Sharks, Evander Kane settle grievance with unprecedented retrospective cap penalty – Daily Faceoff

The San Jose Sharks and Evander Kane officially settled Kane’s pending wrongful termination complaint on Friday, ending the saga more than eight months after the Sharks terminated his contract. Kane has since signed two contracts with the Edmonton Oilers, unaffected by Friday’s payroll terms.

The Sharks’ salary cap this season and beyond will also remain unaffected by the unprecedented settlement.

That’s because San Jose’s penalty will be applied retrospectively to last season’s cap, according to multiple sources, which is believed to have never happened in the 17 years since the NHL switched to a cap system in 2005.

No party directly involved in the negotiations wanted to confirm precise details Daily Faceoffthe settlement is designed to essentially make Kane “whole” the difference between the remaining cash in his contract with the Sharks and the new one he signed with the Oilers.

The Oilers signed Kane to a four-year extension worth $20.5 million on July 12 in the hours before free agency opened. His new contract will see a payment of $16.5 million over the first three years, retaining the term of Kane’s original contract at San Jose, which ran through 2024-25.

San Jose owed Kane $19 million over those three seasons, leaving a $2.5 million difference.

As a result, Kane receives a one-off cash payment from San Jose near that $2.5 million to put him back to health. (One source joked with that number, saying Kane wasn’t “completely” healed, but close to that number.)

Because the Sharks ended last season with just over $4.97 million in salary caps, according to CapFriendly.com, the entire penalty of approximately $2.5 million will be applied retrospectively and San Jose will not have an impact on the have an upper limit if it continues. It’s the best scenario for San Jose; You just write a check and move on.

All of the previous salary cap penalties — most notably Mike Richards’ complaint about his 2015 termination with the Los Angeles Kings — impacted future season salary caps. The Kings carry a penalty for Richards to 2032; This season, the hit is $900,000, which is more than the league minimum salary.

“We are satisfied that the conditions will not adversely affect the team financially or competitively for this or future seasons,” the Sharks said in a statement Friday.

For Kane, who has filed for bankruptcy, the $2.5 million lump sum payment is welcome relief — on top of the $6.125 million he made in calendar year 2022 from the signing bonus alone.

“I played my best hockey in San Jose and gave everything I had on the ice,” Kane said in one statement on Friday. “I really enjoyed playing in front of the Sharks fans and appreciate my loyal fans who have supported me throughout. Adversity can either break you or make you stronger, it certainly made me stronger. I am happy to finally close this chapter of my ice hockey career. Edmonton, let’s go!”

A settlement was always the most likely outcome in this case, as it reduced the risk of an all-or-nothing decision by a neutral referee for both sides. It also eliminated the possibility for the Oilers (and Kane) of having his deal reinstated by the ref, voiding his new deal in Edmonton.

Given the relative ease with which the Sharks have wiped more than $20 million off their books, the question now is whether this result will embolden other NHL teams to make a similar move with a player or contract who has consider them problematic.

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