{"id":80774,"date":"2020-07-20T07:51:14","date_gmt":"2020-07-20T11:51:14","guid":{"rendered":"https:\/\/lastwordonhockey.com\/?p=80774"},"modified":"2020-07-20T07:51:14","modified_gmt":"2020-07-20T11:51:14","slug":"nhl-flat-salary-cap-intensifies-luongos-cap-recapture-penalty","status":"publish","type":"post","link":"https:\/\/lastwordonsports.com\/hockey\/2020\/07\/20\/nhl-flat-salary-cap-intensifies-luongos-cap-recapture-penalty\/","title":{"rendered":"NHL Flat Salary Cap Intensifies Luongo\u2019s Cap Recapture Penalty"},"content":{"rendered":"

NHL flat salary cap<\/a> of $81.5M for two seasons and $82.5M the season thereafter intensifies Luongo’s infamous cap recapture penalty impact on Vancouver. A team looking to sign numerous Unrestricted Free Agents (UFAs) and Restricted Free Agents (RFAs) this off-season.<\/p>\n

Luongo’s Cap Recapture Penalty Impact on an NHL Flat Salary Cap<\/h2>\n

Introduction of the Cap Recapture Penalty<\/h3>\n

In 2009 Mike Gillis and Laurence Gilman found a loophole in the NHL\u2019s Collective Bargaining Agreement (CBA). This was used to sign Roberto Luongo<\/a> to a front-loaded 12-year deal worth $64 million overall. Allowing the goaltender\u2019s cap hit to be roughly $5 million in Average Annual Value (AAV). The deal saw Luongo earn $10 million from 2010-11. But this would fade out to $1 million in the final two years of his contract. Luongo was quoted saying \u201cmy contract sucks\u201d after not being moved at the trade deadline of April 2013.<\/p>\n

Luongo\u2019s was not the only deal like this helped the 2011 Canucks be as successful as they were. The NHL hated this bending of the rules. So the league introduced the cap recapture penalty clause into the CBA. This clause is fittingly nicknamed \u201cThe Luongo Rule\u201d.<\/p>\n

Luongo’s Trade and Retirement<\/h3>\n

Luongo was eventually traded back to the Florida Panthers a day before the NHL trade deadline of 2014. This trade included Luongo and Vancouver prospect Steven Anthony in return for Jacob Markstrom and Shawn Matthias. However the Canucks retained part of Luongo\u2019s salary in order to offload the contract.<\/p>\n

With eight years remaining on his contract. The veteran goaltender would play the remainder of his career at the franchise he debuted for in 2000. Having his jersey retired<\/a> at BB&T Center.<\/p>\n

Luongo retired<\/a> in June of 2019 with three years remaining on his contract. This retirement was the news Canucks fans did not want to hear. The cap recapture penalty meant the league believed the Canucks profited approximately $9M whilst Luongo was in the team. Therefore the Canucks were hit with a $3.033 million cap recapture penalty over the next three years.<\/p>\n

Effect on Vancouver\u2019s Salary Cap<\/h3>\n

At the conclusion of this pandemic paused season. Year one of \u201cThe Luongo Rule\u201d will have completed. However, as the pause impacted the NHL\u2019s revenue this season. The salary cap remains flat at $81.5M for the remainder of the Luongo\u2019s cap recapture penalty. Therefore, before even looking at the other bad contracts in Vancouver\u2019s roster. The Canucks salary cap for the next 2 seasons would start at approximately $78.4M.<\/p>\n

This is not a good sign when Vancouver is looking to lock in pending UFA\u2019s such as Tyler Toffoli<\/a>, Jacob Markstrom<\/a>, and Chris Tanev<\/a>. But these are not the only contracts ending this season. Jake Virtanen<\/a>, Tyler Motte<\/a>, Adam Gaudette<\/a>, Zack MacEwen<\/a>, Troy Stecher<\/a>, Oscar Fantenberg<\/a>, Louis Domingue<\/a>, and Josh Leivo<\/a> all become RFAs or UFAs after this season.<\/p>\n

The Canucks need to be smart in their dealings this off-season. It has been a good start with the signing of Jack Rathbone to an entry-level contract (ELC) of $2.775M over three seasons. But Vancouver has a long way to go in straightening up the books whilst staying competitive. And this cap recapture penalty from a contract signed a decade ago does not help the situation.
\nEmbed from Getty Images<\/a>