Compliance buyout

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Compliance buyouts (sometimes referred to as amnesty buyouts) allow National Hockey League teams to buy-out a player's contract by paying him two-thirds of the remaining value of a contract over twice the remaining length of the contract. If the player is under 26 years old, then the team may pay the player just one-third of the remaining contract value.[1] In ordinary-course buyouts the team's NHL salary cap hit for the player is stretched over a period of twice the remaining length of the contract. Compliance buyouts follow the same formula as ordinary-course buyouts but do not count against the cap.

Following the 2012–13 NHL lockout each team was granted two compliance buyouts to be exercised after the 2012–13 season and/or after the 2013–14 season that would not count against the salary cap in any further year, regardless of the player's age. After using an compliance buyout on a player, that player is prohibited from rejoining the team that bought him out for one year; the NHL deemed that the re-signing of a player following a trade and a subsequent compliance buyout would be ruled as cap circumvention.[2]

Following the 2012–13 NHL lockout each team was granted one accelerated compliance buyout on a player with a salary cap hit of $3 million U.S. or more before the regular season began. If an accelerated compliance buyout is used, that team will only have one more compliance buyout left, and they must use it after the completion of the 2012-13 season (and before the start of 2013-14 season). The player's cap hit is applied in full to the team's salary cap for the 2012-13 season, but for no season after, regardless of contract length.

Available during the off-season in 2013 and 2014, amnesty buyouts begin 48 hours after the conclusion of the Stanley Cup Finals. In 2013, it began 48 hours after the conclusion of the Stanley Cup, and ended on July 4, 2013.

References

  1. ↑ NHL's compliance buyouts are similar to NBA's amnesty concept
  2. ↑ Larry Brooks: NHL deems re-signing players following a trade and subsequent amnesty buyout as circumvention of collective bargaining agreement - NYPOST.com
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