Could next season be a true testament for the so-called “salary cap hell?”
Over the last couple seasons there has been lots of talk about a handful of teams that could be cap strapped moving forward. This is especially true after the NHL originally told clubs that the cap hit for the 2019-2020 season could be anywhere from $81.5M up to $83M, a minimum of $1.5M increase from the previous season. Many teams were hoping that the cap would be set at the $83M mark so that they could have more wiggle room to create their upcoming rosters, however, as we now know, it only went up to the bare minimum. The past is the past, and many teams that feared the worst were able to creatively maneuver their way out of trouble. The issue now is, what will happen next year if the 2019-2020 season is officially canceled because of the concern around COVID-19, or otherwise known as the coronavirus.
This article is technically a hypothetical, because we do not know if the season will be completely scrapped, or if and when it may resume. There are a lot of uncertainties in the hockey world, and in the end, it is just a sport, it is purely entertainment, it should not come before the health and safety of people including players, fans, staff etc. So, for argument's sake, let’s say the 2019-2020 season is done, it will not return, how will that affect the salary cap for next year? Well, let’s take a look at some of the ramifications.
Many of the smaller market clubs would suffer as they rely heavily on gate revenues for the majority of their income, so if they lost that source of income, they could be in serious trouble. In order to then keep the playing field equal, the NHL may have to keep the cap hit the same, or worst case, bring it back down to the $79.5M hit from the 2018-2019 season (could even be more depending on the severity of loss revenue). It is the latter that intrigues me most because it would completely change the plans of some of the bigger spending clubs around the league, especially since the cap hit for the 2020-2021 season was projected to be anywhere from $84M up to a whopping $88M. Many general managers have to make decisions that will affect their cap structure in the present, as well as the future, keeping in mind the trajectory of how much the cap may increase on a year by year basis. However, if teams were expecting at least a minimum of $1.5M increase, to go backwards could devastate certain teams.
In the Steve Dangle Podcast “Happy Birthday Steve!” released on March 11, 2020, one of the hosts Adam Wylde had an excellent explanation of a similar situation that occurred a few years back. He believes that if the NHL were to shut down for the remainder of the season, the cap would stay the same. On the flip side, Adam does give his belief on what would happen if the NHL decided to roll back the cap, he says, “I would imagine that the league comes out the same way they did last time, and the time before the lockout… 2 compliance buyouts per team. That’s what I think happens. So, if the cap goes down, you have to grant compliance buyouts, you must. You can’t just screw teams like that.” And with that, he is absolutely right, the teams who are closest to the cap ceiling, or even over it for that matter, are the organizations that bring in the most money for the league. Commissioner Gary Bettman could not possibly reduce the cap hit without providing teams with some assistance, especially the ones who make him the most money. Just to be clear a compliance buyout in this situation would mean that each team could buyout 2 players making $3M or more, the player would still get paid the amount due to them, but it would not count against the cap.
With that being said, here are the top 3 teams who are closest to the cap or even over it and how a cap reduction could affect these clubs. The 3 highest spending teams this season are as follows, the Toronto Maple Leafs who are spending $95,178,332, the Arizona Coyotes who are spending $85,089,798, and lastly the Vancouver Canucks who are spending $83,799,550. These three clubs are definitely utilizing their LTIR space, but those are the current cap hits. We need to look at the top three teams who have the most money tied up for next season, how close they would be to that $79.5M cap hit, and who they may consider buying out in order to fit under the cap.
1. Toronto Maple Leafs: To no one’s surprise, the Leafs are the team who have the most money tied up with $76,908,533 heading into next season with 16 roster players signed and no LTIR usage (Andreas Johnsson should be ready to go for the start of next season). Now of course, the Leafs could fill the rest of their roster with cheap contracts through free agency and/or rookies, but they would only have just over $2.5M to work with. Their D-core is already not the strongest and moving forward may have to ice the following pairing, Rielly – Dermott (who needs a new contract), Muzzin – Holl, and Sandin – Liljegren. Not exactly a stellar crop of defencemen there but Sandin and Liljegren may have to reserve that bottom pairing because they are cheap options. Another issue the Leafs will face moving forward is filling out the rest of their forwards, which is deemed their speciality, without their goal speed, skill and scoring ability, they may face an ever tougher season ahead.
Compliance buyout candidates: Honestly, there are no ideal options for the Toronto Maple Leafs. General manager Kyle Dubas got creative last offseason by unloading anchor contracts such as Nikita Zaitsev and unfortunately for many fans, Patrick Marleau. Moving forward, they do not have any more of those awful deals (and yes that means William Nylander is NOT a bad contract, he is in fact one of the best ones). This season you could say that Cody Ceci’s $4.5M is an awfully expensive contract for his skill set, but he is set to hit free agency this offseason, so he would not even be an issue moving forward. I honestly do not know; the Leafs may have to skip out on their get out of free jail cards. If it is a dire situation, do they consider the hometown boy Mitch Marner? I certainly do not think that it is a) a good idea as I believe he is still an elite playmaker, or b) even an option for Dubas and co. but he is making close to $11M… Other than that they may just have to consider middle 6 forward options like Alexander Kerfoot ($3.5M) and Andreas Johnsson ($3.4M), but players like that still hold some trade value considering their age and cost control contracts, so maybe the Leafs look at moving them for assets to clear cap? It will be extremely interesting to see what Dubas does if this in fact becomes a reality.
2. Tampa Bay Lightning: This is another team that probably doesn’t surprise many people considering how good they are, and when you’re good, you probably have some good players, and those good players tend to make some money. Go figure. The Lightning are almost in the exact same position as the Leafs, spending $76,166,666 on 16 roster players with no LTIR usage, that is a lot of spots to fill with not a lot of money. However, general manager Julien BriseBois proved last summer that he can and will move on from solid players. The Lightning were also facing some tough decisions last offseason and that didn’t even include Andrei Vasilevskiy’s new monster contract ready to kick in for the 2020-2021 season. BriseBois was forced to move the pretty recently acquired J.T. Miller and his $5.25M contract to the Vancouver Canucks in exchange for goaltender Marek Mazanec, a 2019 3rd round pick and a conditional 2020 1st round pick, which Tampa would eventually use to acquire Blake Coleman just before the deadline. With that being said, I think there are a few buyout candidates that could help make BriseBois’ life a little easier.
Compliance buyout candidates: This is also a tough one only because the two players I am about to name were having pretty good seasons up until this point. However, they are both probably making more money than they should be for quite a while, they are also 29 and 30. The first one is Tyler Johnson, 29-year-old centre/left winger making $5M until 2023-2024. Johnson has seen a drop off in his game since the 2014-2015 season where he accumulated 72 points in 77 games. Since then, he hit the 50-point mark once while generating only 31 points this season in 65 games. If he continues to trend downwards, that contract is going to just get worse and worse so now would be the time to get out from under it with no penalty if the opportunity arises. The second player I have in mind is 30-year-old left winger Alex Killorn who is on pace for having a career year, surpassing his previous career high in points by 2 in 14 less games (49 points in 68 games). However, he is making $4.45M for the next 3 years, which isn’t awful, but it isn’t great either. This is a player the Lightning may look to hold on to for a variety of reasons, it is only 3 more years at a reasonable cap hit, the fact he is coming off a career year and he does bring a lot of grit and leadership to the team. Another consideration would be Ondrej Palat, but although his cap hit is higher than Killorn, it is for less years and he is 2 years younger. I guess the Lightning would hope that if this becomes a new reality, that the rules would change so that they could buy a player out and then resign them. That could work out for both sides considering that the player will still receive both the money owed to him on his previous contract plus the money from the new contract. However, the current rule says that a player who is bought out cannot resign with that team until the following July 1st to avoid rich teams like this from working around the cap.
3. The Arizona Coyotes: Now this one was actually a surprise to me, I figured it would be someone like the St. Louis Blues (who was not far behind) or the Chicago Blackhawks, but nope third place belongs to the good ol’ Coyotes. My second thought when seeing the figure was that they must have included a bunch of LTIR cap in the total, but I was wrong about that too. Capfriendly has them spending $79,990,000 next season on, you guessed it, 16 roster players. However, I do believe that includes Marian Hossa’s $5,275,000 contract which would then be moved to LTIR once the season began, that would bring Arizona’s new total to a whopping $74,715,000, which is still good for third place. The thing with the Coyotes is they have a very expensive D core and a few middle 6 forwards making a good chunk of change. The thing is though, they have a lot of big contracts coming off the books in 2021, 8 to be exact. Including Marian Hossa, at the start of the 2021-2022 season, they will have $35,962,500 worth of contracts that will expire. Now that could be seen as a good or bad thing depending on how you look at it because there are some key players on that list, but they are up there in age, so the price would surely have to be right for general manager John Chayka to resign some of those guys.
Compliance buyout candidates: This once again puts us in a tough position because some of those contracts aren’t great, but they are all very close to expiring, so is it even worth buying out? The only players who have term on their very expensive deals are Nick Schmaltz (24 years-old) making $5,850,000 until 2026, Christian Dvorak (24 years-old) making $4,450,000 until 2025, Clayton Keller (21 years-old) making $7,150,000 until 2028, Captain Oliver Ekman-Larsson (28 years-old) making $8,250,000 until 2027, and lastly Jakob Chychrun (21 years-old) making $4,600,000 until 2025. That list is composed of their captain and young core moving forward, odds are, none of them will be bought out. A case could be made for Nick Schmaltz, but he is only 24, so he still has time to develop into the player the Chicago Blackhawks thought he would be when they drafted him 20th overall in 2014. Outside of that, if Chayka does decide to just buyout two veteran players in the last year of their deals, look for guys like backup goaltender Antti Raanta making $4.25M (30 years-old ), veteran defenceman Alex Goligoski making $5.475M (34 years-old ) and centre Derek Stepan making $6.5M (29 years-old). Those may be the players who make more sense just to get through the cap reduced season instead of exposing their young core that they are currently building around.
Needless to say, one would think that the teams closest to the cap would have some bad contracts they would like to get rid of. However, that is not necessarily the case here for the top 3 biggest spenders moving into next season. If the NHL then decides to reduce the cap back to $79.5M, will the compensation buyouts really help teams? For some teams it may, but there is a very good chance that those who need the buyouts, are teams who may not even need the cap space at all. An example could be the LA Kings, one of the richer teams in the league and one that is filled with some anchor contracts. They do however have around $20M in cap space next season even if the cap is sent back. It will be very interesting to see what happens moving forward because there could be some serious repercussions for a lot of teams in different ways.
Stats from eliteprospects.com
Contract Research and Cap facts from CapFriendly.com