GM's not happy with Lamoriello's cap moves

[c0nquistad0rian]

Suffice to say, the natives are restless.

The natives, in this case, are NHL general managers who aren't happy with how New Jersey Devils' GM Lou Lamoriello has apparently extricated himself from a salary cap conundrum that, at one point, looked as though it might cause him to gut his team.

Now, though, with two moves over the last few days, Lamoriello looks as though he has deftly gotten cap relief to the tune of $7.1 million. That isn't to say he isn't going to be tight against the cap when the season opens and that all his problems are behind him, but he should at least be able to sign some of the players – Brian Gionta, Paul Martin and David Hale, for example – that he previously couldn't sign because of financial limitations. And it doesn't look as though the Devils will have to engage in a cap-induced fire sale to come in under the $44 million cap figure.

Did we mention a lot of his brethren aren't happy.

''This opens up a real can of worms for the league,'' said one GM, who requested anonymity. ''This is going to get ugly.''



This GM's unhappiness, or outrage if you will, is focused on what will unfold today when the Devils submit their final 23-man roster with the league. It is fully expected forward Alexander Mogilny will be listed as a Long-Term Injury, which if approved by the league will allow the Devils to spend over the $44 million salary cap by the amount of Mogilny's contract ($3.5 million) for as long as he remains on LTI.

Which, no doubt, will be the entire season.

And sources tell TSN that is precisely what will happen – Mogilny will be designated as an LTI and the league will approve it because he's legitimately injured.

In effect, as long as Mogilny remains on LTI, the Devils' salary cap is $47.5 million, which of course includes Mogilny's $3.5 million.

Many in the NHL community are shocked by the way this is unfolding because it was thought that there was no way for a team to get out from under the financial burden of a multi-year contract to a player who is 35 or over.

The new CBA included a clause that basically said any 35 and over player who signs a multi-year contract will count against the team's salary cap even if he retires or plays in the minors. It is why the Tampa Bay Lightning have to account for retired Dave Andreychuk's salary. Ditto for the New York Islanders with retired goalie *** GM Garth Snow and the Toronto Maple Leafs with the retired Tie Domi.

Why would Mogilny be any different?

That's the question a lot of GMs want answered.

There are a number of issues here.

The first is whether a 35 and over player is eligible for LTI status. The CBA clearly spells out that a 35 and over player has to count against the cap even if he's retired, playing in the minors or on injured reserve, but it doesn't specifically say anything about Long-Term Injury status. Conversely, the CBA clause on Long-Term Injury doesn't say anything about precluding 35 and over players from getting LTI.

It is that interpretation that sources say will get the Devils' their relief on Mogilny.

The other GMs who aren't happy about this turn of events will threaten to do the same with their over 35 players who are no longer useful or contributing to the team.

''You're going to see a lot of teams do this with their older players,'' a GM said. ''Why would you have a player retire when you can get him on LTI and his dollars don't count against the cap?''

Good question, but that goes to the second issue of importance. That is, the legitimacy of the injury.

It's all well and good for an NHL team, like the Devils, to say they have a 35 and over player who should be on LTI, but the league isn't going to take any team's word at face value on that.

That's why Mogilny had to receive an ''independent'' medical examination above and beyond any medical diagnosis from the team physicians. Sources tell TSN that ''independent'' medical assessment showed beyond any doubt that Mogilny, who has a chronic and degenerative hip condition, is physically unfit to play in the NHL.

If other teams want to get LTI status for their 35 and over players, and get an allowable overage on the cap, they will have to submit the player to the ''independent'' medical evaluation. If that player is deemed unfit to play, or legitimately long-term injured, then that team will get the same cap relief the Devils are about to receive.

There are some in the NHL community who, all rules and their interpretation aside, feel as though Lamoriello is getting a favorable ruling because he's one of the most powerful and influential executives in the game. He was front and centre in the CBA negotiations. But the league will argue that any team is entitled to do what Lamoriello has done and that the CBA is being upheld.

Which brings us to Lamoriello's other move that ruffled feathers.

On Sunday, Lamoriello traded veteran defenceman Vladimir Malakhov and a first-round pick to the San Jose Sharks in exchange for forward Igor Korolyuk and defenceman Jim Fahey.

This was an ingenious bit of work. Malakhov is no longer playing – he's unofficially retired, though he hasn't filed any retirement papers -- but because he's an over 35 player on a multi-year contract his $3.6 million salary this season has to count against the cap. So Lamoriello simply traded him to a team, the Sharks, that has plenty of salary cap room and can absorb the cap hit without any problem. Sharks' GM Doug Wilson was rewarded for his largesse with a first-round pick from the Devils. As for the players going to New Jersey, Korolyuk is playing in Russia and has no intention at this point of playing in the NHL and Fahey is low-priced depth defenceman.

A first-round pick is a nice return for Fahey. Very nice.

''It doesn't break any rules,'' a rival GM said of the Devils-Shark transaction, ''but it still has a smell to it. It stinks.''

Nevertheless, this one was a no brainer for the league. Unofficially retired players, like Malakhov, or players playing in Europe, like Korolyuk, have had their rights traded in the past. And it's not for the league to decide whether a first-round pick is too heavy a price to pay for a player of Fahey's stature.

It was clear from the get go what this transaction was all about. Lamoriello was paying a price (a first-round pick), a fairly stiff one, to open up cap room. It's not the first time it's been done with the new CBA and it certainly won't be the last one.

Philosophically, it is not much different than the move the Philadelphia Flyers made in the summer of 2005, when they traded Jeremy Roenick and his $5.5 million worth of cap-applicable salary, and an additional third-round pick, to the Los Angeles Kings in exchange for future considerations. The Flyers were effectively giving Roenick away to make room to sign Peter Forsberg to a free-agent contract. In fact, the Flyers had to do more than give Roenick away, they had to throw in a third-round pick to entice the Kings to take the player and his salary. The only difference is that Roenick actually played for L.A. while Malakhov is not ever going to play for San Jose (although if he showed up on the Sharks' doorstep ready to play, they would have to start paying him).

But in each case, the rules of the CBA were followed to the letter of the law.

Teams may not like it, but they could do the same if they so desire.

What we're seeing here is the natural evolution of the new CBA. There are many nooks and crannies to be explored. Over time, sharp GMs, or desperate ones, are going to find loopholes and areas open to interpretation. It's their job to exploit those to their own advantage.

And that, much to the chagrin of others, is precisely what Lamoriello has done.

There is a temptation to laud Lamoriello for these shrewd cap-world maneuverings, to brand him as the genius GM. But if that were the case, he wouldn't have gotten himself in such deep cap trouble in the first place with players such as Malakhov and Mogilny.

But the bottom line is the bottom line and New Jersey's previously-troubled cap situation is improved. Much improved.

For TSN.ca, I'm Bob McKenzie.

http://www.tsn.ca/nhl/news_story/?ID=179719&hubname=nhl

GM's are finding ways to work their cap situations and Lamoriello's one of the first guys to do it. He was presented with some different situations, but I wish that Pierre LaCroix would have been this clever.

What do you guys think?

[Old Swiss2]

I think Lou is awesome. Just because most other GMs act like bumps on a log is no reason for him to.

[purpleapples]

GOOOOOOOOOOOOOOOOO NEW JERSEY!!! why do you think they're called the devils?

[Jerry Klein]

This is the same sort of story that was written when Clarke gave Kesler an offer sheet at twice what he was going to make in Vancouver, and Vancouver had to match it. I think it is more the media creating a controversy than anything else. As both Clarke and Lamoriello responded, in essence, it's within the rules so get off my back.

I like it when people are able to think outside the box. If the other GMs aren't smart enough to do creative things within the rules, that's their problem.

[NastyDragon]

It's pure genius, and instead of bitching about it the other GM's should learn from it and apply it too. It's going to be creative teams that are going to have success in the salary cap era. No harm, no foul.

[leaferguy]

Originally Posted by Old Swiss2

I think Lou is awesome. Just because most other GMs act like bumps on a log is no reason for him to.

Agreed.

The guy's a genius. IMO, he's done a lot more than almost any other GM could do given his position. I hate the Devils (aside from Brodeur), but I think the guy just deserves a lot of credit.

[sloth2946]

Originally Posted by Old Swiss2

I think Lou is awesome. Just because most other GMs act like bumps on a log is no reason for him to.

+1

Again and again he keeps showing why he is the class of the NHL GMs by a long shot.

[JaseTheMace]

pure genius, no other GM in the league would of pulled off what he did for the past two seasons

the thing i love the most is, he showed that he's human signing Malakhov, Mogilny, and McGillis to those outrageous deals, admits his mistake, then turns into the genius that he is by pulling this out of the hat....

but i gotta say, Gionta for 4 mil is kind of questionable....just like his deal with Rafalski

['zilla]

Originally Posted by c0nquistad0rian

http://www.tsn.ca/nhl/news_story/?ID=179719&hubname=nhl

GM's are finding ways to work their cap situations and Lamoriello's one of the first guys to do it. He was presented with some different situations, but I wish that Pierre LaCroix would have been this clever.

What do you guys think?

Lou cements his position as one of the best GMs in the league. Like (GHAAK) Bobby Clarke before him, he's adapting to the new reality. Nice work.

Waitaminute, so if The Rick retires at 35, the Islanders are on the hook for the next five years of his contract? Sweet!

[Jim Bob]

I wouldn't call it pure genius as Lou was an idiot to get into the situation in the first place and he has given away a first round pick to clear some cap space.

However, I do think the other GMs don't have a leg to stand on as Mogilny has a legit injury and the trade with SJ was a trade.

Honestly, I was talking about the Devils giving up picks in deals where other teams took on the bad contracts a while ago. So, I can't say that I have a problem with that.

Now if they want to be ticked off with the Sharks for helping Lou out of his cap mess........................

[c0nquistad0rian]

Originally Posted by Jim Bob

I wouldn't call it pure genius as Lou was an idiot to get into the situation in the first place and he has given away a first round pick to clear some cap space.

However, I do think the other GMs don't have a leg to stand on as Mogilny has a legit injury and the trade with SJ was a trade.

Honestly, I was talking about the Devils giving up picks in deals where other teams took on the bad contracts a while ago. So, I can't say that I have a problem with that.

Now if they want to be ticked off with the Sharks for helping Lou out of his cap mess........................

helping out... The sharks essentially got a first round pick for a depth defenseman. It would be silly not to do that. Thing I'm wondering about is whether or not they actually have to PAY (not whether or not his contract counts against their cap) Malakhov, or does he only start receiving a paycheck if he shows up to play (or files his retirement paperwork)?

[Jim Bob]

Originally Posted by c0nquistad0rian

helping out... The sharks essentially got a first round pick for a depth defenseman. It would be silly not to do that.

I absolutely agree.

I was just saying that IMO, if other GMs are going to be ticked about that deal happening, they should be ticked at SJ for taking Lou's offer as opposed to Lou doing the deal, or the NHL to let it happen after they allowed the Roenick to LA deal last year that allowed Philly to sign Forsberg.

Originally Posted by c0nquistad0rian

Thing I'm wondering about is whether or not they actually have to PAY (not whether or not his contract counts against their cap) Malakhov, or does he only start receiving a paycheck if he shows up to play (or files his retirement paperwork)?

The Sharks likely have to pay Malakhov unless there is some sort of insurance and it was transferred in the deal.

But, since NHL contracts are guaranteed and Malakhov hasn't filed his retirement papers from what I've read, my guess is that he's still pulling a paycheck.

[GloveSave,Right]

Originally Posted by c0nquistad0rian

helping out... The sharks essentially got a first round pick for a depth defenseman. It would be silly not to do that. Thing I'm wondering about is whether or not they actually have to PAY (not whether or not his contract counts against their cap) Malakhov, or does he only start receiving a paycheck if he shows up to play (or files his retirement paperwork)?

Malakhov was suspended by NJ for being a no-show. He is apparently staying in Russia and has no intention of returning to North America. But the Devil's are required to keep cap space available should he return. San Jose will not need to pay him anything, they just need to keep the cap space open for him. Ofcourse, if he should show up at the rink, the Sharks would be obligated to pay him , but I don't see that happening.

According to the CBA:
For Players that are suspended, either by a Club or by the League, the Player Salary and Bonuses that are not paid to such Players shall not count against a Club's Upper Limit or against the Players' Share for the duration of the suspension, but the Club must have Payroll Room for such Player's Player Salary and Bonuses in order for such Player to be able to return to Play for the Club.

[GloveSave,Right]

Originally Posted by Jim Bob

The Sharks likely have to pay Malakhov unless there is some sort of insurance and it was transferred in the deal.

But, since NHL contracts are guaranteed and Malakhov hasn't filed his retirement papers from what I've read, my guess is that he's still pulling a paycheck.

I believe it's a suspension issue and unrelated to retirement. Under the new CBA, even if he retires, he is over 35 and the Devils are obligated to pay out his contract against the salary cap. But because he is suspended, they are only required to leave cap space open for him.

Mogilny does not fall under this category because, although he is over 35 and plans to retire, is still considered a long-term injury case, and is not counted against the cap.

[CKeelty]

I don't see why a retired player should count against the cap to begin with... The idea of the cap is to keep the league competitive, right? So if the guy's not playing, who cares how much he's getting paid?