A series of tweets by PuckPedia over the weekend has sparked a massive discussion in the NHL community about a potential contract situation involving Edmonton Oilers defenceman Duncan Keith. If the veteran defenceman were to retire this offseason, a nonzero possibility considering he’s about to turn 39 years old, it would trigger a confusing salary cap situation with the NHL’s recapture penalty.
The short explanation of what would happen if Keith were to retire is as follows. The Blackhawks would be forced to pay a $7.5 million salary cap recapture penalty that would be spread over two years. On the other hand, the Oilers would get Keith’s $5.5 million salary off the books and receive a negative $3.4 million cap recapture bonus, meaning that it would lower the team’s total cap hit.
Canucks fans will be familiar with cap recapture penalties because the team has been forced to pay one after former goalie Roberto Luongo retired while on the contract that the Canucks signed him to, which was perfectly legal at the time it was signed.
This upcoming season will be the first that the Canucks’ salary cap is not going to be affected by Luongo since he retired.
If this situation does unfold this offseason — something that we will likely know sooner or later as Keith has reportedly been given a deadline by the Oilers to make a decision on retirement — it would create a messy situation for the NHL who would then have to decide if they would honour the way that the rule is written.
Canucks fans would surely be up in arms if the rules weren’t enforced in this situation, but that seems to be a legitimate possibility due to the weird consequences of a Keith retirement. Let’s take a closer look at the full scope of the situation.

How would the recapture penalty work? 

Cap recapture penalties were introduced by the NHL to prevent backloaded contracts that resulted in a low cap hit compared to the value of the contract. Both the contracts signed by Roberto Luongo and Ilya Kovalchuck are great examples of the type of contract that the NHL wanted to prevent.
The actual recapture amount is determined by comparing how much money was paid against the total cap hit of the player during his playing days. This Roberto Luongo example shows how the Canucks ended up owing a little over $3 million per year for three seasons.
In the case of Duncan Keith, the Oilers only paid him $2.1 million but suffered through a cap hit of $5.5 million. This would theoretically make them eligible for the negative $3.4 million penalty, in other words, a credit to add $3.4 million in cap space.
The Blackhawks would be in the same situation that the Canucks were with Luongo. They would be forced to suffer through a penalty of $5.5 million next season and $2 million the season after that.
With cap space as valuable an asset as it is in the NHL, Keith retiring might be a good thing for the Oilers. It would give them money to build upon a roster that just reached the Western Conference finals. While Keith isn’t a terrible defender, the Oilers might be hoping that he decides golfing in Florida year-round sounds nicer than the brutal grind of another NHL season.

Would the NHL enforce this? 

Keith is only owed $1.5 million in real salary next season which means that he might be more inclined to hang the skates up. If he does decide to do that, he’ll be very aware of the fact that he’s screwing over the Blackhawks, the same organization that he spent the majority of his career with and still has a good relationship with.
However, let’s say he does decide to do this. According to multiple sources around the league, including Bob Stauffer, the NHL does not want to hand out any cap recapture or benefits. This would mean that the league would likely try to arrive at a solution where the Oilers would not be allowed to exceed the salary cap by $3.4 million.
Negotiations would ensue between the teams and the NHL. If the Oilers weren’t allowed the $3.4 million cap recapture credit, it raises questions about the Blackhawks’ penalty. The Canucks were told that the rules are the rules when they appealed the Luongo contract but it seems as if the NHL might not hold that same stance in this situation.
In what has become a much too often occurrence, the Canucks might end up being on the losing side of some NHL hypocrisy when it comes to salary cap recapture penalties.

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