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Meltzer's Musings: 6/20/11 |
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One of the most common hockey fan misconceptions about the salary cap is how one-way and two-way contracts work. Unlike many aspects of the salary cap and waiver eligibility rules and exemptions, this is actually quite straightforward to explain.
My apologies in advance to those who are already familiar with the rules. But the subject comes up often enough -- and causes confusion -- that I think it's worthwhile to review for those who are unfamiliar with the workings of pay in contracts.
Whether a player is on a one-way or two-way contracts affects only how much he gets paid if he plays in the AHL. If a player is sent to the AHL -- no matter whether he is on a one-way or two-way deal -- the salary does NOT count against the cap. However, one-way contracts count on the summer salary cap.
In a two-way contract, which is most common with entry-level contracts, a player receives a lower salary (often significantly lower) if he plays in the AHL than if he plays for the big club. On a one-way, the player gets the same money either way.
Example: This year, Johan Backlund's contract becomes a one-way deal that will pay him $800,000 from the Flyers this season regardless of whether he spends the year with the big club (unlikely), clears waivers and gets sent to the Phantoms or even is loaned to a European team. Only in the first instance would his salary have cap ramifications.
Over the summer, teams are allowed to go over the next season's cap by 10 percent, but this figure includes all contracted players on one-ways, including those who are likely to be sent to the minor leagues (either outright or via waivers) and those who are candidates for the long-term injured reserve list (which creates its own set of cap complications).
During the season, a team's salary cap is computed on a daily basis. Any time a team calls up a player, even if he never suits up in a game -- his salary for the day(s) he is up with the club counts against the cap. This has often been a problem for the Flyers, because the team has typically bumped up against the upper limit of the cap and has sometimes been hard-pressed to make callups or carry reserve forwards/defensemen.
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It will be good news if the reported increase in the salary cap ceiling to $64 million (an increase of nearly $5 million) is accurate, and there is every reason to believe that will be the case. Here's what it would mean to the Flyers:
The team is already over the in-season salary cap limit for next year, when you count all players currently on the 50-man NHL contract limit. This includes the contracts of Ian Laperriere, Michael Leighton, Matt Walker and Backlund -- the latter three of which will likely be shed via waivers while Laperriere would go onto LTIR. It does not include the contracts of RFAs Andreas Nodl, Darroll Powe or Dan Carcillo.
For all practical purposes, they would have about $5.03 million in cap space (again including Laperriere, Leighton, Walker and Backlund) as soon as the cap is officially announced if they are stay within the $70.4 million summer limit.
That should be almost enough to sign Ilya Bryzgalov without a single trade being made, although Nodl and Powe would still need to be signed (as would Carcillo if the team intends to keep him). If the ever-popular Kris Versteeg for cap space deal comes down, the Flyers would be able to take on Bryzgalov's contract at a $6 million cap hit, with $1.3 million left to sign other players.
In other words, the Flyers are still going to need to move out some more salary beyond Versteeg's to stay within the summer cap limit, even if they were to squeeze out some extra cap savings by waiving a player such as Jody Shelley. But if there is, in fact, a $64 million cap rather than the initially speculated $62.4 million, they still will have a little more flexibility.
Philadelphia Flyers Blogger •NHL.com • 
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