The Cap Space Argument

Jonathan Willis
March 02 2010 01:09PM

St. Louis Blues v Edmonton Oilers

I’m a little surprised at the favourable reaction of many Oilers fans to the Denis Grebeshkov trade. While I didn’t think it was a brutally one-sided deal, I do know that I wouldn’t have made it in Steve Tambellini’s shoes. Because the biggest argument in favour of the trade is the cap space issue, I thought I’d spend a little time on that today.

Despite Edmonton’s struggles with the salary cap this season, it’s actually not all that difficult for them to clear cap space, even if they aren’t able to trade Sheldon Souray or Lubomir Visnovsky – either of whom would give the Oilers room (to the tune of $5.4 and $5.6 million, respectively).

Up front, Fernando Pisani and Mike Comrie are replaceable for less than the combined $3.75 million they took up this season (side point: I almost called “this season” “last season,” which I assume is the mentality of most Oilers fans). With two exceptions (Sam Gagner and Gilbert Brule), the Oilers other free agents, both restricted and unrestricted, won’t be due for much in the way of pay increases either.

Let’s assume the very worst: Steve Tambellini can’t move any of the expensive but useful players, and he’s totally incapable of moving four guys making significant dollars: Patrick O’Sullivan, Steve Staios, Robert Nilsson and Ethan Moreau. How would the Oilers clear cap space?

One word: buyouts. The incredibly helpful capgeek.com has a buyout calculator which tells us what it would cost in terms of both dollars and cap hit to buy out these players.

Because of the age of O’Sullivan and Nilsson, it’s easier to buy them out than it is Steve Staios and Ethan Moreau. In fact, by spending a little over $1.5 million, Daryl Katz could nix both of those contracts. Instead of a nearly $5.0 million cap hit between the two of them, the Oilers would now have a total cap hit of around $0.8 million for the next two years, just like that.

Things are less rosy with Moreau and Staios, but given that at their current level of play they can be replaced with dirt cheap players they still deserve some consideration. For a total cash outlay of roughly $2.8 million, the Oilers could buyout those contracts. Instead of a combined $4.7 million cap hit between the two of them, the Oilers would have a $2.0 million cap hit next season, and a $1.4 million hit in 2011-12. Personally, I think a better move would simply be to dispatch Staios to the minors – the cash outlay is a little less ($2.7 million), the cap savings for next season would be the same, and there would be now pesky 2011-12 cap hit to worry about.

So let’s assume that Tambellini has been given the green light (as both Katz and Tambellini have indicated) to spend about $4.0 million, and he follows the course laid out above (buyout Nilsson, O’Sullivan, demote Staios, let Comrie and Pisani walk). That course of action would clear more than $10 million in cap room.

To make a long story short, I don’t think that clearing cap space is a huge issue for the Oilers. In the worst case scenario, the team can clear $10 million with minimal effort, and it goes without saying that with a few deals Tambellini can improve that significantly.

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Jonathan Willis is Managing Editor of the Nation Network. He also currently writes for the Edmonton Journal's Cult of Hockey, Grantland, and Hockey Prospectus. His work has appeared at theScore, ESPN and Puck Daddy. He was previously founder and managing editor of Copper & Blue. Contact him at jonathan (dot) willis (at) live (dot) ca.
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#51 Doogie2K
March 02 2010, 03:00PM
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I don't think resigning Pisani at $1M or under would be a significant detriment to the team, but otherwise, I like this course of action.

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#52 VMR
March 02 2010, 03:02PM
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Ogden Brother Jr. - Team Strudwick for coach wrote:

I said as soon as the Jagr talks came up and other rumors that there was no reason to believe this team was going to rebuild much longer then a year or two.

No,no,no,there's no short cut to rebuilding. They may try and only rebuild this season and bring in a savior like Jagr for next but all that does is bump us up to 10 to 13 and makes the rebuild take longer.

As for Grebeshkov. I'm fully in favor of dumping his salary. The option you point out Willis is buying out salaries which doesnt gain us a second round pick and loses players already on the team while not totally clearing their salaries. Grebeshkov makes too much for how poorly he's played on the back end. I'm willing to give up on him and develop Chorney or Peckham with his ice time and smaller salaries. He might find his game in Nashville and be worth the $3.15 but I doubt he ever would have here.

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#53 VMR
March 02 2010, 03:15PM
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Jonathan Willis wrote:

@ Original Ogden Brother:

No, the worst possible outcome is that we enter next season with the same forwards and same goaltending tandem.

Defence remains the best position on the team, as much as that says more about the team than it does the defence.

I dont think we've been watching the same team if you think defence is a strong point on this team. Time after time these guys are lost in their own end while every team takes advantage of the breakdowns in coverage. We have puck movers but that's only one aspect of a defencemans game. They have to be able to fight for the puck against forechecking forwards and then move the puck smartly without losing it under pressure and if they dont have the puck they have to cover the opposition. All of these things have been weaknesses in Grebeshkov's game this year and I cant imagine building a team that includes both him and Gilbert with the way they've played.

Your a stats guy, go back and look the past few seasons see how many goals we've given up and it's pretty clear to see that defence is not a strength of this team.

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#54 Bucknuck
March 02 2010, 03:22PM
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@VMR

Is there some sort of manual that needs to be followed. Is there some sort of rule book?

Does a team have to absolutely stink in order for it to be a rebuild? Does it violate rule 22 subsection E of the rebuilding rulebook if we make the playoffs next year?

Wouldn't that be awful if they actually tried to plan to win next year. every winning team has had mentors to bring the young people along. This team will need them too.

I agree that trading away the farm for the homerun hit would be a bad idea, but if you had a good offensive horse that could play for the next five years it would go a long way in my opinion.

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#55 Curious
March 02 2010, 03:25PM
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Grebs wont sign for a longer term b/c his agent is the biggest douche representing anyone in the NHL. The Oilers wanted a longer term but they couldnt work it out. Plus the guy is a Russian and that option to play at home and make good money probably is sitting in alot of these guys minds.

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#56 Tracie
March 02 2010, 03:30PM
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The Oilers just aquired Matt Marquardt for Cody Wild...Who's this Matt Marquardt??

Edit: Ok so we trade a dman for a LWer??

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#57 KenL
March 02 2010, 03:56PM
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The Oil's cap problem was not as dire as you pointed out. stauffer had listed the same options as you for clearing cap room during the off season on his show.

That said, I recall many listeners were extremely excited when Katz bought the team a couple of seasons ago, because now we had an owner who could afford and wasn't afraid to spend to the cap. I thought then and been proven right now that this is a stupid idea.

Why would any team want to spend to the cap? It only limits options during the season if the team sucks. Since this season is a write off, cap issues are less of a factor than next season. Still, it's nice to have a larger buffer room to allow for more strategic spending during the off season.

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@KenL

How much of a buffer do you really need? Isn't like 1mil of cap space worth like 3mil right now? I agree that I'd like to have a buffer, but there is really no need to have 5mil of open cap space unless of course you can't afford to pay to the cap.

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#59 OB1 Team Yakopov - F.S.T.N.F
March 02 2010, 03:59PM
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KenL wrote:

The Oil's cap problem was not as dire as you pointed out. stauffer had listed the same options as you for clearing cap room during the off season on his show.

That said, I recall many listeners were extremely excited when Katz bought the team a couple of seasons ago, because now we had an owner who could afford and wasn't afraid to spend to the cap. I thought then and been proven right now that this is a stupid idea.

Why would any team want to spend to the cap? It only limits options during the season if the team sucks. Since this season is a write off, cap issues are less of a factor than next season. Still, it's nice to have a larger buffer room to allow for more strategic spending during the off season.

So basically what you are saying is you would conciously make your team worse in order to have "flexibility" and "options".

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#60 beevbo
March 02 2010, 04:00PM
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Buyouts = Jonathan Willis doesn't have a degree in business.

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#61 crosby31
March 02 2010, 04:07PM
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Hey, Robin or Jason,

I'm out on Vancouver Island and I have been hearing some rumblings that Khabuhlin's injury may be career ending. First off is there any truth to this?? And secondly if this was the case how would his contract work? Would it simply be dropped or would we still be on the hook for some of his salary??

This might be a ridiculous question but I was just curious..

Thanks,

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#63 cableguy - 2nd Tier Fan
March 02 2010, 04:23PM
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crosby31 wrote:

Hey, Robin or Jason,

I'm out on Vancouver Island and I have been hearing some rumblings that Khabuhlin's injury may be career ending. First off is there any truth to this?? And secondly if this was the case how would his contract work? Would it simply be dropped or would we still be on the hook for some of his salary??

This might be a ridiculous question but I was just curious..

Thanks,

if it is career ending he sits on LTIR and the oilers beg him not to retire.

he retires, they are screwed

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#64 Jason Gregor
March 02 2010, 05:10PM
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Jonathan Willis wrote:

@ Jason Gregor:

On the 'decent prospect' angle, as I recall Steve Tambellini got Ryan Stone tossed into the Garon trade.

Add a player like that as a throw-in and this becomes a different deal, more resembling the Cullen trade and closer, IMO, to fair market value.

Ryan Stone has zero goals on the 30th place team. Do you think he will be here next year?

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#65 Jason Gregor
March 02 2010, 05:19PM
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Believe it or not, this article wasn't a shot at you, Jason, and you were far from the only one advocating cap space as the primary reason for the deal - hell, the poll on the right says it and it's getting bounced around message boards and comment sections all over the internet. Thus I wanted to frame the debate - that this deal should be evaluated on it's own merits because cap space won't be that hard for the Oilers to free up, if they want to.

Jonathon, I find it interesting that think my response was a shot. I asked you a question. Are you the only who can question others articles or comments?

You still haven't explained to me why you think keeping Grebeshkov is better than a 2nd. Do you think he is worth his salary moving forward? If this team is going to rebuild, which they are, I don't see how Grebeshkov is a good piece. I don't value him any higher than what they got. Because you see it the other way is fine, and I didn't take it as a shot. I asked you to explain why, rather than just comparing other defensemen.

The fact is those teams can walk away from Sutton, etc...The Predators can, but if they do keep him it will cost them $3.125 compared to Sutton, who will get less on the open market than the current $2.3 cap hit he makes.

We saw it last summer when many veteran UFA guys took big discounts to stay, which is why I think the Islanders got Sutton for a 2nd, because Ottawa could re-sign him for much less than what Nashville will have to pay Grebeshkov. That is part of it.

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#66 Jason Gregor
March 02 2010, 05:22PM
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crosby31 wrote:

Hey, Robin or Jason,

I'm out on Vancouver Island and I have been hearing some rumblings that Khabuhlin's injury may be career ending. First off is there any truth to this?? And secondly if this was the case how would his contract work? Would it simply be dropped or would we still be on the hook for some of his salary??

This might be a ridiculous question but I was just curious..

Thanks,

Haven't heard it is career threatening, although there is some concern how he will recover.

If he is hurt and they keep him on LTIR then they could get some cap relief, but if he actually retires, they are on the hook for his salary. So I don't see that happening.

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#67 beevbo
March 02 2010, 05:23PM
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@Jonathan Willis

Fair enough, I don't doubt there are many teams in the league paying for players who no longer play for them, but I highly doubt any GM considers it a sound strategy.

Obviously moving salary is a better option than paying it out, we both know that. If I understand your argument correctly you would have bought out O'Sullivan, Nilsson, Moreau and Staios before considering a dump of Grebeshkov's salary for a 2nd round pick.

In the context of where we're at in the season, this argument makes very little sense. Moreau is mostly gone, I think that's fair to say, and Staios could very well go as well. If Tamby manages to trade both for picks then they've cleared close to 8 million (assuming I've done my math right) of cap space without costing Katz a dime.

If I'm Katz, that makes me much happier than paying for players who aren't here.

Will Tamby trade his struggling vets without eating some salary? Maybe? Probably not? But at this point in the season it's worth a shot. If he's got to by players out in the summer, then he'll have those savings plus the savings earned from the Grebeshkov trade. To my mind that puts the organization further ahead.

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#68 Bryzarro World
March 02 2010, 05:27PM
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Ya and now we have an extra 3.5 mil+ next year on top of the 10mil you say we can save. He isn't worth that much. Neither is Gilbert at the moment but we are into him long term.

The Oilers have too many players that are of the same type and have to move some of them. Just sounds like you have a little man crush on Grebs. How long would you keep him around at the dollars he is making?

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#69 Bryzarro World
March 02 2010, 05:30PM
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Jonathan Willis wrote:

And because I opened with the Grebeshkov trade I should probably clarify - I wasn't trying to say anything specific about that here, but I was disagreeing with the notion that moving Grebeshkov was needed to gain cap space.

My issue with the trade itself is tactical. The Oilers had five expensive defencemen: Visnovsky, Souray, Gilbert, Grebeshkov and Staios. The only two of those guys likely to be around at the end of a lengthy rebuild are Gilbert and Grebeshkov, so if a lengthy rebuild is the aim I don't understand moving them.

If acquiring maximum return is the aim, both Gilbert and Grebeshkov are struggling through bad seasons, so there value is at an all-time low, i.e. it would make more sense to trade them later.

If instant contention is the aim, then Grebeshkov is worth more than a 2nd round pick.

That means that the only scenario that I see where moving Grebeshkov makes sense is if he's a) a huge problem behind the scenes or b) planning to bolt for the KHL. I've seen nothing to indicate that either of these situations is the case, so going by my current knowledge I don't think the trade makes sense, big picture.

Forgot another scenario... What if he just sucks and never gets any better? You are assuming that he is going to be good enough to keep around for "lenght" of the rebuild.... however long that is.

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#70 Bryzarro World
March 02 2010, 05:34PM
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Jonathan Willis wrote:

@ Menacer:

I'm actually starting to wonder if coaching could be part of the problem. Aside from Visnovsky, every defenceman on the team has been either stagnant or worse than expected.

Souray's been bad, Gilbert's been bad, Grebeshkov's been bad, Smid's been about the same, Staios has been bad, Strudwick's been bad, Chorney's been bad.

It's ugly back there.

You could be right. There has to be a reason that pretty much everyone is sucking at the same time. Either coaching or a taint in the locker room that needs to be dealt with.

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#71 Antony Ta
March 02 2010, 05:51PM
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It is hard for me to comprehend that O'Sullivan would be hard to trade. The guy has to have some value. And Nilsson with his pedigree. Both guys have performed in the past. They might not garner the best return but anything in the form of throwaway draft picks or expiring contracts would be worth it.

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#72 Pajamah
March 02 2010, 05:51PM
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Bryzarro World wrote:

You could be right. There has to be a reason that pretty much everyone is sucking at the same time. Either coaching or a taint in the locker room that needs to be dealt with.

Buchberger to Dallas for Charlie Huddy and a coach to be named later

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#73 Tyler
March 02 2010, 06:04PM
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In the context of where we're at in the season, this argument makes very little sense. Moreau is mostly gone, I think that's fair to say, and Staios could very well go as well. If Tamby manages to trade both for picks then they've cleared close to 8 million (assuming I've done my math right) of cap space without costing Katz a dime.

It takes a business degree to realize that it's preferable to trade guys for nothing than buy them out? I'd think such a proposition is so obvious it doesn't need to be stated.

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#75 Jagrbaum
March 02 2010, 08:39PM
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@OB1 Team Yakopov - F.S.T.N.F

Sup

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#76 TimS
March 02 2010, 08:43PM
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It really comes down to what you think of Grebs, I think he is a soft player on a soft team. At $3mil plus he might be a player you simply choose not to qualify.

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#77 Jason Gregor
March 02 2010, 08:44PM
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@Jonathan Willis

The players for picks trade is only one I'd make when the player forces it or the player is of marginal use to the team (I tend to think draft picks are overvalued). I don't see either of those scenarios here.

Curious how you expect the Oilers to re-build if you think draft picks are over-rated? Drafting is the only way to develop top-end players. Unless you mean most picks outside of the first round are over-rated.

Which has some merit, but would also then back up why the Oilers couldn't get a first-rounder for 37.

Yes, Grebeshkov has value, but they had to choose between him and Gilbert. I don't think this team could progress with both of them.

I think Grebeshkov could play fairly well in Nashville, because Weber and Suter will take all the tough minutes. And if they split them up, then Grebeshkov might play with one of them, and they will make him better.

We'll see how it pans out, but clearly we look at Grebeshkov differently.

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#78 TigerUnderGlass
March 02 2010, 10:07PM
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@Jonathan Willis

Unless my memory is failing me I am fairly certain you have repeatedly mentioned the fact that the one thing Oiler's management is good at is evaluating defensemen.

Is it not well within the range of possibilities that they have simple decided Grebeshkov is not a good enough player to merit the money he will receive and took what they could?

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#79 Max Powers - Team HME Evans
March 02 2010, 11:09PM
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So the oil could end up saving 10m$ in cap hit with your scenarios. What are they going to spend it on? All they're going to do is spend it on other players who can't make a difference. Instead of buying players contracts out and wasting money, the oil may as well spend the money on those players. I never read all the comments so sorry if I'm just re-hashing an already debated subject.

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#80 oilerdiehard
March 03 2010, 05:38AM
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I was sad to see Grebs go. I would have liked to get a little more. I am not devastated either though.

But with that aside. When you mention the increase on RFA re-ups and the like. Do not forget potentially Eberle (hope they start him in the AHL personally, but they will probably put him straight in the show) will get 1st rounder money. Then of course if we manage to nab one of Hall or Seguin. Their cap hit will be 3 million plus, correct?

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Jonathan Willis wrote:

@ beevbo:

I'm not sure why I'm responding, since your claim is both true and faulty logic (while it's true that I don't have a business degree, Garth Snow does and he's used buyouts).

18 of 30 NHL teams currently have buyouts against their cap hit. Another two have lost players on re-entry waivers, meaning that two-thirds of the league is paying players not to play for them.

What do you consider playing for them? I mean we have guys that show up, but they sure as heck aren't playing.

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Jason Gregor wrote:
The players for picks trade is only one I'd make when the player forces it or the player is of marginal use to the team (I tend to think draft picks are overvalued). I don't see either of those scenarios here.

Curious how you expect the Oilers to re-build if you think draft picks are over-rated? Drafting is the only way to develop top-end players. Unless you mean most picks outside of the first round are over-rated.

Which has some merit, but would also then back up why the Oilers couldn't get a first-rounder for 37.

Yes, Grebeshkov has value, but they had to choose between him and Gilbert. I don't think this team could progress with both of them.

I think Grebeshkov could play fairly well in Nashville, because Weber and Suter will take all the tough minutes. And if they split them up, then Grebeshkov might play with one of them, and they will make him better.

We'll see how it pans out, but clearly we look at Grebeshkov differently.

Considering where we sit with our own prospects is it not better to try acquire prospects instead of picks that are going to take 4 years to start showing dividends?

I guess the question is what do you think the Oilers actually intend on doing? 1-2 year rebuild or suck for 4+ year rebuild. If you sugges the 4+ then fine take the picks, but I just don't see this team taking a long-term rebuild.

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#83 VMR
March 03 2010, 08:23AM
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@Bucknuck

There's no manual to rebuilding but there's no way around the fact that this team needs significant change to become a contender. We have to many offensive puck moving dmen and none that are solid defensively and only one who has a real physical edge, that has to change. Our forwards including our best prospects all come from the same mold, small playmakers, not enough shooters or guys with skill and size. Our goaltending is old and injured or young and not particularly promising.

This team faces serious challenges and those who think we'll be back in the hunt next season, I think they're kidding themselves. Unless they manage to bring in some significant talent via free agency, and going that route risks getting stuck with contracts you probably cant move, like Souray and Khabibulin.

Then there's the crazy ideas of bringing guys like Jagr in as a mentor. The guy is not mentor material. He was always getting in trouble with Pittsburgh and Washington and the Rangers over his poor work ethic and refusal to show up for practices. You dont want him around young developing players especially now that he's washed up and getting outscored in the KHL by players like Patrick Thoresen and Marcel Hossa, guys who never managed to stick in the NHL.

Real fans of this team have to expect several years of bad teams, you can hope every year that they manage to turn it around but for that to happen we need several players to suddenly develop into significantly better players then they have been.

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VMR wrote:

There's no manual to rebuilding but there's no way around the fact that this team needs significant change to become a contender. We have to many offensive puck moving dmen and none that are solid defensively and only one who has a real physical edge, that has to change. Our forwards including our best prospects all come from the same mold, small playmakers, not enough shooters or guys with skill and size. Our goaltending is old and injured or young and not particularly promising.

This team faces serious challenges and those who think we'll be back in the hunt next season, I think they're kidding themselves. Unless they manage to bring in some significant talent via free agency, and going that route risks getting stuck with contracts you probably cant move, like Souray and Khabibulin.

Then there's the crazy ideas of bringing guys like Jagr in as a mentor. The guy is not mentor material. He was always getting in trouble with Pittsburgh and Washington and the Rangers over his poor work ethic and refusal to show up for practices. You dont want him around young developing players especially now that he's washed up and getting outscored in the KHL by players like Patrick Thoresen and Marcel Hossa, guys who never managed to stick in the NHL.

Real fans of this team have to expect several years of bad teams, you can hope every year that they manage to turn it around but for that to happen we need several players to suddenly develop into significantly better players then they have been.

Did you see Jagr play in the Olympics he was one of the best players on the ice when the Czech's played.

It's not even about being a mentor as much as it is being support for the offense. Only having one go to player is hurting Hemsky, the other teams matchup against him and then Hemsky doesn't produce. Having Penner and Brule opened up that space for Hemsky, adding Jagre would just open up more.

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#85 VMR
March 03 2010, 09:23AM
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Ogden Brother Jr. - Team Strudwick for coach wrote:

Did you see Jagr play in the Olympics he was one of the best players on the ice when the Czech's played.

It's not even about being a mentor as much as it is being support for the offense. Only having one go to player is hurting Hemsky, the other teams matchup against him and then Hemsky doesn't produce. Having Penner and Brule opened up that space for Hemsky, adding Jagre would just open up more.

Is it worth it if he's costing us goals against every game due to poor defensive play? Jagr had a good Olympics, that's great but so did Patrick Thoresen and Tore Vikingstad, are we looking at bringing them in? Jagr is a name not a talent anymore, if you can get him cheap than it might be worthwhile but if you are paying $2 million or more (and I'm sure it would take more) then there are better options.

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