There is nothing more dangerous in sports than a superstar in his early 30’s coming up for free agency. At age 31 or 32, he still shows all the skills that made him a star in his prime and makes GM’s salivate at the thought of that “one final piece”. But we know those skills are fading. If we are really honest with ourselves, we know the fall will come within the first three or four years of that mega-deal. The Yankees are currently paying for it with Alex Rodriguez, and are considering it with Robinson Cano. The Rangers, of course, took the plunge in July 2011, to the tune of nine years, $60 million for Brad Richards.
Given, the Rangers front loaded the life out of this deal with $33 million being paid in the first three years, with modest $1 million annual salaries in years 7-9. This example of cap gymnastics (now a thing of the past with the new CBA) gives the Rangers a $6.66 million annual cap hit. Not exactly chump change, but not a roster-breaker either.
Now, with Richards current play uneven at best and starting to decline at worst, it begs the question of whether the Rangers should at least consider using their remaining amnesty (compliance) buy-out over the next two summers to clear a potential albatross of the books before it becomes deadweight somewhere around 2016. Now, for the record, I am neither advocating for this strategy or claiming Richards is starting to seriously decline. However, given his recent run of form, I think a preliminary investigation into the matter is worthwhile.
In case anyone missed it, the Rangers used one of their two amnesty buy-outs this summer on Wade Redden. This gives them one more to use either this coming offseason or next. Now, thanks to generally smart contracting practices (or fleecing other GM’s), the Rangers don’t really have anyone else on the books that would be a candidate for this second buy-out, other than Richards.
From my preliminary investigation into the buy-out structure*, it seems that compliance buy-outs are paid at two-thirds of the players remaining salary, paid out over the remaining life of the contract. Key difference between compliance and normal buy-outs is that length of time to pay. In a traditional buy-out, it would be paid over double the life of the contract.
Anyway, that would put the total buy-out figure at $27 ($18 million representing 2/3) million payable at $3 million per season until 2019-2020, assuming it was done after next season. None of which would count against the cap. Since I care much more about cap management than I do about James Dolan’s personal balance sheet, those terms seem reasonable.
The rationale behind the buy-out is pretty obvious. For cap purposes, you essentially get Brad Richards at three years, $33 million, amortized over nine years for salary cap calculation. You get his age 31-33 seasons and none of his decline. Granted you are paying $18 million out of pocket not to deal with that decline, but I digress. Additionally, you won’t have to deal with those last few, guaranteed to be painful years watching Richards limp into retirement. Not to mention, under the new CBA, his salary will count against the cap regardless of whether he retires early if he is not bought out.
The downside is, you’re paying a presumably still productive Richards to go play elsewhere, since you cannot re-sign a player you bought out for a full year afterwards. It also wouldn’t look great to buy him out so soon after signing him. Additionally, it begs the question as to whether the Rangers could replace his production on the ice. Has Derek Stepan taken that step (no pun intended) into the number one center role? Has J.T. Miller slotted in behind him on the depth chart? The free agent pickings in the 2014 offseason at pivot are a little slim after Evgeni Malkin and Patrice Bergeron, who will both more than likely be retained by their current clubs.
It’s obviously way too early to be able to accurately forecast if this will be a realistic option for the Rangers over the next two offseasons, but it is a possibility I will certainly be keeping an eye on since the Rangers will start experiencing a salary crunch right around the same time with their current/future RFA’s. Stay tuned.
*As far as I can tell, the new CBA is not yet available online. The terms above are taken from Article 50 of the outgoing CBA. I haven’t found anything to suggest the structure hasn’t been carried over to the new document.