Is Jeremy Welsh's 2011-12 cap hit a typo?
Short answer, no. Jeremy Welsh's cap hit for 2011-12 is technically $17,945,000, the highest in NHL history. The long answer follows.
When a one-year contract containing bonuses is signed after the season has started, and is effective for the then-current season, the standard cap-hit formula is adjusted to the following:
[ ( base salary * days remaining in season / days in season ) + total signing and performance bonuses ] * days in season / days remaining in season
Examples of this in the past are entry-level contracts for Welsh with Carolina and Jesse Winchester with Ottawa in 2007-08 and Mats Sundin's one-year deal with Vancouver in 2008-09.
JEREMY WELSH
Base: $832,500
Signing bonus: $92,500
Performance bonus: $0
Signed on: April 7, 2012
Days in season: 185
Days remaining: 1
[ ( $832,500 * 1 / 185 ) + $92,500 ] * 185 / 1 = $17,945,000
** NOTE: Welsh's cap hit of $17,945,000 is compliant with Section 50.6 (a) of the CBA — the "20 per cent rule" — because his actual cap charge could not exceed $97,000 based on the date he signed.
JESSE WINCHESTER
Base: $762,500
Signing bonus: $87,500
Performance bonus: $25,000
Signed on: March 24, 2008
Days in season: 187
Days remaining: 13
[ ( $762,500 * 13 / 187 ) + $112,500 ] * 187 / 13 = $2,380,769
MATS SUNDIN
Base: $1,626,500
Signing bonus: $4,000,000
Performance bonus: $0
Signed on: Dec. 19, 2008
Days in season: 186
Days remaining: 113
[ ( $1,626,500 * 113 / 186 ) + $4,000,000 ] * 186 / 113 = $8,210,570
If the player is signing a multi-year contract under the same scenario, nothing changes in the calculation of the player's cap hit. Examples of this are Justin Abdelkader's entry-level deal with Detroit in 2007-08 and Antti Miettinen's deal with Tampa Bay in 2011-12.
— By Chip McCleary and Matthew Wuest