Due to persistent rumors this summer about the Red Wings potentially bringing Dan Cleary back despite Ken Holland having told him he isn’t going to actually make the roster, I’ve noticed a lot of talk around the internet about the possibility of the Red Wings honoring the (both alleged and potentially illegal) promise from Ken Holland to Dan Cleary to make up for him sacrificing a(n also alleged) three-year deal with the Philadelphia Flyers in order to return to Detroit. I want to clarify this for the Cleary situation and for any other situation that may come up in these regards in in the future.
The NHL is not stupid and the CBA is not toothless. You cannot pay a player $1.5M to do some meaningless desk job, some no-show administrative work, some actual real-world hard working scouting or player development work, or to advertise for the pizza company from which you built your glorious sports empire.
The CBA
The NHL CBA (found here in PDF form) has an entire article dedicated to circumvention. Anything a team or player does that’s intended to cheat any part of the system is considered circumvention. We’ve already written about Article 26, but I want to go over a refresher, because I see a lot of ideas on how to creatively lie and it seems there’s a lot of misunderstanding about what is and isn’t allowed.
The thing about the CBA is that it contains the entirety of the agreement by which the NHL and NHLPA work together to provide hockey to us fans. As fans, we’ll remember the last two lockouts we had. These lockouts centered very heavily on the idea of how much players get paid and how tight the NHL has to account for all of the money they bring in to make sure players get paid the right amount. We’ve lost a season and a half of hockey in the last ten years because two sides with highly-paid lawyers fought over this. Of course paying a guy under or around the table is going to get covered. For that, Article 26 dedicates about three pages to this. Here’s the meat:
(a) No Club or Club Actor, directly or indirectly, may: (i) enter into any agreements, promises, undertakings, representations, commitments, inducements, assurances of intent, or understandings of any kind, whether express, implied, oral or written, including without limitation, any SPC, Qualifying Offer, Offer Sheet or other transaction, or (ii) take or fail to take any action whatsoever, if either (i) or (ii) is intended to or has the effect of defeating or Circumventing the provisions of this Agreement or the intention of the parties as reflected by the provisions of this Agreement, including without limitation, provisions with respect to the financial and other reporting obligations of the Clubs and the League, Team Payroll Range, Player Compensation Cost Redistribution System, the Entry Level System and/or Free Agency.
the very next paragraph says all the same thing except replace “club” with “player.” What this represents is some pretty fantastic catch-all language that covers any way you could think to compensate a player in a way that doesn’t show up on the team’s salary cap.
(e) No Club or Club Actor may provide, directly or indirectly, any Player or Player Actor, with anything of value from a Club or Club Actor other than his Player Salary and Bonuses set forth in, and in accordance with the terms of, his SPC, and his share of Benefits and Government Mandates/Other Programs, as set forth in this Agreement or as otherwise expressly permitted by this Agreement. A Player or Player Actor may not receive, directly or indirectly, anything of value from a Club or Club Actor other than his Player Salary and Bonuses set forth in, and in accordance with the terms of, his SPC, and his share of Benefits and Government Mandates/Other Programs as set forth in this Agreement or as otherwise expressly permitted by this Agreement. Notwithstanding the fact that a Player must disgorge anything of value he may have received in violation of the prior sentence [truncated]
Translation: LITERALLY THE ONLY WAY FOR A CLUB TO PAY A PLAYER IS THROUGH MEANS THAT COUNT AGAINST THE CAP. If you want to give a guy a watch for having a good career, you have to get special permission from the league.
If you’re thinking that this is fine because once [player] retires then all bets are off and you can simply cheat, then think again, and take a trip down to 26.15 – Examples of Circumvention:
(e) A Club and a Player, during the Player’s active career, agree that upon the Player’s retirement, he will receive a sum of money for services to be provided to the Club after retirement.
(f) A Club or Club Actor pays a Player or Player Actor for a “no-show” job, or for a job in which the payment to the Player or Player Actor clearly exceeds the fair market value of the services rendered.
There’s basically no statute of limitations on a player being a player (or on a person who later becomes a player). If the Red Wings want to wait until Dan Cleary turns 80 (in four years) and then try to sneak a payment to him, the league has the authority to open an investigation into a circumvention and punish everybody involved.
What about Sponsorships?
Hey, can’t he get paid $1.5M to sing some stupid Little Caesar’s jingle for a few years and go away otherwise?
The answer is no, this is like saying God can’t see you masturbate if you do it with the lights off. Players may earn money through sponsorships, but they may not receive sponsorships from Club Affiliated Entities (like Little Caesars) and both the amount they earn/the sponsor from whom they earn it have to be disclosed and monitored for things like… oh say a club specifically asking a sponsor to cheat the cap with a cushy sponsorship deal.
How about Paying a Guy to Pay a Guy to Pay a Guy?
Well there’s two answers here. The first comes directly from the CBA again in Article 26.3
(d) No Club or Club Actor or Player or Player Actor may commit any act through a third party where, if such activity were attributed to the Club itself, or to the Player himself, as the case may be, it would constitute a Circumvention. Such activities as are, or are attempted to be, carried out by or through third parties that constitute Circumventions shall be treated as if the Circumvention were committed by the Club itself, or the Player himself, as the case may be.
The second answer is that paying a guy to pay a guy to pay a guy is what’s collectively known outside the hockey world as “money laundering” and it is a federal crime. Going this route would be like shooting a china store owner and burning down his shop because you didn’t want to pay for a plate you broke.
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The bottom line here is that I’m sure if a team were truly committed to violating the CBA and potentially breaking federal laws just to sneak a few bucks to a guy they locked out two times in order to take money away from, they could do it… but make no mistake, it’s not allowed and the NHL is neither clueless nor constrained by legal technicality when it comes to punishing something that would obviously be a breach of their rules. NHL scouts don’t make millions of dollars and you’re not convincing anybody that giving that amount to a former player is just a good faith show in how much you believe in his scouting prowess. The best way to win the “don’t get destroyed by the NHL for cheating the system” game is to not cheat the system.
