One element that was lost in the frenzy that was Wednesday afternoon was the potential salary cap recapture repercussions for Nashville stemming from yesterday’s Shea Weber for P.K. Subban trade. Despite the fact that Weber is gone, the Predators could still very well be on the hook for a sizable cap hit several years down the road.
The structure of Weber’s contract is now outlawed starting from the 2013 Collective Bargaining Agreement. The overwhelming majority of his salary is paid out in the first five years of his 14 year deal with four years at just $1MM in salary tacked on at the end. That was done, of course, to lower the cap hit.
The CBA instituted a cap recapture penalty as a way of penalizing those who, in their view, openly circumvented the salary cap by adding on years with such a low salary that it couldn’t reasonably be expected that the player would actually play out the full contract. In Weber’s case, he makes $106MM of the salary in the first 10 years of his contract and just a total of $4MM in the final four years combined.
Simply put, the salary cap recapture calculation looks at the sum of the salary paid to the player compared to the cap hit they were charged over the same time period. Any cap savings over that time become eligible for recapture.
In Nashville’s case, they paid $56MM in salary while accruing a total cap charge of $31,428,572. The difference – $24,571,428 – becomes eligible for recapture.
Should Weber retire at any point prior to the conclusion of his contract in 2025-26, the Predators would be subsequently be imposed a cap recapture penalty equivalent to that amount divided by the number of years remaining on the contract. If Weber were to retire with just 1 season left on his deal, they would have to take the entire $24+MM penalty in 2025-26. If he were to retire with, say, four years remaining though, that total would be divided by 4, resulting in a cap recapture penalty of $6,142,857 in each of those years up until the conclusion of 2025-26.
Suffice it to say, GM David Poile is taking on a big potential risk down the road if Weber does indeed decide to retire before his contract expires. Had Weber stayed with the Preds longer, eventually the difference between salary and cap charge would have shrunk, lowering their potential exposure to recapture. But clearly Poile feels the reward is worth it to add Subban to an already dynamic group of defensemen in Nashville.