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How the NHL’s new salary trading system works

Toronto Maple Leafs general manager Brian Burke

Reuters

Here's an interesting new rule NHL general managers should be able to have a lot of fun with.

Or at the very least get out of some of their most egregious mistakes.

Teams will in the new collective agreement be able to for the first time under a salary cap keep salary on their books and trade part of a contract.

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There are four golden rules that apply to retaining salary:

1. Teams can only have three contracts on the books where they've retained salary in a trade

2. Teams can keep only up to 15 per cent of the salary cap in a given year, meaning they would max out at $9.645-million under the $64.3-million cap that's likely to be in place in 2013-14 and 2014-15

3. Only 50 per cent of a contract can be kept

4. A contract can only be traded in one of these deals twice

This is going to be a fairly complicated provision in the deal, and one that will make following the salary cap machinations of teams even more difficult.

Let's use some examples here to make the rule easier to understand, with the cap-strapped Montreal Canadiens and (likely) unwanted defenceman Tomas Kaberle as the guinea pigs.

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Kaberle has two seasons left on his deal, both for $4.25-million in both salary and cap hit. The Habs can then choose to keep $2.125-million of that, continue to pay half his contract, but gain the rest in cap space by sending him to another team.

Let's say the New York Islanders take on that deal. They will be on the hook for two more years of both cap hit and salary.

If the Isles then choose to move him, they can then keep up to $1.06-million of Kaberle's contract and another team will get him for that paltry amount.

This gets a little more complicated with a more complicated contract. Let's say Roberto Luongo is in fact traded from Vancouver to Toronto, and one of the things the Canucks decide to do is keep $1-million of the cap hit (or 18.8 per cent).

That would then mean they're on the hook for that amount of the remaining salary (just under $9-million) and would be stuck with a $1-million cap hit for a long, long time.

(Which is why it's unlikely they agree to do so.)

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Because only 50 per cent of the deal can be kept, however, the rule functions much like re-entry waivers did previously, and we saw how few teams were willing to eat that high of a cap hit over time.

The New York Rangers, for example, wouldn't put Wade Redden on re-entry waivers because they didn't want more than $3-million in dead space, and it stands to reason teams won't be clamouring to push up against the 15 per cent limit.

On the other hand, if you're a GM out there and you see some value in an unwanted player at a lower cap hit, perhaps you offer to take a Rene Bourque or someone of that ilk at 70 or 80 per cent of his remaining salary.

This could be a fascinating new wrinkle in that way, as we've often seen players become untradeable due to their contracts and GMs like Brian Burke have pushed to allow more creativity in deals.

Whether it dramatically ups the number of trades being made remains to be seen, but that's the hope from NHL executives right now.

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About the Author
Hockey Reporter

James joined The Globe as an editor and reporter in the sports department in 2005 and now covers the NHL and the Toronto Maple Leafs. More

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