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Salary cap crunch around the league


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Remember all that talk we heard about internal caps and salary dumping?

Right now 20 teams are over the $75 million threshold. Buffalo, Boston (Debrusk, Chara), the Islanders (Barzal), the Rangers ($4 million in some weird bonus situation), Panthers (five open roster spots, Weegar), Jackets (Dubois, Gavrikov), all have commitments that will push them up to that level or beyond.

There are seven teams over the cap: Arizona, Vancouver, St. Louis, Toronto, Washington, Vegas and Anaheim. The Jets, Canadiens, Oilers, Flames, and Hawks are all either squeezed so tight against the cap they can barely breath, or will be once they sign their final RFAs. The Canes, Stars, Sharks, Wild and Penguins have a bit of breathing room, but are basically done. The Flyers and Avs are slightly better off. And we all know the issues the Lightning have.

We don’t know how many teams are at or over their internal caps and how that will affect things.

That leaves New Jersey, Detroit, LA, Nashville and Ottawa (if they use it?)  as the only teams with enough cap space to make significant moves.

I don’t think there is enough cap space - let alone internal budget space - left around the league to accommodate both the cost cutting that has to happen and the UFAs still on the market.

There are going to be some hugely lopsided trades and bargain contracts coming. Some teams will have to make very painful moves and some players will be left out in the cold. It’s going to be fascinating to see how the market will reset.

Edited by dudacek
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1 hour ago, LaLaLaFontaine said:

I agree, I expect several rfa to become ufas, because their team do not want to pay the settlement.

Ullmark maybe one of them

The Sabres cannot 'walk away' from the arbitration for Ullmark.  The CBA has a threshold when a team can walk away.   I believe that number is 4,538,958 this year.   I can't see Linus getting this amount.  Maybe his settlement is more than we want, but once we tender that QO we are bound.   They could also choose to make it good for just one year instead of two. 

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23 minutes ago, inkman said:

This should have happened a decade ago.  I’d love to get a look at league revenue vs costs.  Their business model doesn’t make sense.  

This is how ownership wants fans to think. Every owners benefit from owning a team. Franchises continue to increase in value when sold. Even in these troubling times, TV revenue is expected to increase substantially in next deal. Do you really think they would have gotten what they did from Vegas and Seattle if the business model didn’t work?

The Pandemic may have been a financial setback. Or it may have been a way for billionaires to cut some costs, cry poverty and come out laughing at the end.

The preceding was strictly my opinion.

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44 minutes ago, tom webster said:

This is how ownership wants fans to think. Every owners benefit from owning a team. Franchises continue to increase in value when sold. Even in these troubling times, TV revenue is expected to increase substantially in next deal. Do you really think they would have gotten what they did from Vegas and Seattle if the business model didn’t work?

The Pandemic may have been a financial setback. Or it may have been a way for billionaires to cut some costs, cry poverty and come out laughing at the end.

The preceding was strictly my opinion.

Maybe you’re right.  I’d love to see the books.  If the NHL is a successful business model, the NFL is making obscene gobs of cash then. (Not that I didn’t think that already) 

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1 hour ago, tom webster said:

This is how ownership wants fans to think. Every owners benefit from owning a team. Franchises continue to increase in value when sold. Even in these troubling times, TV revenue is expected to increase substantially in next deal. Do you really think they would have gotten what they did from Vegas and Seattle if the business model didn’t work?

The Pandemic may have been a financial setback. Or it may have been a way for billionaires to cut some costs, cry poverty and come out laughing at the end.

The preceding was strictly my opinion.

 

Values may go up but you still have to pay bills. Losing gate revenue hurts NHL teams more than other leagues.

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1 hour ago, tom webster said:

This is how ownership wants fans to think. Every owners benefit from owning a team. Franchises continue to increase in value when sold. Even in these troubling times, TV revenue is expected to increase substantially in next deal. Do you really think they would have gotten what they did from Vegas and Seattle if the business model didn’t work?

The Pandemic may have been a financial setback. Or it may have been a way for billionaires to cut some costs, cry poverty and come out laughing at the end.

The preceding was strictly my opinion.

I certainly agree with you.  Regarding the bolded, it has almost definitely been a financial setback, but probably not so severe as they would like everyone to think.  As you can see, very few teams have actually cut player salary, and the UFA contracts were not drastically reduced.

28 minutes ago, Gatorman0519 said:

It is in this situation that make clear albatross contracts like Okposo really cripple your ability to sign guys.

His contract crippled their ability to sign guys just as much before the pandemic.  They are spending just as much on player salary now as they did last season and the season before.  What’s the difference?

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1 hour ago, inkman said:

This should have happened a decade ago.  I’d love to get a look at league revenue vs costs.  Their business model doesn’t make sense.  

I think most teams generally break even or make money, although some lose quite a bit of money.  However, I think most teams will lose money this year and possibly the following year as well.

 

1 hour ago, tom webster said:

This is how ownership wants fans to think. Every owners benefit from owning a team. Franchises continue to increase in value when sold. Even in these troubling times, TV revenue is expected to increase substantially in next deal. Do you really think they would have gotten what they did from Vegas and Seattle if the business model didn’t work?

The Pandemic may have been a financial setback. Or it may have been a way for billionaires to cut some costs, cry poverty and come out laughing at the end.

The preceding was strictly my opinion.

I think right now there are plenty of teams that, if put on sale in the next year or two, would either not sell at all or would sell only at a big loss.

 

9 minutes ago, PromoTheRobot said:

 

Values may go up but you still have to pay bills. Losing gate revenue hurts NHL teams more than other leagues.

Yes indeedly.  It will be the difference between profit and loss for most teams this year.

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4 hours ago, dudacek said:

Remember all that talk we heard about internal caps and salary dumping?

There are seven teams over the cap: Arizona, Vancouver, St. Louis, Toronto, Washington, Vegas and Anaheim. The Jets, Canadiens, Oilers, Flames, and Hawks are all either squeezed so tight against the cap they can barely breath, or will be once they sign their final RFAs. The Canes, Stars, Sharks, Wild and Penguins have a bit of breathing room, but are basically done. The Flyers and Avs are slightly better off. And we all know the issues the Lightning have.

We don’t know how many teams are at or over their internal caps and how that will affect things.

That leaves New Jersey, Detroit, LA, Nashville and Ottawa (if they use it?)  as the only teams with enough cap space to make significant moves.

I don’t think there is enough cap space - let alone internal budget space - left around the league to accommodate both the cost cutting that has to happen and the UFAs still on the market.

There are going to be some hugely lopsided trades and bargain contracts coming. Some teams will have to make very painful moves and some players will be left out in the cold. It’s going to be fascinating to see how the market will reset.

The Jets will place Little on LTIR as soon as the next season starts and that clears up 5.3m.

Niku, Roslo and Harkins haven't re-signed (RFAs).

Methinks Chevy will make a deal yet that brings back a 2LHD.

There's been lots of rumors that Laine might be traded. If they trade him over putting an aging Wheeler on the 2nd line and Laine on the 1st line, I might start cheering for another team.

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4 hours ago, dudacek said:

Remember all that talk we heard about internal caps and salary dumping?

Right now 20 teams are over the $75 million threshold. Buffalo, Boston (Debrusk, Chara), the Islanders (Barzal), the Rangers ($4 million in some weird bonus situation), Panthers (five open roster spots, Weegar), Jackets (Dubois, Gavrikov), all have commitments that will push them up to that level or beyond.

There are seven teams over the cap: Arizona, Vancouver, St. Louis, Toronto, Washington, Vegas and Anaheim. The Jets, Canadiens, Oilers, Flames, and Hawks are all either squeezed so tight against the cap they can barely breath, or will be once they sign their final RFAs. The Canes, Stars, Sharks, Wild and Penguins have a bit of breathing room, but are basically done. The Flyers and Avs are slightly better off. And we all know the issues the Lightning have.

We don’t know how many teams are at or over their internal caps and how that will affect things.

That leaves New Jersey, Detroit, LA, Nashville and Ottawa (if they use it?)  as the only teams with enough cap space to make significant moves.

I don’t think there is enough cap space - let alone internal budget space - left around the league to accommodate both the cost cutting that has to happen and the UFAs still on the market.

There are going to be some hugely lopsided trades and bargain contracts coming. Some teams will have to make very painful moves and some players will be left out in the cold. It’s going to be fascinating to see how the market will reset.

So what your saying is there is not much of a market for us to more an RHD or for us to take on a goalie salary without moving one of those D?

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25 minutes ago, GASabresIUFAN said:

So what your saying is there is not much of a market for us to more an RHD or for us to take on a goalie salary without moving one of those D?

When it became obvious the Sabres weren't deep in the FA goalie pool, a package of an RHD + going out & a goalie coming back (possibly in separate deals) was clearly the most likely scenario & has been for at least 1 month.  (Or whenever the draft & FA began.  It all blends together in the rearview mirror this most special of all years.)

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Thank you for taking the time to put all this together!  Really good information for figuring out who could make a good trade partner.

Digging into the teams that are over or near the cap:

  • Arizona: With Marian Hossa on LTIR they shouldn't have an issue with the cap.  Ownership is likely looking to move out some money regardless, and they're reportedly shopping a number of vets.
  • Vancouver: Likely will put Micheal Ferland on LTIR to become cap compliant.  Could buy out Sven Baertschi if necessary as well to make space.  They should be fine without significant moves.
  • St. Louis: Likewise, they have Steen ($5.75M) on LTIR so as it stands now they should be fine.  They're in an interesting situation with the cap this year because Tarasenko will likely be on LTIR for a good portion of the season at a $7.5M cap hit, but he should be back before the end of the year.  So they'll have a lot of potential room for a while, but they can't really go out and use it.
  • Toronto: They're around a million dollars over the cap without any easy LTIR solutions.  That's with a 23 man roster.  My guess is that if they don't trade Kerfoot, their plan will be to only keep 21 guys on the active roster and use the cap savings their to bring them under the cap on a day to day basis.
  • Washington: They're around a million over the cap with 21 on the roster.  Michal Kempny ruptured his achilles a couple weeks ago so his $2.5M will go on LTIR for most likely the whole year.  With some smart bargain signings to fill out the roster, they should be alright.  As an aside, it is honestly amazing that this team is right up against the cap with less than $2.5M tied up in goaltenders.
  • Vegas:  Something has to give here.  They're around a million over with 21 players signed, and no potential LTIR targets.  An Alec Martinez trade/buyout seems like the most likely path forward here according to their fans.
  • Anaheim: Kesler LTIR. Next question.
  • Winnipeg:  As Ducky said, putting Little on LTIR should give them the space they need.
  • Montreal: Right up against the cap with a 21 man roster, they might just have to keep it at 21 for the year.

Summary:  Vegas is the only one of these teams that has to make a move, although I have a feeling that Arizona and Toronto will be poking around the trade market to reduce cap.  I didn't mention the Bolts, but they're a given.

Edited by Shootica
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4 hours ago, GASabresIUFAN said:

So what your saying is there is not much of a market for us to more an RHD or for us to take on a goalie salary without moving one of those D?

Most teams are at or close to money in and money out, so it will almost certainly be a straight hockey trade, unless, as Taro says, another party is brought in, like in the Frolik for Scandella deal.

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3 hours ago, Shootica said:

Thank you for taking the time to put all this together!  Really good information for figuring out who could make a good trade partner.

Digging into the teams that are over or near the cap:

  • Arizona: With Marian Hossa on LTIR they shouldn't have an issue with the cap.  Ownership is likely looking to move out some money regardless, and they're reportedly shopping a number of vets.
  • Vancouver: Likely will put Micheal Ferland on LTIR to become cap compliant.  Could buy out Sven Baertschi if necessary as well to make space.  They should be fine without significant moves.
  • St. Louis: Likewise, they have Steen ($5.75M) on LTIR so as it stands now they should be fine.  They're in an interesting situation with the cap this year because Tarasenko will likely be on LTIR for a good portion of the season at a $7.5M cap hit, but he should be back before the end of the year.  So they'll have a lot of potential room for a while, but they can't really go out and use it.
  • Toronto: They're around a million dollars over the cap without any easy LTIR solutions.  That's with a 23 man roster.  My guess is that if they don't trade Kerfoot, their plan will be to only keep 21 guys on the active roster and use the cap savings their to bring them under the cap on a day to day basis.
  • Washington: They're around a million over the cap with 21 on the roster.  Michal Kempny ruptured his achilles a couple weeks ago so his $2.5M will go on LTIR for most likely the whole year.  With some smart bargain signings to fill out the roster, they should be alright.  As an aside, it is honestly amazing that this team is right up against the cap with less than $2.5M tied up in goaltenders.
  • Vegas:  Something has to give here.  They're around a million over with 21 players signed, and no potential LTIR targets.  An Alec Martinez trade/buyout seems like the most likely path forward here according to their fans.
  • Anaheim: Kesler LTIR. Next question.
  • Winnipeg:  As Ducky said, putting Little on LTIR should give them the space they need.
  • Montreal: Right up against the cap with a 21 man roster, they might just have to keep it at 21 for the year.

Summary:  Vegas is the only one of these teams that has to make a move, although I have a feeling that Arizona and Toronto will be poking around the trade market to reduce cap.  I didn't mention the Bolts, but they're a given.

Just so you know, I believe they cannot place a player on LTIR until after the 1st day of the season. Meaning they have to be under the cap at Day 1 and then they can LTIR them. 

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24 minutes ago, thewookie1 said:

Just so you know, I believe they cannot place a player on LTIR until after the 1st day of the season. Meaning they have to be under the cap at Day 1 and then they can LTIR them. 

That's how I always thought it worked, but the league essentially lets teams go over the SC by up to as much as that BF-LTIR'd salary would otherwise put them over the cap right on day 1.  And the amount of cushion the team gains is directly related to how far that salary would put them over when they go on BF-LTIR.  So if a $5MM cap hit player goes on BF-LTIR and it puts the team payroll $5MM over the cap, the rest of the roster can use the entire $81.5MM cap.  

But, if putting that $5MM cap hit player only puts the team $4MM over the cap, the team's effective cap for the rest of the roster is reduced by $1MM and is only $80.5MM.

It can get confusing quickly.

And, not positive, but my guess as to why that's set up that way is at the NHLPA's request, because the players get exactly 50% of HRR (at least in non-COVID effected seasons) and every nominal $ one team goes over the cap is one more nominal $ to get prorated through to the players' 50% which lowers everybody's real take home pay.

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10 hours ago, dudacek said:

Remember all that talk we heard about internal caps and salary dumping?

Right now 20 teams are over the $75 million threshold. Buffalo, Boston (Debrusk, Chara), the Islanders (Barzal), the Rangers ($4 million in some weird bonus situation), Panthers (five open roster spots, Weegar), Jackets (Dubois, Gavrikov), all have commitments that will push them up to that level or beyond.

There are seven teams over the cap: Arizona, Vancouver, St. Louis, Toronto, Washington, Vegas and Anaheim. The Jets, Canadiens, Oilers, Flames, and Hawks are all either squeezed so tight against the cap they can barely breath, or will be once they sign their final RFAs. The Canes, Stars, Sharks, Wild and Penguins have a bit of breathing room, but are basically done. The Flyers and Avs are slightly better off. And we all know the issues the Lightning have.

We don’t know how many teams are at or over their internal caps and how that will affect things.

That leaves New Jersey, Detroit, LA, Nashville and Ottawa (if they use it?)  as the only teams with enough cap space to make significant moves.

I don’t think there is enough cap space - let alone internal budget space - left around the league to accommodate both the cost cutting that has to happen and the UFAs still on the market.

There are going to be some hugely lopsided trades and bargain contracts coming. Some teams will have to make very painful moves and some players will be left out in the cold. It’s going to be fascinating to see how the market will reset.

Great analysis, thanks for putting the work in with this. Broke it down nicely, very concise. 

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I think we'll see a couple more buyouts and a chunk of guys being waived and "sent down" to save that 800k (I think that's the max) on a buried contract. 

 

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2 hours ago, LGR4GM said:

I think we'll see a couple more buyouts and a chunk of guys being waived and "sent down" to save that 800k (I think that's the max) on a buried contract. 

 

Close. It’s $1,075,000.

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1 minute ago, dudacek said:

Close. It’s $1,075,000.

Is that what it is now? Well then I stand by what I said even more. A few more buyouts will come and a couple guys will be waived (un paper only but). 

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