After retiring over the summer after 19 NHL seasons — including 11 years with the Florida Panthers and eight years with the Vancouver Canucks — goaltender Roberto Luongo rejoined the club as a special advisor to general manager Dale Tallon this month.
And for Vancouver general manager Jim Benning, the situation is less than ideal. Luongo's retirement last summer meant the Canucks are on the hook for over $3 million in annual salary-cap recapture penalties over the next three years. Meanwhile, Luongo's back to drawing paychecks from the Panthers.
“I wanted to voice our displeasure with the whole thing,” Benning told the Vancouver Sun's Ben Kuzma.
His concern is Luongo is recouping money he left on the table by retiring in June. Benning said the Panthers are allowed to hire Luongo as long as it's a market-level position at an entry-level salary comparable to a similar position in the league.
“I don't know what he's getting paid,” Benning added.
A source told The Athletic's Pierre LeBrun it's nowhere close to Luongo's former salary, guessing it's around $200,000.
Benning also acknowledged there's little his club can do under the salary-cap recapture rules in the current collective bargaining agreement; he and his club are paying the price for his predecessor, employing a form of salary-cap circumvention allowable under the former CBA when Luongo signed his 12-year contract a decade ago.
Back then, several teams signed a handful of players to exceedingly long, heavily front-loaded contracts as a mean of garnering a more favorable annual salary-cap hit. The league shut down that loophole under the present CBA, limiting contracts to eight years for re-signings and seven for unrestricted free agents, as well as placing limits on how much contracts can be front-loaded.
The salary-cap recapture penalty was also implemented, which goes into effect when a player carrying one of those lengthy contracts retires. It affects the club that signed him to the deal, as well as any club that acquires him via trade or waivers.
In Luongo's case, Vancouver got tagged the hardest because the team signed him to that long-term contract. The Panthers are also penalized, though they pay a more affordable $1.09 million annually.
Currently, 13 players carry those lengthy, front-loaded contracts, as per CapFriendly.
Zach Parise/Ryan Suter
*Contract originally signed with Nashville; ^Contract originally signed with Chicago; "Contract originally signed with Philadelphia
Three of them — Hossa, Zetterberg and Franzen — are all but retired due to injuries or chronic ailments, leading their respective teams to place them on long-term injury reserve. That provides those clubs with salary-cap relief if needed while assuring they won't be tagged with recapture penalties.
Backstrom's contract expires next July and Ovechkin's in 2021 so the Capitals have no fear of cap recapture there.
That leaves eight — Weber, Keith, Parise, Suter, Crosby, Carter, Quick and Staal — with the potential to create cap-recapture headaches down the road. Most could play out the remaining term of their respective deals. Injuries could force some with long injury histories, such as Parise and Quick, onto the permanent LTIR.
The one to watch is Weber. Nashville matched a hefty offer sheet from the Philadelphia Flyers in 2012 before the last NHL lockout and the current CBA. In 2016, they traded Weber to the Canadiens for P.K. Subban. Both clubs could see cap recapture penalties but the Predators will bear the heaviest burden.
LeBrun recently posted a breakdown of the potential recapture penalties facing the Predators. Their portion, if he retires next year or in 2021 would be over $4 million annually, or over $6 million per season if he pulls the chute in 2022.
Those numbers are bad enough, but it's the penalties in the final three seasons that's concerning.
If Weber retires in 2023, the Predators will be tagged with over $8.1 million in annual recapture penalties. If he goes in 2024, it jumps to over $12 million annually. Should he retire before the final season of his contract, the Preds get walloped with over $24 million.
LeBrun reports the league has no intention of doing away with the cap recapture penalty. However, he said there have been discussions about amending the formula under the next CBA to soften those penalties by spreading them out over a longer period.
In the meantime, Predators fans — as well as the organization — should hope that the Habs captain doesn't retire before his contract expires.