his remaining term) for about 1,375,000 per year. It would be paid by the club and is independent of any salary he makes on a new contract he gets as a FA.

Thats why buying out players like Luongo, Bryz and Dipietro are so costly to the team and only the wealthy teams can really afford to do that. But since it has no impact on the cap it makes sense under the right circumstances.

With Luongo having 9 years left on his contract we would at around 64 million we would be paying him for 18 years around 2.3 million per season. Dipietro's numbers work out to something like 1.2 per year for 8 or 10 years. Bryz is around 14 years with around 1.8 per. But again since it does not reflect on the cap as a fan I see no worries with it. If the team has the coin then big deal and as far as revenue sharing there is no double dipping because it still counts against the players share.


http://www.capgeek.com/buyout-calculato ... uyout_d=20

Capgeek is our friend. :wink:

Ballard: 2/3 of $8,400,000 = $5,600,000 = $1,400,000 times 4 years.

Luongo: 2/3 of $40,570,000 = $27,046,667 = $1,502,593 times 18 years.

Dipietro: 2/3 of $36,000,000 = $24,000,000 = $1,500,000 times 16 years.

Bryzgalov 2/3 of $34,500,000 = $23,000,000 = $1,642,857 times 14 years.


If I'm Aquaman, I'd rather retain a little of Ballard's salary (if I had to) rather than buy him out.

If I'm Aquaman, I'd rather save that Compliance Buyout for the bad contract that comes with a good young player.

If I'm Aquaman, I'd realize the lower cap-hit on that good young player more than offsets the KB4 retention $$$.

If I'm Aquaman, I'd jump at the opportunity to buyout the in-coming bad contract

... in exchange for a better long-term product on the ice. 8-)
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Re: Daddy needs a new pair of shoes, so buy me out baby...

Postby Strangelove » Thu Jun 20, 2013 1:01 pm

ukcanuck wrote:What's the deal with this buyout thing anyway? Who pays, the team or the owner?


Team.
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Re: Daddy needs a new pair of shoes, so buy me out baby...

Postby Hockey Widow » Thu Jun 20, 2013 1:01 pm

Well, I was close for shooting from the hip no ?
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Re: Daddy needs a new pair of shoes, so buy me out baby...

Postby Strangelove » Thu Jun 20, 2013 1:03 pm

Hockey Widow wrote:Well, I was close for shooting from the hip no ?


Pretty close, yep. :wink:
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Re: Daddy needs a new pair of shoes, so buy me out baby...

Postby ESQ » Thu Jun 20, 2013 1:33 pm

Strangelove wrote:If I'm Aquaman, I'd rather retain a little of Ballard's salary (if I had to) rather than buy him out.

If I'm Aquaman, I'd rather save that Compliance Buyout for the bad contract that comes with a good young player.

If I'm Aquaman, I'd realize the lower cap-hit on that good young player more than offsets the KB4 retention $$$.

If I'm Aquaman, I'd jump at the opportunity to buyout the in-coming bad contract

... in exchange for a better long-term product on the ice. 8-)

Salary retention is something that hasn't been talked about at all. A maximum of 50% of the contract can be retained, so does a $2.1 million Keith Ballard actually net you a decent return? You'd be looking at net cap savings of around $1.5 million assuming Corrado takes the roster, or about $1 million if Alberts is re-signed for that 6/7 d role.

I gotta believe a cash-strapped team, for example the Coyotes, would give up a 2nd or 3rd rounder for a deeply-discounted Keith Ballard.

If YOU are Aquaman, what do you think about retaining some of Lu's salary? Retaining something like $500,000 takes Luongo's cap hit from middle-of-the-pack to well at the bottom of starting goaltenders. It might be a minor enough amount to have a minimal impact, even though it will count against the cap for a decade.
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Re: Daddy needs a new pair of shoes, so buy me out baby...

Postby ukcanuck » Thu Jun 20, 2013 1:40 pm

The reason I ask is this rumour that linguini is not happy with buyouts, as if its coming out of his kids college fund.

Seems to me that's illogical.

To be blunt I don't see how the Canucks can't use these buyouts to reload the core. This market won't support a flames style withering away at the prices they charge at Rogers.

There might be patience for a full tank and rebuild but the cash register won't be ringing and songs till the team is back as serious contenders
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Re: Daddy needs a new pair of shoes, so buy me out baby...

Postby Strangelove » Thu Jun 20, 2013 1:46 pm

ESQ wrote:If YOU are Aquaman, what do you think about retaining some of Lu's salary? Retaining something like $500,000 takes Luongo's cap hit from middle-of-the-pack to well at the bottom of starting goaltenders. It might be a minor enough amount to have a minimal impact, even though it will count against the cap for a decade.


If it improved the quality of the return, sure why not. :drink:

Something I've been wondering is:

Would a Compliance Buyout negate the future Cap Recapture penalty?

I've searched for the answer to that question, I don't think the answer is out there.

I wish the media would ask folks like Gilman these kinds of questions.
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Re: Daddy needs a new pair of shoes, so buy me out baby...

Postby dbr » Thu Jun 20, 2013 1:47 pm

I'd think long and hard about retaining salary on a player I want to deal, depending on the return.

Losing $1m and change off your cap number is a pain but it's probably the difference between having a kid on an ELC contributing to your third line and going out and signing a free agent to play the same role - not the end of the world.

If you believe the cap is going to resume its indefinite rising starting next year, that kind of dead cap space may not be a major issue at all.

If it's the difference between having to dump Roberto Luongo for next to nothing (a handful of middling draft picks), or having him as one of the offseason's hottest commodities, it'd be worth considering.
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Re: Daddy needs a new pair of shoes, so buy me out baby...

Postby Strangelove » Thu Jun 20, 2013 1:50 pm

ukcanuck wrote:The reason I ask is this rumour that linguini is not happy with buyouts, as if its coming out of his kids college fund.

Seems to me that's illogical.


Yup, the rumour doesn't pass the sniff test.

And Botch and Iain Mac have both called bullshit on it.
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Re: Daddy needs a new pair of shoes, so buy me out baby...

Postby Strangelove » Thu Jun 20, 2013 1:53 pm

dbr wrote:If you believe the cap is going to resume its indefinite rising starting next year


One would have to assume, with the new CBA in place, that the cap is going to rise like never before.

Wouldn't one?
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Re: Daddy needs a new pair of shoes, so buy me out baby...

Postby ESQ » Thu Jun 20, 2013 1:58 pm

Strangelove wrote:
ukcanuck wrote:The reason I ask is this rumour that linguini is not happy with buyouts, as if its coming out of his kids college fund.

Seems to me that's illogical.


Yup, the rumour doesn't pass the sniff test.

And Botch and Iain Mac have both called bullshit on it.

I think you'll see some change to Aquilini's approach to the team on account of his ongoing and massively-expensive divorce. He's about to lose a massive portion of his wealth so the piggy bank might not be opened so readily, at least until the dust settles.
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Re: Daddy needs a new pair of shoes, so buy me out baby...

Postby BladesofSteel » Thu Jun 20, 2013 2:10 pm

Not sure if this has been discussed, but are the compliance buy-outs only an option for this summer? Tha is, the two buy-outs that do not count against the cap.
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