Blue Notes

TSN's Bob McKenzie just filed a piece that, if accurate (and I have no reason to believe it isn't), throws some cold water on the idea of the Rangers signing both Jaromir Jagr and Mats Sundin to contracts with extensive performance bonuses. McKenzie writes that because this is the fourth year of the CBA, no performance bonus "cushions" or overage to next season are permitted.

Here's an excerpt with the Sundin/Jagr scenario:

"There are only three categories of players in the NHL who are entitled to receive individual performance bonuses – entry level players, 35 and older players who are on one-year contracts and veteran NHL players who spent more than 100 days on injured reserve last season and are signed to a one-year contract.

Those players may, in addition to their base salary, earn performance bonuses. All performance bonuses count towards the salary cap number, in this case $56.7 million, but in the past three seasons of the new CBA, there was a "cushion" provision that allowed teams to spend to the cap on just salaries and put the bonuses into an "overage" category.

For some teams, the performance bonuses were never earned and they never had to worry about being over the cap. No harm, no foul, so to speak.

For other teams, the performance bonuses were earned but the CBA allowed for an overage of 7.5 per cent of the cap. As long as the excess performance bonuses paid out above and beyond the cap number didn't exceed 7.5 per cent, that overage amount could be deferred and charged against the following year's salary cap.

Long story short, there is no provision allowing for an overage this season because, technically, there is no CBA next year and the NHL didn't want teams having the ability to over-spend and not have a tangible penalty the following season.

What does this mean in practical terms?

Well, suppose a team like the New York Rangers wants to sign a 35 and older free agent such as Jaromir Jagr and/or Mats Sundin. Based on the prior years of this CBA, the Rangers would look at the $56.7 million cap and there would be a potential overage for bonuses of $4.22 million. They could then sign Jagr and/or Sundin to base salaries of $5 million plus performance bonuses of $2 million each. The $7 million total income for each player would count against the cap, but the Rangers would know they could overspend the cap by $4 million (in performance bonuses) and defer those charges to the next year.

Not any more."

Check TSN for the entire column...