This is going to be a difficult summer for many teams thanks to a salary cap which has risen by less than expected early in the year. For a team like the Edmonton Oilers, there’s a chance to land talent from a team in cap trouble.
Taking Advantage of Cap Hell is dedicated to looking at clubs reportedly in cap trouble and figuring out who might shake loose. However, I’ve had some requests for a more precise look at the Oilers’ own situation, so rather than look at a vulnerable opponent our attention today turns to the home front.
Previously in this series:
The Depth Chart
For the sake of simplicity I have made a few assumptions. Connor McDavid is penciled on to the roster, and paid the rookie maximum. Darnell Nurse and Leon Draisaitl both make the team. Three restricted free agents (Justin Schultz, Martin Marincin and Tyler Pitlick) are given one-year qualifying offers and all accept.
Here’s what the team looks like with those assumptions.
Total Cap Hit: $66.4 million
Total Cap Space Remaining: $4.6 million
Superficially, that’s not a lot of cap space, though it’s all luxury space in the sense that this roster is entirely staffed. The problem though is that if Edmonton does something like, say, spend $5.0 million per season on Antti Niemi (sending Laurent Brossoit down to Bakersfield in the process) that pretty much fills it up.
As it stands, this roster has room for one pricey addition. But appearances can be a little bit deceiving, because the truth is that Edmonton has all kinds of options here to open up cap space.
Solutions for Edmonton
Buyouts. We’ve talked about these before. For my money, Andrew Ference isn’t really a great option because Edmonton would be turning a two-year contract into a four-year deal and he’s not really bad enough to justify it, so let’s just take him off the table for now. Buying out Nikita Nikitin, bumping up Nurse and Marincin and adding Brandon Davidson ($704,000 qualifying offer) to the roster opens up an additional $2.30 million to add help. Buying out Teddy Purcell, bumping up Nail Yakupov and adding Iiro Pakarinen ($925,000 cap hit) to the roster would clear an additional $2.08 million in space. Potential impact: $4.38 million cleared.
Walking away/club-elected arbitration. Most of Edmonton’s restricted free agents are cheap, and not issuing a qualifying offer would not result in any significant cost savings. The exception is Schultz. who has that hefty $3.675 million qualifying offer. Edmonton could just walk away, bump Nikitin over to the right side and insert Davidson at a cap savings of just over $2.97 million. Alternatively, the team could take Schultz to club-elected arbitration in lieu of a qualifying offer, which could see an arbitrator knock his contract down by up to 15 percent, with Schultz then coming in at a figure potentially as low as $3.124 million (a savings of $551,000). The trouble with club-elected arbitration is the Oilers would be bound by whatever contract the arbitrator decided on. Potential impact: $2.97 million cleared.
Entry-level bonuses. McDavid, Nurse and Draisaitl all have entry-level deals with modest base salaries and signing bonuses and significant performance bonuses. Edmonton has the ability to exceed the cap by the amount of bonus room on each player’s deal, and if those players don’t hit their bonuses there isn’t any negative impact (if they do, the money gets tacked on to next year’s cap). Without knowing the exact structure of the players’ contracts it’s hard to say exactly how dangerous this is and how many bonuses the Oilers could legitimately regard as unattainable. I’d be uncomfortable taking this risk with McDavid, and Nurse’s bonuses are relatively modest, so the big candidate for savings here is Draisaitl. (An alternative approach would simply be to hobble Draisaitl’s bonus chances in the name of development by assigning him to Bakersfield for 20-odd games to start the year). Potential impact: Unknown; my guess would be something in the range of $2.3 million cleared for Draisaitl.
Run a 22-man roster. I think we’ll see this sort of thing more and more as teams battle with the salary cap. The 23-man roster protects a fringe player from waivers, but arguably a team doesn’t always need more than one spare up front and another on the back end. Edmonton could go with 13 forwards and seven defencemen, burying a player like Gazdic, Klinkhammer or Pitlick out of the gate. Potential impact: Up to $800,000 cleared in the event Gazdic is the odd man out.
Naturally, Edmonton could also attempt to trade money away, too.
If I were the Oilers’ G.M., here’s how I would look at the situation. On the buyout front, I’d be reluctant to buyout more than one player; we don’t know what the cap will look like next year and there’s a real risk in deferring to much money to the future. Nikitin would be my choice, clearing $2.3 million (though I’d first look around to see if a retained salary deal involving either Nikitin or Purcell was of any interest to my fellow managers). I would attempt to negotiate a lower contract with Schultz, and if that failed I’d take him to arbitration, fully expecting to see his contract knocked down by $500,000 or so on a one-year deal. I’d also be comfortable going into Draisaitl’s bonus cushion, and wouldn’t hesitate to start him in the AHL if his training camp is anything short of stellar. The 22-man roster is an option but not an ideal one; there’s value in having a useful ‘tweener protected from waivers.
The sum total of those decisions would allow the Oilers to spend up to $5.1 million more than initially laid out, giving the team $9.7 million in total cap space to pursue upgrades (plus, of course, whichever players are subtracted from the roster to make space for newcomers). If it’s done right, that’s probably enough space to add two defencemen and a goalie, though it’ll take some footwork on the part of Edmonton to make those pieces fit.
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