Exploiting Loopholes: A Rich Man’s Game

Remember Pegula Day– the day everything changed?

Terry Pegula’s “reason for existence” quote gets thrown around all the time but the one about “financial mandates” is really the money shot.

pegula quote

The beauty of this concept is that the Sabres were immediately elevated to the status of “big market franchise.” Sure, this means keeping your stars, outbidding others for free agents, and hiring any coach/GM/staff combo that you think gives you the best shot at a Cup. But with a salary cap in place, there’s only so much that can be done about the talent level on the ice.

FACT: The advantage of having a deep-pocketed owner pays off only when the limitless supply of money is coupled with creativity.

Gone are the days of bemoaning the Flyers/Rangers/etc. use of loopholes in the CBA to gain a competitive advantage. Welcome to Hockey Heaven, where loopholes are your friend!

Exhibit A from TBN’s John Vogl:

A trade to watch for involves amnesty buyout candidates. Each team can get salary cap relief by buying out two players over the next two summers, and the Sabres may use owner Terry Pegula’s wealth on other teams’ unwanted players for a draft pick or prospect.

“You can acquire a player and buy him out if somebody wants to pay you enough to do that, some other currency other than the dollars,” Regier said. “Whether it happens or not, it’s one of the options.”

An example from Lyle Richardson at Spector’s Hockey:

For example, if the Philadelphia Flyers were to package Daniel Briere (assuming he waived his no-movement clause) with a pick or prospect to the Sabres in return for a cheaper player, a draft pick, a prospect, or any combination of those three, the Sabres would then buy out the remainder of Briere’s contract, either with one of their own amnesty buyouts, or via the regular buyout process of two-thirds the remaining value of the contract spread over twice the remaining term.

Briere would then become an unrestricted free agent, and ineligible from re-signing with the Sabres for a full season following the buyout.

The compliance buyout period begins tomorrow night and lasts through July 5th. It caters to those capable of endless spending and comes with absolutely no consequences. It’s like the NHL created a special holiday just for the richest guys in its club!

If the Sabres aren’t examining the value of stepping into every potential buyout situation and saying “can I write a check to make my team better?“, they’re not living up to the “no financial mandates” promise of Pegula Day.

Have at it.



  1. Been talking DiPietro for awhile now- NYI owner Wang has said he runs his team like a business, so that contract must kill him. What’s $36mm get a franchise these days in return?

  2. Between Buffalo and Penn State Terry Pegula has spent almost a half billion dollars on hockey and its offshoots in the last 5-6 years. How could anyone question his financial commitment to hockey?

  3. I still can’t get out of my head this NYI connection, especially with talk of how Ryan Miller could be a “splash” for Brooklyn. Why does that NYI owner always barely hit cap floor? [He took Tim Thomas to hit cap floor]. It’s because he’s running his team like a business [the opposite of what Pegula says he’s doing — “I’ll just drill another hole of oil”]… then the Sabres HAVE TO ASK THE QUESTION of… “What will you give us if we take DiPietro off your books?”
    Or any other team with one of our buyouts.
    Charles Wang (NYI owner):
    “The team has to be self-sustaining,” he said. “This is not a church that will stay open forever.”
    New York Islanders owner Charles Wang says he regrets buying the money-losing NHL team nine years ago.
    “If I had the chance I wouldn’t do it again,” Wang told Newsday.
    There are 3 ways that NHL teams can get any player in the league, without questions (note: I’m leaving RFAs out of this because the team can just match that offer):
    1. Free Agency
    2. Trading
    3. Drafting
    To get a top-tier player, the Sabres unfortunately have to Trade or Draft them, because when they are free agents, they don’t look twice at Buffalo. So the Sabres are at a 33% disadvantage (along with many other teams in the league).
    But the advantage the Sabres do apparently have is Pegula Bucks. If Pegula’s not running the Sabres as a business and if he’ll do whatever it takes to bring a cup to Buffalo, then the Sabres need to be exploring their financial advantage — exploring deals with teams to take players “off the books” that maybe reside in the AHL (like DiPietro). I’d imagine lesser-financial hit deals exist out there for other players as well (like we took Kotalik).
    The Sabres need to be buying draft picks.
    The Sabres should be throwing common sense out the window.
    There’s $36 million left over 8 years on the DiPietro contract. Is $36M worth a 1st round pick (#15) in 2013-2014 draft? (Maybe that additional pick gets us in the top 3?) Tavarres + DiPietro for Miller?
    Anything should be a possibility.

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