NHL Offseason: What’s the Cap Hit For A Buyout?

June 30th, 2010 by Matthew Rutledge-Taylor Leave a reply »
In this article, I explain how buyouts work and clear up some confusion about the cap hit for buyouts. I'll use the recent buyout of Ottawa Senators forward Jonathan Cheechoo as an example.

The Ottawa Senators bought out the last year of Jonathon Cheechoo's contract this week, as expected. Cheechoo was owed $3.5 million for the coming season.

The buyout will cost the Senators two-thirds of the remaining value of the contract, which is approximately $2.333 million. This amount is spread over two years, meaning that the Senators owe Cheechoo $1.166 million this year and $1.166 million next year. 

For players under the age of 25, the buyout is only one-third of the remaining value of the contact, for example, former Ottawa Senator Ray Emery was bought out by the Senators after only the first year of a three year deal that originally paid him an average of $3.167 million a year from 2007-08 to 2009-10. The Senators are only taking a cap hit of $562,500 this year (and next) as a result of buying out Emery's contract. 

What are the implications in terms of the cost of Cheechoo's buyout against the Senators' salary cap? 
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Read Full Article at Bleacher Report - NHL
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