Roberto Luongo goalie retired this week. He is the greatest goalie in Canucks history and is certain to be inducted into the Hockey Hall of Fame. That’s his legacy as a player.
However, his retirement leaves the Canucks in a crunch. The way his contract was structured, his retirement before the end of the deal leaves the team with a salary cap hit of approximately $2.2 million per season as a “recapture penalty.” That penalty will cost the team well into the future.
Luongo’s Career with the Canucks
As he wrote in an open letter to Florida Panthers fans, Luongo’s body told him it was time to retire. When he reviewed his regular season’s play,
Good for him. He’s had a great career. He wore jersey #1 because, “It kind of says it all, doesn’t it?” When he was on his game, Luongo was good enough to back up his swagger with stellar play. His 448 games for the Canucks were second only to Kirk McLean’s. His 252-137-50 record (and 38 shutouts) are the best for any Canucks goalie.
Luongo’s amazing 72 saves in four overtimes against the Dallas Stars during the 2007 Stanley Cup Playoffs is still a record. Notably, Luongo was named the captain of the Canucks and held that position (rare for a goalie) for two seasons from 2008-10. The move showed the team’s respect for his leadership.
During the 2006-2007 season, Luongo won 47 games, with a 2.28 goals-against average, and a .921 save percentage. That season, he earned nominations for the Vezina Trophy, the Hart Memorial Trophy, and the Lester B. Pearson Award. He holds Canucks records for most wins in a season (47), most shutouts (9), and lowest goals-against (2.11).
Luongo ranks third in all-time career NHL wins, trailing only Hall-of-Famers Martin Brodeur and Patrick Roy. He’s certain to be elected to the Hockey Hall of Fame.
Luongo’s Salary Cap Legacy
As powerful as his playing legacy was with the Canucks, Luongo’s retirement is bad financial news because his retirement causes salary-cap problems for the team. Specifically, the structure of his contract is the issue.
In terms of numbers, a look at CapFriendly shows the oddity of Luongo’s contract. It was signed in Sep. 2009, when he was at the height of his career, and was a 12-year deal with a salary cap hit of $5.33 million per season. It was front-loaded so that Luongo would receive most of his money during the first seasons, starting with $10 million in 2010-11 and then would be paid a decreasing amount until 2020-21 when he would receive $1 million.
Obviously, the contract at the time helped the Canucks because they could pay their star almost twice as much as his cap hit and the higher cap hit would come a decade
Luongo’s contract ran well past the time he was likely to still be playing. But the payout at the end of the deal, in real dollars (not salary cap), was so low the team could easily pay the contract. When Luongo retired this week, he was 40 years old but had three seasons remaining on his contract.
A look at Luongo’s contract shows how the last seasons of his contract were to be paid. Regardless of the real dollars paid, the salary cap was averaged over the contract’s term.
|Season||Salary Cap Hit||Real Salary Paid|
These Contracts Made Gary Bettman Angry
To understand the issue Luongo’s contract has on the Canucks, it’s important to understand the Cap Recapture Penalty and why it was instituted.
When the 2005 CBA was in place, a number of general managers, the Canucks Mike Gillis included, had figured out how to “beat” the system. Believing the salary cap would rise every season, they created front-loaded contracts (like Luongo’s) that paid heavily during the first years and then increasingly dwindled as seasons went by.
In 2016, The Province’s Patrick Johnston wrote an article detailing the potential issue with Luongo’s contract. A number of these contracts were signed, including those of Chris Pronger, Mark Savard, and Marian Hossa. However, when Ilya Kovalchuk signed a 17-year, $102 million front-loaded deal with the New Jersey Devils, NHL Commissioner Gary Bettman was angry. (from ‘Canucks facing big Luongo cap recapture penalty,’ The Province – 12/9/16)
Johnston noted, “Teams that did those contracts essentially embarrassed Gary [Bettman]. We found a way to circumvent the CBA legally,” said one executive. “He was incensed, and said, ‘I’m going to get you back.’ Which he did.”
When the current CBA was negotiated, in addition to regulating salary structures, it introduced the Cap Recapture Penalty to deal with front-loaded contracts signed under the previous agreement. The following players’ contracts were determined to be illegal – Kovalchuk, Savard, Pronger, Hossa, Henrik Zetterberg, Mike Richards, and Luongo.
As a result, Luongo’s contract became an albatross. When he was traded to the Panthers at the 2014 NHL Trade Deadline (a trade that brought Jacob Markstrom to Vancouver), the Canucks had to negotiate a complicated “who pays Luongo” agreement and retain part of his salary. To trade him, the Canucks had to also negotiate a split of the Recapture Penalty, as shown by the following chart.
|Year Luongo Retires||Cap Recapture Penalty for Vancouver Canucks||Cap Recapture Penalty for Florida Panthers|
Where Does That Leave the Team?
The only good news is that Luongo’s retirement in 2019 is better than if he retired in 2021. That scenario would have pegged the Canucks with $8
Fortunately, all this will in time be forgotten. When it does, we can remember Luongo for what he was – a stellar Canucks goalie. Until then, Luongo’s contract is still costing the team.