The Edmonton Oilers and the Salary Cap

lowe

If the Oilers make a big roster move in the coming days or weeks, it will involve a trade. The simple fact of the matter is that the Oilers don’t have the cap space to acquire a marquee player without sending at least one big ticket out.

Thanks to the decision to employ the 5% inflator built into the CBA, the salary cap will not drop next year, but rather rise to 56.8 million. That represents a 100,000$ increase from this season. Next season, the outlook is bleaker; the cap figure is as of yet unknown but it is certain to decline, perhaps steeply.

For the Edmonton Oilers, this represents two problems. The first is that with multiple restricted free agents (Denis Grebeshkov, Ladislav Smid, Liam Reddox, Gilbert Brule) left to sign, no starting goaltender, and a desire to add a top line player, Steve Tambellini has only 10-million dollars or so to work with (source: nhlscap.com). This is, however, a small problem compared to what Tambellini will need to deal with next summer.

With the cap in decline, Tambellini will see several players reach restricted free agency – with the critical two being Sam Gagner and Andrew Cogliano. Should those two players progress over the next year, they will certainly command large raises and both could be targets for an offer sheet. Only Fernando Pisani’s 2.5 million dollar contract comes off the books in that time. In other words, if Tambellini spends to the cap this summer, he is going to have no room to sign Ganger and Cogliano.

What is the solution? Despite suggestions from fans, I can’t see Daryl Katz spending millions to send a player like Dustin Penner to the minors. Ditto for Shawn Horcoff, the sole veteran centre on the team and a vital player, regardless of whether he’s worth his 5.5MM annual cap hit or not. Fernando Pisani isn’t the problem either; his contract comes off the books after this season, at which point he can be re-signed for less money or allowed to depart. Let’s take a look at the Oilers roster, ranked by position and annual cap hit, and see if there isn’t a solution to the problem. I’ve bolded players of interest.

Forwards

  • Shawn Horcoff – 5.5MM – A vital player for this team; moving him creates more problems than it solves.
  • Dustin Penner – 4.25 MM – He won’t be waived, but if the Oilers can trade him and bring in a different LW I think they will.
  • Ales Hemsky – 4.1MM – A bargain at this salary.
  • Patrick O’Sullivan – 2.925 MM – O’Sullivan may be dealt, but he really isn’t overpaid relative to his production.
  • Fernando Pisani – 2.5MM – Since Pisani’s contract comes off the books next season, moving him doesn’t help the long-term picture.
  • Ethan Moreau – 2.0MM – I’m generally critical of Moreau, but he brings necessary ingredients to this team and isn’t overpaid by much.
  • Robert Nilsson – 2.0MM – The Oilers gambled on Nilsson’s potential, and haven’t done well to this point. He would be a bargain if he could get back to scoring, but they may not be able to wait that long.
  • Sam Ganger – 1.625MM – A key player for this franchise for at least the next five years.
  • Andrew Cogliano – 1.133MM – The Oilers seem committed to keeping him; has goal-scoring potential.
  • Marc Pouliot – 825K – Cheap and versatile.
  • Zack Stortini – 700K – Not a problem salary-wise.
  • J-F Jacques – 525K – Ideally priced; jury is still out on his NHL effectiveness.

Defensemen

  • Lubomir Visnovsky – 5.6MM – High-priced defenseman is worth the money, possesses a NMC.
  • Sheldon Souray – 5.4MM – High-priced defenseman is worth the money, possesses a NMC.
  • Tom Gilbert – 4.0MM – Reasonably priced for his offensive contributions, Gilbert may still be moved because the Oilers probably need to take money off the back end.
  • Steve Staios – 2.7MM – Overpaid relative to his actual contribution, Staios is an obvious candidate to be moved – if anyone will take him.
  • Theo Peckham – 600K – Affordable, but as with Jacques the jury is still out on how effective he can be.

Goaltenders

  • Jeff Deslauriers – 625K – For all that the Oilers talk about their belief in JDD, I sometimes wonder if they aren’t just thankful to have a cheap backup option.

Armchair GM: My Solution

Assuming that a big package for Heatley is out (ideally consisting of Penner plus either O’Sullivan or Gilbert), there are a few other things worth considering:

Get a cheap goaltender. Tambellini and Co. seem committed to getting someone in the 3MM range to tandem with Deslauriers. I’m a little leery of some of the options (please not Clemmensen) but this is one of the few areas where money can be saved – either with Roloson or someone like Craig Anderson coming in on a cheap contract.

Move Souray to California. Rumours persist that Sheldon Souray would like to be closer to his children. His market value has never been higher, and if that is indeed his desire than a team like Los Angeles would seem to be an ideal fit. If the Oilers could bring back a player like Frolov, so much the better.

Clear out the deadwood. Staios and Nilsson both have some things working for them as players, and there may very well be interest from different teams in one or both. If not, Nilsson’s 2MM contract isn’t quite as much money to burn in the minors. Both could be easily replaced with bargain-bin free agents.

If all else fails. Assuming that Souray doesn’t want to be moved and Staios and Nilsson don’t attract any interest at all, there are precious few options left. One or more of Gilbert, O’Sullivan, Grebeshkov or Penner would need to be moved – and moving any of those would likely involve taking on salary in return.

  • Hippy

    I'm still amazed by the amount of blame that makes it's way to Kevin Lowe. I'm not even a Lowe supporter, but think we as fans might want to look in the mirror in respect to some of our contracts that we so easily bash him for. Did we sign the contracts? No. But did we help pressure them being written up? Perhaps…

    Penner was a reaction to crying fans that the Oilers took no action improving their top six. Was it a mistake? Maybe, but we don't know as he could pot 30 goals and be that way for the next 3 years.

    Nillson was a steal compared to the year he had that earned him that money. None of us would have thought he'd dip so badly.

    Horcoff was an odd one, and an error, but was having a career year before he was injured and we use it far too often to judge Lowe's entire tenure as GM.

    The Pronger trade which we are so quick to say we got hosed on, was ironically identical to the Pronger to Philli trade which so many people seem to think was a huge overpayment by the Flyers. I belive it was a huge overpayment, but feel Pronger had more value now than back then with only 1 yr left. Gives the team who has him cap options should things dive.

    We can't attract players here. It's simple. We had a coaching staff the players stopped listening to and a style players were tired of and as fans we demanded a change every summer. Perhaps while we can't say Lowe was in the top 10 GM's, we can cut the guy a little break here. This is a tough place to be GM and Tambellini is starting to find that out.

  • Hippy

    If the Cap goes down next year don't the player's salaries also drop accordingly , is not that what the escrow fund is for?
    I thought if the cap drops 15% so do all the contracts as well.

  • Hippy

    A few things that seem to always be missed when presenting the "doom and gloom" of the Oiler salary situation:

    1. Most teams that can spend, have spent and are in the same situations. Alot of those that can but haven't will be blowing their wad 18 hours from now. Run down the list of haves in a week or two and you will see almost everyone is in the same situation

    2. Ties into #1 a little but… We have more players signed then most teams. 18 guys for 50 million > 13 guys for 50 million

    3. Most contracts were signed under the assumption of a consistantly rising cap. Their will obviously be blips in the map (but this was an abnormally large one). Over the short run a flat or dropping cap is likely, but over the long run a rising cap is all but guaranteed.

    4. We like to punish mangement for not foreseeing what looks like the 2nd worst financial melt down in modern times

    5. Our top 6 is VERY young, I'd bet they are in 5 youngest in the league, for the most part they should be improving simply with time. Most of the holes that do need filling are bit positions that aren't that expensive.

    6. The potential dropping cap MAY be blown way out of proportion by those looking to drum up controversy (what is it? 90% of posts now start with "with the cap droppin)

    A. The 09/10 revenue figures used to determine the 10/11 cap are just now begining to be earned, no one really has any idea what they will be

    B. The economy is actually firming up nicely, credit markets are all but back to normal, economic data has flattened out and business is starting to go "back to normal". The average reccesion is about a year in length, the extreme are usually less then two. Thiers no set date as to when this started, but it appears to be a year+ already, we are very likely in the 7th inning of the reccesion.

    C. I have yet to see which of the two primary parties (teams/players) benifit from a large reduction in the salary cap ceiling… how often do you see parties maintain a contract where both sides lose?

  • Hippy

    What the Oiler's management should do is write this season off and put themselves into a better position to manage the cap going forward. Sign a couple of cheap, older vets at forward on one year deals, deal or stash Nilsson in the minors and get Grebs, Smid, and Roli signed (Roli to a one year deal as offered, Grebs and Smid to reasonable deals) and somehow deal Penner and Souray over the upcoming season for some younger talent or picks, the team will be much better off in the long term. It may be a long season again but… short term pain for long term gain is what I say.

  • Hippy

    humantorch wrote:

    I said it before, but I’m sure in 10 years we’ll look back on the Lowe regime post-lockout as easily the worst-managed period in franchise history.

    Hmmm, i don't know. Sure he took some gambles, but imagine if Penner became a 35 goal scorer and actually used his big body to hit some people? What team doesn't have a few bad contracts? We all want the best players available and sometimes there is a price to pay to get them. Lowe took some gambles to try and lock up players at a cheaper rate before they reached their potential. Look at Hemsky… wonderful contract! Anyway, we'll see what happens down the stretch…

  • Hippy

    The rumours of Penner, Souray and Nils going with Heater, JJ and Wayne Simmonds coming back would be just fine by me. I'd like Betts coming our way too and MAP would have to look for another team…maybe a 3 rounder in return? Unfortunately it saves us only 653,000 and that's without Betts.

    Sign Grebs and JJ for about 3.5 each, sign Smid for 1.5 and Rollie for 3 and were at 54mill with Brule, Struds, Potulny and Schremph to go…and then Betts? Tough…we need to move Staios I guess

  • Hippy

    @ humantorch:
    except of course for the wonderful summer of 05 and the great deadline of 06.

    That first year was a beauty, not a single bad trade for the oil. since then there have been only a handfull of trades that have pointed the ship in the right direction.

  • Hippy

    Clarkenstein wrote:

    Thank you Kevin Lowe!!

    I said it before, but I'm sure in 10 years we'll look back on the Lowe regime post-lockout as easily the worst-managed period in franchise history.

  • Hippy

    There's no question Tambo has his work cut out for him!
    It seems that more than ever we need to offer players some intangibles to come play in the beating heart of hockey.
    I wonder if Katz is willing to offer an all expenses paid trip to his summer home in (wherever) via his private jet as some incentive?
    If Calgary ends up signing JBo and moves Phaneuf for Heatley…I may just bitch slap the next loudmouth flame fan I see!

  • Hippy

    I've come to teh sad conclusion that the only fate of an oiler fan is dispair.

    If Bouwmeester signs outside of alberta it will have been a good off season for the oil.

  • Hippy

    @ Antony Ta:
    I've read several sources that say yes. Perhaps they're all just quoting one another and perpetuating the rumour, but if you think about it, it would make sense to Souray. Back with his family, out of the spotlight, beautiful climate, same job, same money; what's not to like?

  • Hippy

    Discouraging when the freaks down the highway may be about to announce the signing of another Edmonton born and raised star. Excuse me while I join Souby in emptying the vomit from my mouth.