3 things you need to know about the NHL compliance buyout period

Jun 14, 1:16 PM

Now that the Los Angeles Kings have won the Stanley Cup, the National Hockey League's first buyout period for the 2013-14 league year will officially open Monday morning - just after midnight ET according to John Shannon

The buyout period will remain open through the end of business hours (5 p.m. ET) on June 30, and during this time the NHL's 30 member clubs will be entitled to exercise buyouts of the "ordinary course" and "compliance" variety.

What is a buyout? 

Here are the basics: during this roughly two-week window, NHL teams can choose to buy out and terminate any player's standard player contract. It isn't quite as easy as just cutting a player though, because any bought-out player is still due a portion of the money owed to him; either one-third or two-thirds of his remaining salary (depending on the terms of the original deal) to be paid out over twice the remaining years of the terminated contract.

Though a bought-out contract is effectively terminated, the cost of an "ordinary course buyout" still counts against the club's salary cap - albeit for a lesser amount that the original cap hit. That's just generally speaking, and the buyout formula is trickier for some types of contracts, like some signing bonus-heavy deals may be "bulletproof," in effect.

If a player is the target of a buyout - "ordinary course" or "compliance" - he must first be offered up to other clubs on unconditional waivers (also referred to as $125 waivers). The exception to this rule is a player with a no-movement clause, who can decline to be placed on waivers per article 11.8(c).

What is a "Compliance" Buyout?

This is where this year's buyout period gets interesting. By the terms of the 2013 NHL/NHLPA collective bargaining agreement - article 50.9(i)(ii) - NHL teams have the ability to use two buyouts of the "compliance" variety on aggregate during the life of the current CBA.

These "compliance buyouts," described by Canucks assistant general manager Laurence Gilman last summer as "weapons in the arsenal of the collective bargaining agreement," differ from normal "ordinary course" buyouts in that a contract can be terminated without it having any impact, in any league year, on a team's salary cap. 

So a compliance buyout is an enormously useful armament for teams, but it has some major drawbacks: limited range and ammunition. Teams can only use two compliance buyouts, and they expire entirely following the "Ordinary Course Buy-Out period" that follows the 2013-14 NHL season.

In other words, a compliance buyout is a use it or lose it proposition. After June 30, there will be no more "get out of salary-cap jail free" cards.

Which teams can use "Compliance" buyouts?

During the ordinary course buyout window a year ago, 18 players were the target of a compliance-type buyout. Twenty players have been bought out in a compliance manner over the past 18 months.

Four clubs - the Montreal Canadiens, Toronto Maple Leafs, Chicago Blackhawks, and Philadelphia Flyers - have already used both of their compliance buyouts, while 12 teams have already used one. Here's how many compliance buyouts each NHL club has remaining for this buyout window:

Compliance Buyouts remainingTeams
0Canadiens, Maple Leafs, Flyers, Blackhawks
1Oilers, Sabres, Devils, Predators, Avalanche, Red Wings, Wild, Capitals, Canucks, Islanders, Lightning, Rangers
2Ducks, Bruins, Hurricanes, Flames, Blue Jackets, Stars, Kings, Panthers, Coyotes, Sharks, Blues, Senators, Jets, Penguins

Note: the above table is based on information found at TSN.ca.

There will likely be an initial wave of obvious buyouts that will occur immediately. For example, the Buffalo Sabres will probably waste no time buying out forward Ville Leino

But some buyouts could come later on during this window. NHL teams have until after the 2014 NHL Entry Draft to use their compliance buyouts, so depending on which teams add salary in draft day trades, there may be some late surprise additions to the free-agent pool before June 30. 

Related: 5 very likely compliance buyout targets

Feature photo courtesy of USA TODAY Sports/Kirby Lee