Mike Richards' contract was terminated by the Kings. (USATSI)
Mike Richards' contract was terminated by the Kings. (USATSI)

In a shocking turn of events, the Los Angeles Kings did not buy out Mike Richards’ contract after the veteran forward cleared unconditional waivers Monday. They terminated it for “material breach of contract” instead.

The team released a brief statement on the move Monday:

“The Los Angeles Kings today have exercised the team's right to terminate the contract of Mike Richards for a material breach of the requirements of his Standard Player's Contract. We are not prepared to provide any more detail or to discuss the underlying grounds for the contract termination at this time.”

There had been no indication that this was a step the Kings would even be able to take, and it doesn’t sound like we’ll know much more about the details this situation. However, by terminating his contract, Richards would not be owed two-thirds of the remainder of his contract as he would in an ordinary-course buyout as was expected.

The Standard Player Contract, as outlined in the NHL’s CBA allows for the club to terminate the contract if the player shall at any time:

(a) fail, refuse or neglect to obey the Club’s rules governing training and conduct of Players, if such failure, refusal or neglect should constitute a material breach of the SPC.

(b) fail, refuse or neglect to render his services hereunder or in any manner materially breach the SPC.

The contract also states: “In the event of termination under Paragraph 14(a) or (b) the Player shall only be entitled to compensation due to him to the earlier of the date such notice is personally delivered to him or the date such notice is emailed to him.”

Richards had to pass through waivers before the team could terminate his contract. This move also would relieve the Kings of the cap hit they would have incurred had Richards remained with the team or if he was bought out.

UPDATE: According to TSN's Bob McKenzie, the Kings will still be on the hook for a $1.32 million cap hit as part of a cap recapture penalty for the next five years. Even with that in mind, it's still relieves a heavy financial and salary cap burden from the team.

TSN’s Bob McKenzie could not provide great detail, but did share this on the decision from LA.

Richards is represented by Newport Sports, which is one of, if not the biggest player agency in hockey. This issue could be far from over as you’d also have to expect the NHLPA to get involved immediately. Termination of a player's contract, especially when it was so beneficial for the Kings to do so, is not going to be taken lightly.

At the time he was placed on waivers, Richards had five years and $22 million remaining on his 12-year, $69 million deal that he signed while a member of the Philadelphia Flyers. That deal came with a $5.75 million cap hit, which would have severely limited LA's ability to make roster decisions for next season and beyond.

If Richards’ deal remains terminated after the seemingly inevitable legal dispute, this move by the Kings made a huge salary cap and financial headache disappear. This isn’t over yet, though.