According to TSN, the NHL  and NHLPA have finally agreed to a change in rules regarding players’ contracts. As part of the agreement, longterm deals that were under investigation by the league (including Marc Savard’s deal) will be grandfathered. The rules, which will be explained below, will apply to all contracts filed after Friday.
The report includes two stipulations. Though the gist of it is well-understood here, rewording it may only confuse some. Here’s an excerpt from Darren Dreger :
“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.
For example, say a 35-year old player agrees to a 7-year deal that is set to expire when the player is 42 years old. The deal is set up as follows: $7.6 million for the first four years followed by $4 million in the fourth year, then two final seasons at $525,000. Under the terms of the new amendment you would add up the first five years of the contract (to the age of 40) and calculate the average: $34.4 million divided by five years equals $6.88 million. That number would now be the player’s cap hit over those first five years. His cap hit in the final two years of his deal would be the actual value of the contract in those seasons, therefore a cap hit of $525,000 for years six and seven of the deal.
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 less during those seasons).
As an example, a player signs the exact same seven-year deal discussed above, however the deal is signed at the age of 32 and is set to expire when the player reaches 39 years old. For that contract, the two seasons at $525,000 would remain, however they would be treated as years at $1 million for the purpose of calculating the appropriate cap charge.”
The second stipulation would have applied to Savard, whose deal runs until he is 39.