April 13, 2012; Vancouver, BC, CANADA; Los Angeles Kings forward Dustin Penner (25) has a scoring chance against Vancouver Canucks goaltender Roberto Luongo (1) during the third period in game two of the 2012 Western Conference quarterfinals at Rogers Arena. The Los Angeles Kings won 4-2. Mandatory Credit: Anne-Marie Sorvin-USA TODAY Sports

Leafs' Nonis Won't Rule Out Acquiring Luongo-Type Contract

Dave Nonis (Credit: Charles LeClaire-USA TODAY Sports)

Newly appointed Toronto Maple Leafs general manager Dave Nonis speaking on Thursday said he wouldn’t rule out acquiring a Roberto Luongo-type contract if it helps the team.

Luongo-type contracts refer to contracts in excess of six years signed in the previous collective bargaining agreement that were designed to circumvent the salary cap. These “back-diving contracts” had years with ridiculously low salaries added on at the end designed to lower the overall cap hit.

The cap advantage recapture formula is intended to “punish” the teams that signed these contracts.  The formula was first proposed back in October, but the one adopted in the new collective bargaining agreement won’t be as “punishing.” Instead of charging the full cap hit to the original team when the player retires, teams will be charged the “cap savings” accumulated during the course of the deal.

ESPN and TSN’s Pierre Lebrun explains how the formula works:

The new rule in this tentative agreement is different. Now, for any contract in excess of six years, both teams involved in a trade on a contract like Luongo’s would be penalized if he retired before the end of his deal.

To wit: let’s say the Canucks trade Luongo soon. Luongo has played two years of his 12-year contract, the Canucks paying him $16.716 million in salary but only absorbing a $5.33 million cap hit each year. That’s a cap savings of $6.056 million over two years so far for Vancouver. Under this new rule, should the Canucks trade him now and he retires with three years left on his contract, Vancouver would be charged that $6.056 million in cap savings over the final three years left on his deal from 2019 to 2022. However, let’s say for argument’s sake Luongo gets traded to Toronto, the Maple Leafs also would be subject to cap penalties if Luongo retires before the end of his deal.

To wit, part 2: If Luongo were to play the next seven years of his deal in Toronto before retiring, the Leafs would be paying him $43.666 million in salary but only counting $37.31 million against the cap over those seven years, a cap savings of $6.356 million. So if Luongo retires with three years left on his deal (because his salary falls to $1.618 million in the 10th year and then $1 million in the last two years of the deal), the Leafs would get charged that $6.356 million on their cap spread evenly over the remaining three years of his deal.

Even though the team acquiring the player will penalized as well now, the Maple Leafs are not discouraged.

“If players have them that can help us, then we would have to weigh the penalties and the price to get the player, so there a lot of factors that come into play there,” Nonis told TSN. “But am I saying we would never take one on? The answer is no.”

Nonis didn’t say goaltending is a problem for the team, but he did acknowledge the team needs more pieces.

“There is a lot of pieces there,” Nonis added. “There are more that are required for us to have a long-term winning organization.

“It’s not a finished product by any stretch. We’ve got a job to do to add more pieces to it.”

It sounds like Nonis is certainly open to making a trade for the estranged Canucks goaltender, but he might have some competition. The Philadelphia Flyers are reportedly now interested in the goaltender as well, but Flyers general manager Paul Holmgren shot down those rumours.

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