Originally posted on Rob The Hockey Guy  |  Last updated 6/28/13
Roberto Luongo is a goalie. He gets paid a lot of money. The Canucks haven’t been able to trade him. Why? The answer to this question is far ranging, particularly if you don’t necessarily know the ins and outs of the NHL collective bargaining agreement. Luongo’s situation is a complex one, but lucky for you, I’m here to answer all your questions. Why doesn’t anybody want Luongo?   The lack of interest in acquiring Roberto Luongo has very little to do with his level of play. Luongo has been a great goalie in his career and is still probably in the top 15 goalies in the world. What teams don’t like is the length of his contract and his age. Luongo is 34 years old and is under contract until age 42. At this moment, his cap hit is reasonable at $5.3 million. He gets paid approximately $6.7 million each year until he is 38 years old, $3.3 million at age 39, $1.6 million at age 40 and $1 million at age 41 and 42. What did the new CBA do to trading Luongo? The new CBA ruined Roberto Luongo’s trade value. Under the old CBA, Luongo’s cap hit could be buried if sent to the minors or be completely gone if he retired before the end of his contract. The prevailing wisdom was that once he was no longer good enough to be a starting goalie in the NHL, he would either retire or be sent to the AHL (which would probably cause him to retire). If we were still operating under the old CBA, Toronto could have traded for him with zero risk cap-wise, but with some risk in real dollars. The new CBA presents a lot more risk for a team acquiring Roberto Luongo. For starters, you can no longer bury contracts in the minors. If you send a player to the AHL, most of their cap hit still counts against the cap. So the risk for teams is that if Luongo’s play drops off drastically and he still wants to continue playing (as a backup or in the AHL), he will still count against the cap. The worst part about the new CBA for the Canucks is the “cap recapture penalty“. The cap recapture penalty is defined by capgeek.com as: Per the CBA reached in January 2013, teams receiving a “cap advantage” from long-term contracts (defined as seven years or more) will be penalized in the event the player retires or “defects” from the NHL before the contract expires. A team receives a “cap advantage” when the player’s actual salary exceeds his cap hit in a given year. So lets say the Canucks trade Roberto Luongo to the Islanders this offseason and Luongo ends up retiring at age 39 (ie. the last year of his contract in which he earns $6.7 million). If he does that, both the Islanders and Canucks will be issued a penalty (because they have been paying Luongo around $6.7 million but only having $5.3 million count against the cap). The Canucks under this hypothetical scenario would be penalized a $1.9 million cap hit for 4 seasons while the Islanders would be penalized a $1.7 million cap hit for 4 seasons. Why not keep Luongo and trade Schneider? There is a reason why Roberto Luongo’s contract is not desirable by the other 29 teams in the NHL: because it’s a bad contract. Even though Luongo is a good goalie, his contract is a disaster under the new CBA. If the Canucks were to keep Luongo and he retires at age 39 (ie. the last year in which he will be making $6.7 million), the Canucks would be issued a salary cap penalty of $3.6 million for 4 seasons. But apart from that, Cory Schneider is better and younger than Luongo. Schneider’s numbers have been better than Luongo’s in each of the last two seasons. Schneider, at age 27, projects to be good for many more years while Luongo’s play could drop off drastically in the next 2-3 seasons. Sure, you could get something for Schneider, but what? Just because Schneider is a good goalie does not mean that you will get exactly what you want for him. The LA Kings found that out recently when they received a low return (in my opinion) for Jonathan Bernier. Gone are the days when you could trade a mediocre young goalie like Semyon Varlamov in exchange for a high 1st and 2nd round draft pick. Lecavalier got bought out, that means Luongo will too right? Not exactly. Lecavalier’s contract was worse than Luongo’s is. Luongo’s cap hit is $5.3 million while being paid $6.7 million for a majority of the contract. Lecavalier’s contract had him being paid $10 million for a majority of the time while being a cap hit of $7.7 million. Luongo’s contract took him to age 42 and Lecavalier’s until age 39. Both deals are terrible, but I would suggest that Lecavalier’s is a little bit worse. Mike Gillis was an idiot for signing this contract, wasn’t he? In hindsight, yes he was. But at the time, under the governing rules, it was a decent contract. If Gillis would have signed Luongo to a 5 year deal instead of a 12 year deal, he would have probably commanded a cap hit over $7 million. People seem to forget that the entire city of Vancouver was paranoid that Luongo would leave as a free agent at the time. He was their best player. By signing Luongo to the 12 year deal, it allowed the Canucks to have increased cap space in a time in which they were challenging for the Stanley Cup. In 2011, the Canucks may not have been able to acquire Max Lapierre or Chris Higgins at the trade deadline (both of whom were important players in their cup run). Mike Gillis was an idiot for not trading him earlier, wasn’t he? Yes and no. Depending on who you believe (I believe Jason Botchford), Luongo was not prepared to waive his no trade clause to just any team last summer. That included not wanting to waive it to be traded to the Toronto Maple Leafs at the 2012 draft. Still, Gillis should have done the best he could last summer and traded him. By holding onto Luongo’s contract through the lockout, he risked having a new cap circumvention penalty be implemented. Gillis gambled that a team would become more desperate for Luongo and he lost. The Leafs had a good season with Riemer, the Caps did just fine with Holtby, etc. So then, what are they going to do with him? The Canucks have 3 options at this moment: trade him (for something of very low value), waive him or buy him out. I still think it makes sense for a low cap team that has trouble acquiring good free agents to acquire Luongo (either for say a 3rd round pick or on waivers). If you are a team that doesn’t spend to the cap ceiling anyway, then a cap penalty shouldn’t be of much concern. I think Florida, NY Islanders, Calgary, Colorado, Edmonton and Philadelphia make the most sense. If they can’t trade him before the compliance buyout window closes, they will have to buy him out.
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