Last night’s trade between the Phoenix Coyotes and New York Rangers helped both teams fill on-ice needs, but it was also a rare instance when the NHL’s economic system made sense.
The injury-depleted Rangers needed an offensive-minded forward and the Coyotes needed another veteran defenseman, so the swap of Wojtek Wolski for Michal Rozsival was wise on a practical level.
But it was also a legal manoeuvre around the salary cap by the Coyotes that will help the financially struggling team, currently ranked 29th in attendance.
The Rangers dealt Rozsival, who has a $5 million salary cap, hit for Wolski, who has just a $3.8 million cap hit. On the surface that sounds backwards from how things usually go in the NHL, where the big-market Rangers absorb the higher cap hit while dealing cheaper players to small-market teams like the Coyotes.
But the genius of this trade is that Rozsival actually makes just $4 million this year and $3 million next year while Wolski makes $3.6 million this year and $4 million next year.
In the NHL, a salary cap hit is determined by calculating the average salary earned per year over the course of a contract. So if a player signs a four-year, $20 million deal as Rozsival did with the Rangers, his cap hit is $5 million. However, the player may actually be paid different amounts each year, and in this case Rozsival’s contract was front-loaded.
A good portion of this year’s salaries have already been paid, but the Coyotes will save themselves a full $1 million next year by making the deal even though Rozsival comes with a higher cap hit.
Though the Coyotes have been spending above the $43.4 million salary cap floor, a trade like this would hypothetically allow them to spend only $42.4 million, on players next year while still reaching the cap floor.
That extra million dollars wouldn’t seem like much for the Rangers, but it can mean the difference between turning a profit and losing money for a small-market team like Phoenix.
The Ilya Kovalchuk fiasco this summer shows that we don’t have to look far to see problems with the current collective bargaining agreement in hockey, but this is one instance where the rules of the CBA makes some sense.
Business Insider Emails & Alerts
Site highlights each day to your inbox.