How Did the Flyers Violate the CBA with Max Talbot’s Contract?
Gord Miller of TSN reported earlier today that he believes the Flyers may have violated the Collective Bargaining Agreement (CBA) with Max Talbot’s contract.
Due to the low cap hit ($1.8M AAV) and knowing that the Flyers have plenty of cap space, I knew immediately that the violation was of the 100 Percent Rule.
What is the 100 Percent Rule? In layman’s terms, it is designed to control the salary structure of a multi-year contract―determining how much a player can make from year to year and how much that number can fluctuate. The CBA reads:
50.7 “100 Percent Rule” for Multi-Year SPCs. The difference between the stated Player Salary and Bonuses in the first two League Years of an SPC cannot exceed the amount of the lower of the two League Years. Thereafter, in all subsequent League Years of the SPC, (i) any increase in Player Salary and Bonuses from one League Year to another may not exceed the amount of the lower of the first two League Years of the SPC (or, if such amounts are the same, that same amount); and (ii) any decrease in Player Salary and Bonuses from one League Year to another may not exceed 50 percent of the Player Salary and Bonuses of the lower of the first two League Years of the SPC (or, if such amounts are the same, 50 percent of that same amount.)
Basically, the 100 Percent Rule says three things. Remember, it all has to do with salary, not AAV/cap hit:
- The difference between Year 1 and Year 2 can’t be more than Year 1 or Year 2, whichever is lower.
- Starting with Year 3, any increase from one Year to another can’t exceed Year 1 or Year 2, whichever is lower.
- Starting with Year 3, any decrease from one Year to another can’t exceed half of Year 1 or Year 2, whichever is lower.
Here’s Talbot’s contract per Gord Miller:
Where is the violation? I’ll show you.
The three years in question are Years 2, 3, and 4. All you need to know for Year 2 is that half of it is $1.125M. For Years 3 and 4, there is a decrease of $1.25M. Since the difference between Year 3 and Year 4 ($1.25M) is greater than half of Year 2 (which is the lower of Year 1 and Year 2) ($1.125M), Max Talbot’s contract effectively violates the 100 Percent Rule.
The solution is easy. Take $250K from Year 3 and throw it onto Year 4. It’ll restructure the contract and make it look like this:
Same term, same total amount, same cap hit, and without the hassle and embarrassment of a violation of the 100 Percent Rule. Wham, bam, thank you, ma’am.