Buyouts

A buyout is a mechanism that allows a team to end a player’s contract early by paying a portion of the remaining value over a period that is twice as long as the remaining term on the original contract, with a specific amount still counting against the salary cap each season.

Buyout Cap Hit Formula

A buyout is calculated using a few key values:

1. Remaining Base Salary. Take the sum of the total remaining base salary the player is owed.
2. Buyout Cost. If the player is 26 or older, the buyout cost is ⅔ of the remaining base salary. If the player is 25 or younger, the buyout cost is ⅓ the remaining base salary.
3. Buyout Length. Double the remaining years in the contract. (i.e. if a player has 3 years remaining, the buyout length is 6 years)
4. Annual Buyout Cost. The buyout cost divided by the buyout length.
5. Projected Buyout Yearly Cap Hit. For each year in the buyout, the buyout cap hit is Buyout Cap Hit = Player AAV – Season Base Salary + Annual Buyout Cost
6. Cap Savings. For each year remaining in the contract, the cap savings is the player’s original cap hit, minus the projected buyout cap hit. For the seasons after the contract would be over, the cap savings is equal to the negative amount of the annual buyout cost.

Buyout Period

Teams can only complete a buyout during a specific window. It opens on the later of June 15 or 48 hours after the Stanley Cup Final ends, and closes on June 30 at 5 p.m. ET.

Teams may also receive a second 48-hour buyout window if a player files for arbitration and the case is either settled or awarded. This secondary window applies only to players who:

1. Have a cap hit greater than $4 million, and
2. Were on the team’s roster at the most recent trade deadline.

Once the buyout occurs, the player immediately becomes an unrestricted free agent and is free to sign with any team.

Signing Bonuses

Players receive all signing bonuses even if they are bought out. Because signing bonuses are guaranteed, they are excluded from buyout calculations and continue to count in full against the team’s salary cap.

As a result, contracts that are heavily structured with signing bonuses, particularly in the later years of the deal, though still technically possible, often make a buyout financially impractical because the buyout cap savings is negligible. This type of back-loaded, signing-bonus-heavy contracts is often referred to as “buyout proof.”

Eligibility

All contracts are eligible to be bought out. Before a buyout can occur, the player must first be placed on waivers, giving other teams the opportunity to claim them. Once the player clears waivers, the team can proceed with the buyout during the designated buyout period.

Players with No-Movement Clauses (NMC) can also be bought out. Because players with an NMC cannot be placed on waivers, they skip that step and are bought out directly.

Players that are signed to a 35+ Contract are eligible to be bought out, however the original cap hit each season remains, and there is no cap relief from buying out a 35+ player.

The only practical protection against a buyout is contract structure. Contracts that are heavily loaded with signing bonuses, especially late in the contract, make buyouts financially inefficient.

Buyout Calculator

Check out PuckPedia's Buyout Calculator, or go to any Player's Page, and click Buy Out under any year of their contract