NHL's compliance buyouts are similar to NBA's amnesty concept
Rick DiPietro was one of the NHL players on the negotiating committee during the four-month lockout that preceded the 2013 season. Even before he began sitting in on some of the meetings between the NHL Players Association and the league, before things got so contentious that the first half of the season disappeared, DiPietro knew of the possibility that compliance, or amnesty, buyouts could be part of a new collective-bargaining agreement.
Compliance buyouts allow a team to pay two-thirds of the remaining value of a contract (one-third if the player is under 26) over twice the remaining length. DiPietro had eight years and $36 million remaining on his deal. With his buyout, he gets $24 million total, paid out over 16 years.
"You saw it happen with the NBA deal and it's happened in hockey before, so it's always possible to have that," DiPietro said in April 2012, when the Islanders gathered for the final time after missing the postseason. "But that's out of my control even if it happens."
It did happen to DiPietro this past week, just as it happened to 17 other players with contracts during the buyout period that ended with the start of free agency on Friday. It was 18 players and more than $120 million in payouts to not play. DiPietro's is the longest buyout; he'll receive $1.5 million for each of the next 16 seasons from the Islanders.
Close behind are the 14-year buyout periods for Vinny Lecavalier ($32.67 million total, the largest buyout number) and Ilya Bryzgalov ($23 million total). Of the 18 players, six already have new deals, led by Lecavalier's five-year, $22.5-million deal from the Flyers, who already have used both of their allotted compliance buyouts.
Teams get two compliance buyouts to use either this summer or next; the Rangers, with Wade Redden, and the Canadiens, with Scott Gomez, already used one in a special buyout period before the shortened season began in January.
As DiPietro noted, the NBA has had amnesty buyouts. Major League Baseball doesn't need them because there is no hard salary cap. The NFL has non-guaranteed contracts and allows for restructuring, so amnesty buyouts aren't necessary there, either.
The owners' side was content to have its general managers work within the confines of the new CBA, with a salary cap that dropped from $70.3 million (prorated) in 2012-13 to $64.3 million for next season, to get under the cap. It was the NHLPA that proposed adding compliance buyouts, according to two people familiar with the talks.
It came down to money paid out to the other side: Compliance buyouts allow for more contracts to be signed, and a lucky few, such as Lecavalier and Danny Briere (who got an $833,333 buyout check from the Flyers for each of the next four years plus a two-year, $8-million deal from the Canadiens), even got a payment from two teams. Regular-course buyouts, in which the cap hit stays on the books, don't allow for added room.
"I don't have a view on that one way or another," NHL deputy commissioner Bill Daly said in an email. "It's part of the landscape that was negotiated and the teams are dealing with this new, temporary feature of free agency."
Some on the owners' side clearly were looking to punish a few of their colleagues with the tightening of rules on "back-diving" contracts and the new "cap recapture" feature, which means that a player with a front-loaded deal who retires early will generate a sizable cap hit for his team.
That meant some decisions, such as the one the Rangers had to make on Brad Richards, became tougher. The Rangers wrestled with whether to use their second compliance buyout on Richards, just two seasons into a nine-year, $61-million deal. Glen Sather chose to keep Richards, believing that the marquee free agent brought in by the Rangers can rebound next season.
Of course, there's risk. Should Richards be injured during next season's buyout window, he can't be bought out. The Wild's Dany Heatley fell into that category this past week, staying on with Minnesota most likely because he currently is hurt.
So this buyout frenzy will return again next June, 48 hours after the last Stanley Cup Finals game. Some teams may even look to use a compliance buyout on a player who signed Friday; to some high-revenue clubs, it's only money.
The Islanders felt differently. There wasn't much agony in the decision to buy DiPietro out, not with him healthy and no longer a fit in the team's plans. But the $1.5-million payouts through 2028-29 would be notable for a lower-revenue team, and that plays a role for some clubs as well.