First: For long-term contracts extending beyond the age of 40, the contract's average annual value for the years up to and including 40, are calculated by dividing total value in those years by the number of years up to and including 40. Then for the years covering ages 41 and beyond, the cap charge in each year is equal to the value of the contract in that year.
Secondly, for long-term contracts that include years in which the player is 36, 37, 38, 39 and 40; the amount used for purposes of calculating his average annual value is a minimum of $1 million in each of those years (even if his actual compensation is during those seasons).
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Darren Dreger of TSN reports on the 2 rules the new amendment between the NHL and the NHLPA addresses.
This will only affect future contracts (won't work retroactively), so the Kovalchuk, Luongo, Hossa, and Savard contracts will not be affected.
