Richards/Kings Settlement

[Stunner_At_Staples_Kings]

Mike Richards and LA Kings near settlement for terminated contract: Report

Saw this on Puck Daddy.

Hope everyone's summer was good, and best wishes to the Kings tonight and this year. I still think our window for a cup is open for 1-2 more years before a retooling is probably needed (As long as our D hangs in there and we can avoid losing every single OT/Shootout).

 

[PuckinUgly57]

We discussed this option when he was terminated, not really surprised. It's an all or nothing move for both LA and Richards if it goes to arbitration; either the Kings will be 100% on/off the hook and same thing for Richards.

Richards has a lot more to lose than the Kings do, his career is in question and he may not be able to earn money again (his career earnings is around $46 million by my estimation. He won't starve, but who knows how much of that is tied up in stuff) so it's in his best interest to settle and make sure he has a yearly income.

Something to watch for will be the cap ramifications, which I have no question the Kings will be on the hook for but with a settlement it should be interesting to see how this is handled cap wise and what precedents if any are set.

 

[davnlaguna]

Here is a thought, and it is probably wrong:
If they increase the cap hit to the Kings that means the money paid to Richhards comes out of the players share. The NHLPA may not push for a cap increase to save their players from being the ones who pay the fine

 

[CaptHowdy00]

If they do settle, is there a cap hit to the Kings?

 

[davnlaguna]

If they do settle, is there a cap hit to the Kings?

There is currently a small cap hit for five years.
I would think that if they settle it means the Kings are going to pay him something outside the cap to drop the case. That means the ruling stands and no additional cap hit and Richards gets paid some money to go away.
Of course they could agree to a buyout within the rules of the CBA in that case the Kings get a cap hit for 10 years that would be lower some of the time and as high as 4 mil+ some of the time.

 

[smackdown380]

According to TSN Hockey Insider Bob McKenzie, the Kings will pay a cap recapture penalty for the next five years. He adds that the team will face an annual cap hit equal to the dollars being paid out annually to Richards, while the cap hit will last as long as the payment schedule.

 

[smackdown380]

I'm not understanding the payment; looks like the Kings get the raw end of the deal

Kings and Richards reach settlement over contract

 

[davnlaguna]

Richards on the books for 15 years
If it is a mil a year that means for 5 years the cap hit is 2.3 (ish) and then 10 years of 1 mil

 

[smackdown380]

Here is a article with quotes from Dean Lombardi and his perspective, really telling stuff in here

Kings GM Dean Lombardi emotionally tells of Mike Richards' 'destructive spiral'

 

[smackdown380]

Richards on the books for 15 years
If it is a mil a year that means for 5 years the cap hit is 2.3 (ish) and then 10 years of 1 mil

i am really confused by this. So Richards gets his full payout but it is spread against the Kings cap till 2031? Why on earth does he get any money if he violated his contract?

 

[davnlaguna]

i am really confused by this. So Richards gets his full payout but it is spread against the Kings cap till 2031? Why on earth does he get any money if he violated his contract?

I don't know the amount. I picked 15 mil because the math was easy. But yeah he gets a bunch of money that is treated like a buyout, but instead of spreading it out over 10 years it gets spread out over 15/16 years. It makes the cap hit lower than a buyout but for a longer time.
Kings did this because an arbitrator could have ruled in Richards favor and the Kings would be stuck with his entire contract and cap hit.
Richards did this because the arbitrator could have ruled in the Kings favor and he would get nothing.

 

[davnlaguna]

Still no numbers but NHL says it was watching this closely from day one

NHL says Los Angeles Kings' settlement with Mike Richards doesn't circumvent CBA

 

[CaptHowdy00]

NHL says Los Angeles Kings' settlement with Mike Richards doesn't circumvent CBA

 

[PuckinUgly57]

Read that over the weekend, nice to see it come from the horse's mouth. Initially the NHL had to approve the termination, which means they were given evidence and reasons to support the termination. The public has not been privy to that, but obviously it was serious enough to where they felt giving the Kings the green light was justified.

Pretty sad story all around regarding Richards, I'm pretty sure his career is over. He was huge to the Kings' first Cup, not as much for the second (he had moments; pinching in with under 10 seconds left to keep the puck in, then throw it to the front where Gaborik was in the Ducks series and he ties it and then the Kings win it in OT for example) but it was obvious his skills were diminishing rapidly.

Addiction is tough, hope he gets his life back first and foremost.

 

[smackdown380]

Read that over the weekend, nice to see it come from the horse's mouth. Initially the NHL had to approve the termination, which means they were given evidence and reasons to support the termination. The public has not been privy to that, but obviously it was serious enough to where they felt giving the Kings the green light was justified.

Pretty sad story all around regarding Richards, I'm pretty sure his career is over. He was huge to the Kings' first Cup, not as much for the second (he had moments; pinching in with under 10 seconds left to keep the puck in, then throw it to the front where Gaborik was in the Ducks series and he ties it and then the Kings win it in OT for example) but it was obvious his skills were diminishing rapidly.

Addiction is tough, hope he gets his life back first and foremost.

This is where my confusion is, there is evidence to suggest Richards is in the wrong and the NHL approved it. So why then would a settlement be needed?

 

[PuckinUgly57]

This is where my confusion is, there is evidence to suggest Richards is in the wrong and the NHL approved it. So why then would a settlement be needed?

Because that is what is set forth in the CBA. Contracts can be terminated at any time, but if this avenue is used there still needs to be some sort of resolution (one is from a financial perspective, one if from a legal perspective) before the matter can be put to bed. Unions are put in place for one reason, to protect their membership - the NHLPA is no different.

While Richards obviously did something severe, he still had an existing contract that needs to accounted for. It's like any other labor and wage dispute in the working world.

Under the CBA, if the team and a player cannot part ways under CBA rules and regulations, they can both take their case to an Arbitrator (i.e., Arbitration for example). The arbitrator then rules for one side or another. Richards had everything to lose, especially if the case against him is serious (which it sounds like it is) and the Kings would be on the hook for all $22 million (no 2/3 buyout available in arbitration) if they lost so it was in everyone's best interest to agree on a settlement and part ways.

Make more sense?

 

[smackdown380]

Because that is what is set forth in the CBA. Contracts can be terminated at any time, but if this avenue is used there still needs to be some sort of resolution (one is from a financial perspective, one if from a legal perspective) before the matter can be put to bed. Unions are put in place for one reason, to protect their membership - the NHLPA is no different.

While Richards obviously did something severe, he still had an existing contract that needs to accounted for. It's like any other labor and wage dispute in the working world.

Under the CBA, if the team and a player cannot part ways under CBA rules and regulations, they can both take their case to an Arbitrator (i.e., Arbitration for example). The arbitrator then rules for one side or another. Richards had everything to lose, especially if the case against him is serious (which it sounds like it is) and the Kings would be on the hook for all $22 million (no 2/3 buyout available in arbitration) if they lost so it was in everyone's best interest to agree on a settlement and part ways.

Make more sense?

It does however, in a way it feels like the Kings had the better hand and folded as a way to spare Richards. They had the proof and the NHL's blessing, why not take it to arbitration. Richards didn't have a leg to stand on. If I was caught at the border with a drug my employer would can me and I would not have the right to any future earnings.

This to me looks like Richards makes out, he is void of his contract but gets paid, the case against him is dropped and the details do not have to emerge and he can now go sign somewhere else, even if at a bargain basement price. His new contract plus the buy out, dude is set.

 

[davnlaguna]

The problem going to arbitration is: you never know how you will do. Even if you think you will win, the arbiter could see it totally different. He might fixate on one detail that you thought was minor or he might bring in something you feel is unrelated
By settling you reduce the damage of losing

 

[PuckinUgly57]

It does however, in a way it feels like the Kings had the better hand and folded as a way to spare Richards. They had the proof and the NHL's blessing, why not take it to arbitration. Richards didn't have a leg to stand on. If I was caught at the border with a drug my employer would can me and I would not have the right to any future earnings.

One word: union. They would not allow Richards to not get SOMETHING out of the deal. For one, it would make their other members lose faith in their ability to look out for their best interests, and second if they did not contest it it sets a dangerous precedent for future cases (although there is specific language in the settlement that does not allow this incident to be used as case law for any future cases like this).

Also as Laguna D said, arbitration is all or nothing for one side or another. Richards had $22 million to lose, the Kings had $22 million in potential cap hit (this would not be a buy out) so unless they proposed the standard 2/3 buyout ($14.67 million) in their arbitration case or some other smaller number they would be on the hook for the whole thing. It would be just like buying him out.

Best thing was settlement, pretty sure we saw this coming while the case was going on but at least this way they got an extra 5 years on the cap hit (Richards'' standard buyout would have been numbers varying between $1-4.5 million, the larger end in the middle years of 3-6) instead of the standard 10. I'm also guessing Richards did not get his full $22 million, my guess is about $10 million.

This to me looks like Richards makes out, he is void of his contract but gets paid, the case against him is dropped and the details do not have to emerge and he can now go sign somewhere else, even if at a bargain basement price. His new contract plus the buy out, dude is set.

His employment situation has been dealt with - he is unemployed and received a severance, if you want to look at it that way. It's like when an employee feels he was discriminated against (or an employer felt he does not owe a former employee any further wages) and it goes to a labor law court to be determined by a judge.

The drug case against him has not been dropped, he still has his legal situation to deal with. He could still be looking at possible jail time. His legal situation and his NHL situation are two entirely different things. With his case pending (Dec 8 I believe?), he will not be employed any time soon. No team wants or needs that shit show in their locker room, regardless of if his skills have diminished or not.

 

[smackdown380]

here is the breakdown, if the Kings had bought Richards out it would be the left side of this picture. The settlement is on the right side.