Why the NHL needs a "Larry Bird Exception" in the next CBA

First, some background: Here is a very simplified rundown of salary caps in the four major North American sports (from the most restrictive to least restrictive, in my view):

  • NHL - Salary cap with guaranteed contracts which cannot be reworked. You can buy out most contracts, but you're still on the hook for 1/3 or 2/3 of the remaining contract.
  • NBA - Salary cap with guaranteed contracts, various exceptions, and a luxury tax. The various exceptions are the key here, but for the sake of my argument the most important one is dubbed the "Larry Bird exception."
  • NFL - Salary cap without guaranteed contracts. Although most people call the NBA salary cap a “soft cap” and the NFL cap a “hard cap”, I feel the NFL salary cap is less restrictive since its contracts can be easily dropped and reworked. That makes it fairly easy to work around the salary cap (see the Redskins).
  • MLB - Luxury tax. If a team goes over a set limit in salary they must pay a tax based on how far they are over the limit.

(I should note that I am not 100% sure about everything above but I’m fairly confident the basics are correct.)

The way I see it, the extremes here are the NHL and MLB. The MLB luxury tax is a joke and I could go on for hours how dumb the MLB system is and about the importance of a salary cap, but that’s not what I’m arguing.

The NFL’s non-guaranteed contracts are bad in a couple of ways. First, it makes signing bonuses a big part of contracts and I’m not a fan of that for various reasons none of which are too important to my point. Second, it allows teams to make bad decisions and pay fairly lightly for them since they can just cut a bad contract and only have to be responsible for the pro-rated signing bonus on their salary cap for the remaining years. So as long as you can learn to manage your dead cap room, you’re good to go!

Now we get to the interesting part: the NBA and their various exceptions. Now, I’m not a huge fan of most of the NBA’s exceptions, but I do like the spirit behind the Larry Bird exception. The exception allows a team to exceed the salary cap to re-sign their own players, provided the player has been with the team for three uninterrupted years. The idea being that a team should not have to lose a player because another team can pay them more under the salary cap. So as long as a player wants to stay with their current team, they should be able to and still makes as much money as they would elsewhere.

When it comes to the NHL, I think they should implement a similar exception. Three or four years in the organization seems to be a good amount of time, although I could be persuaded to go longer. Additionally, the exception should include players drafted by the team and who have been in the teams system since they were drafted (i.e. if they are traded away you have to re-accrue the years if the player is reacquired.)

I like this idea because I think it benefits players, teams and fans: players don’t have to move to get top dollar for their services, teams are rewarded for drafting and using free agency well (as it is now, they're being penalized if they draft TOO well), and teams and fans don’t have to worry about losing their favorite players because they can’t compete with other teams.

One of the problems I see would be the possible abuse of the exception (e.g. agreeing with a player to re-sign them but not actually signing them, using any cap room to sign a free agent, and then using the exception to re-sign the original player). The NHL could hedge this by implementing a luxury tax. And the luxury tax should be hefty... perhaps even more than the dollar for dollar (for every dollar over the luxury cap, a dollar must be paid in tax) computation used in the NBA.

Finally, yes, of course I’m saying this as a Caps fan who doesn’t want to see Alex Semin leave, but it’s not like we’re the only ones affected. Also, since the current CBA ends in 2011, it maybe too late to help the Caps. Besides, who would be against this? Maybe a fan of a team who has had bad drafts and looks to free agency to fix things, but there are just no guarantees that they in turn make good free agent moves? And yes, it would probably make free agency less exciting, since this discourages movement, but really how is this bad?

If this FanPost is written by someone other than one of the blog's editors, the opinions expressed in it do not necessarily reflect those of this blog or SB Nation.

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