The Vadim Shipachyov Buyout Situation – A Financial Powerplay By SKA St. Petersburg

The leading scorer in this year’s IIHF World Championship, and the first line centre for KHL team Ska St. Petersburg, Vadim Shipachyov has been rumored to be on NHL team’s radar for months.  In April Igor Eronko of Sport Express reported that Shipachyov, along with Evegeni Dadonov, and Denis Guryanov were attempting to terminate their KHL contracts to come to North America.  Since that time Shipachyov has been heavily linked to the Montreal Canadiens, including by Eronko, Elliotte Freidman of Sportsnet, and Yvon Pednault of le Journal de Montreal.

Earlier this week the deal seemed to hit a snag with Friedman reporting that SKA St. Petersburg believes that Shipachyov still owes the team one-year under his KHL contract.  Friedman clarified that short tweet earlier today with an explanation that SKA is looking for $700,000 in order for buy out Shipachyov to be bought out of the final deal of his NHL contract.

Now Friedman went on to say that he wasn’t sure if this was even possible, or if the NHL would allow a team to buy a player out of a deal.

The short answer, Friedman is correct when he states that an NHL club would likely not be able to directly buy out the contract of a KHL player. There are a number of problems here, including benefits given to a player outside of the CBA/Salary Cap, and the issue of tampering with a KHL contract that is frowned upon by the IIHF.

However, this isn’t to say that another method could not be used that would comply with both the NHL CBA, and the IIHF rules.

Precedent: Jonas Frogren

In 2008, the Toronto Maple Leafs gave defender Jonas Frogren a $700,000 signing bonus.  He used $400,000 of the money to buy out his contract with Farjestad of the Swedish Elite League.

Now for those of you who remember the situation, or clicked the link to the 2009 story, remember that the Leafs were fined $500,000 by the NHL and had to forfeit a draft pick (4th round) because of this move.  And so it seems that this precedent shouldn’t be followed and the NHL would strongly discourage teams from doing so. However, the idea of giving a player a signing bonus which he uses to buy out his contract was not what the NHL objected to, nor was it what the Leafs were punished for. That action in itself was legal.

The reason the Leafs were punished is that Frogren (as a 24-year-old at the time) fell under the NHL CBA’s Entry Level Contract scale, and a $700,000 signing bonus was more than what was allowed under that rule. With Shipachyov being 29-years-old, his bonus is not limited by the ELC rules, and thus a team could pay him to buy out his KHL contract.  This bonus would of course be counted as salary under the Salary Cap, and no circumvention would occur.

Whether a team is willing to give an extra $700,000 in bonus money (and cap hit) over and above the salary needed to sing Shipachyov is the question. However if someone is willing to do so, it can be done and would not be in violation of any known NHL or IIHF rules.

Now we also know from Igor Eronko that SKA is claiming that Shipachyov missed the deadline for filing his termination papers and would not be available til December.  From watching a variety of transfer sagas in other European sports, specifically soccer/football (something this can best be described as right now) this seems like a ploy to try and get more than the $700,000 in a buyout for a player who clearly wants to leave.

Russian World Cup Team

In another interesting development, Shipachyov was named to Russia’s World Cup team today.  This is interesting because by the time the World Cup of Hockey is played in September the KHL regular season will already be in full swing.  The KHL had earlier indicated that it was unlikely to release players for the non-IIHF sanctioned, NHL/NHLPA tournament.  Shipachyov is one of only four KHLers who has been released.

The others, Dadonov (a player in a similar situation to Shipachyov right now), Slava Voynov (a player unlikely to actually be allowed to play in the tournament), and Ivan Telegin (a player who the Winnipeg Jets allowed to go to Russia despite the fact he had a valid ELC in the NHL).  With bigger names like Ilya Kovalchukwho like Dadonov and Shipachyov also plays for SKA, not being allowed to participate by his club team, it raises the question, has SKA already acquiesced to the fact that Shipachyov will not be back next season, and are merely trying to get the biggest pay day possible?

 


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