Briefly, according to Article 50.7 of the CBA, a player cannot have their salary decrease from year to year by more than half the amount of their first two year’s salaries. In the reported Talbot contract, he has a salary of $2.25 million in the second year, but sees his salary decrease from $2.25 million in the third year to $1 million in the fourth year. That $1.25 million decrease is more than half the amount of the lowest salary during the first two years.
While this is clearly a problem, it is relatively easy to fix. If true, the NHL will void Talbot’s contract and make him a free agent again. At which point, the Flyers can simply offer him another five-year, $9 million contract, but this time have him make $2.5 million each of the first two years, and $2 million the third (rather than $2.5 million the first, $2.25 million each of the next two.) Same cap hit, same length, same dollar amount, same two-year bookend.
It appears as though the NHL has discretion to penalize the Flyers through either fines or loss of draft picks, but for something as minor as this, we will probably never hear about it.
While the error has very little practical effect, if true, this blunder has to be embarrassing for Assistant General Manager Barry Hanrahan, GM Paul Holmgren, and Owner Ed Snider.