Larry Brooks gave us the doom and gloom of the day, noting that an amnesty buyout has not been a major part of the CBA negotiations. With the Rangers somewhat up against the cap, a material decision on what to do with Henrik Lundqvist looming and now, a flat cap, the hope was that an amnesty buyout or ability to remove a current buyout from dead cap space would be an option. Neither as of now appears to be the case.
The below is a view from @hockeystatminer at next year's cap figure. He notes who must be protected due to a NMC or is exempted by virtue of being in the second year of their ELC. in addition, he notes who is signed for 2021-22 and 2022-23. The key is next year's salary as well as who is a UFA and RFA after this season.
As seen, there is approximately $12.6 million in cap room. Jesper Fast, as well as Greg McKegg, are UFAs while Ryan Strome, Brendan Lemiuex, Phil Di Giuseppe, Tony DeAngelo and Alexandar Georgiev are all restricted free agents with arbitration rights. If you can figure out how to get all the RFAs back using that cap space and/or bringing back Quickie, can I tell you that you are in the wrong lines of business and should be a capologist.
The hope was that the NHL would implement an amnesty buyout. As we discussed previously, Henrik Lundqvist was the likely candidate for that buyout, as that would free up $8.5 million in cap room, providing space to bring back several of the RFAs and maybe Quickie. One other option, as I have mentioned before and one I favor as well, might have been to wipe out current dead cap space for a previously bought out contract, allowing the team to remove that from the team's current cap as kind of a backdoor amnesty buyout. In the Rangers' case, this would be the $6.08 million on the books for Kevin Shattenkirk. But this too appears unlikely, possibly partially because this rewards only some teams and not all. Irrespective of why, with both options seemingly off the table as of now, the cap will be flat at $81.5 million.
From Larry Brooks and included in my February 18 blog:
A buyout of Lundqvist would save $3 million under the cap next season, as the dead cap space would e $5.5 million, but you have to figure $2 million of that would go to Georgiev, who is a pending restricted free agent with arbitration rights. Under this scenario, the Rangers would be in for $8.45 million for goaltenders (Lundqvist, $5.5 million; Georgiev, $2 million; Shesterkin, $925,000). That would represent a saving of $975,000 on the position as opposed to a Lundqvist ($8.5 million)-Shesterkin partnership.
Trading Hank, who has an $8.5 million cap hit but is only making $5.5 million in salary, which also includes a $1 million signing bonus, is an option, but even with him waiving his NMC and the team eating half the cap hit, $4.25 million, how many teams will be interested especially with a flat cap? Compared to a buyout, that would free up an additional $1.25 million and also avoid dead cap space in 2021-22. That savings could be used to sign a veteran free agent goalie to be exposed in the expansion draft, but the lack of additional cap space may make that unlikely.
From my post-trade deadline blog:
Ryan Strome, ADA and Georgiev all are in line for raises. In addition, Jesper Fast could be brought back if the deal is reasonable, as we have discussed. Dealing Brady Skjei created cap room, which likely will go largely to DeAngelo and partially to Strome, though he might be dealt this offseason. The Rangers will be up against the cap, especially with the Kevin Shattenkirk buyout creating less cap flexibility, but they will have a ton of space the following summer when Shattenkirk, Lundqvist, Brendan Smith and Marc Staal come off the books. GM Jeff Gorton will have to find a way to massage the cap for one more season, but keep in mind that in two years, Igor Shesterkin, Kappo Kakko and Adam Fox all will be RFAs and looking for pay raises.
Buying out Lundqvist would also add $1.5 million in dead space in 2021-22. That year, Shattenkirk's dead cap space drops from $6.08 million to $1.48 million, saving $4.5 or so million. But as of now, New York will need to sign or already have signed the following, boosting the cap room used, Pavel Buchnevich, Filip Chytil, Julien Gauthier, Ryan Lindgren and maybe Igor Shesterkin. In addition, if the team has re-signed Fast or DeAngelo or Strome, all of which are now up in the air, the available cap room plummets even more, making the lack of an amnesty buyout even more damaging.
Other options exist, though none may be that likely, save for possibly dealing Smith. Buying out Staal, who is making $5.75 million, would save $2.133 million this year, leaving $3.566 million on the books this season and $1,066,667 in dead cap money next season. In addition, Staal, who receives a $1 million bonus on July 1, will make just $3.2 million in actual salary, significant below his cap hit. This makes Staal, despite his NMC, attractive to teams looking to get to the floor. For Brendan Smith, the savings would be $1,566 million with $2,783,333 remaining on the books. In 2021-22, the dead cap space would be $783,333. But because of how the contract was structured and the salary for 2020-21 after $1 million is paid on July 1 is just $2.35 million, which is $2 million less than the cap hit, making him, like Staal, a possible trade candidate to a team looking to get to the floor but cash poor and we all know who that is.
One more impact with July 1 hitting. Presuming the NHL calendar stays flat and set dates are not modified, the NMC for both Chris Kreider and Jacob Trouba take effect. I say presuming because chatter existed that some dates on the calendar, since the season has yet to be completed and the draft plus free agency won't take place until that happens, could be moved back.
Brooks piles on a bit, adding in the impact of a flat cap on free agency, including a potential sticking point in the near future of a caste system. In addition, the current agreement, including the escrow, creates a system somewhat restricts player movement to one extent, but more importantly, adversely impacts - from a player perspective - salaries due to the lack of available cap space. Brooks adds in the possible solution of a luxury tax as a way to create a slight uptick in cap space. The NBA and MLB have one, but Gary Bettman has been loath to go in that direction. I can't see that being an option now/
And though a flat cap will benefit guys on long-term deals, players coming up on free agency over the next three seasons constitute a huge majority of the union membership. Indeed, 572 players are currently eligible to hit free agency over the next three offseasons, 335 unrestricted and 144 eligible for arbitration. (I did a count using Capfriendly.com data. If there is a mistake, it is mine and not the website’s.)
Thirteen teams spent to the cap (or beyond, using long-term injury exemptions) for 2019-20, with six more coming within $2 million of the limit. With a flat cap, where are all the free agents going to go?
Or are we simply going to see an acceleration into a caste system where rosters will consist of hockey’s one-percenters, entry-level players and minimum-wage laborers
But what both sides should have done is negotiate an end to the hard-cap system and move to a soft cap. The soft cap would have been $63 million (or whatever the computation) with teams allowed to spend, say, up to $83 million on a one-plus-one luxury tax. Escrow would stop at the soft cap. For every dollar spent above that, the team would contribute a second dollar to revenue sharing.
That would end 50-50, yes, but as I have been saying for almost two decades, percentage of the gross is a bogus concept. Teams neither pool their revenues nor payrolls/expenses. There is no room for 50-50 if it stunts growth, as it will. The NHL will be consigned to stagnation. A luxury tax would serve as a stimulus.
A final deal has not been signed. But if the above is true, the cap will stay at $81.5 million with no amnesty buyout or forgiveness of a current buyout in the cap. New York's already difficult decisions once the offseason starts has just gotten a lot harder and more complicated. The good news? Happy one-year anniversary of the signing of Artemi Panarin.
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