Justin Schultz and the Edmonton Oilers’ second buyout window

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It’s been clear for a while now that the Edmonton Oilers have too many poor defencemen signed to NHL contracts, but what hasn’t been clear is how the team planned to thin the herd. On Monday we seemed to get an answer.

There’s a lot of confusion about whether taking Schultz to arbitration would open up a buyout window, and some of that confusion is my fault. On Saturday, I wrote that it was my understanding that the Oilers would need two cases to open up the buyout window. Reading through the CBA again, they may actually only need one.

The CBA Stuff

Scott, Bill

My understanding was based on paragraph 11.18 of the CBA:

11.18 Ordinary Course Buy-Outs Outside the Regular Period. Clubs shall have the right to exercise Ordinary Course Buy-Outs outside the regular period for Ordinary Course Buy-Outs in accordance with Paragraph 13(c)(ii) of the SPC. Each Club shall be limited to no more than three (3) such Buy-Outs outside the regular period over the term of this Agreement pursuant to Paragraph 13 of the SPC. However, in the event that a Club has only one salary arbitration hearing pursuant to Section 12.3(a) in a given League Year, such Club shall not be entitled to exercise such an Ordinary Course Buy-Out outside the regular period. Moreover, a Club shall not be entitled to exercise an Ordinary Course Buy-Out outside the regular period for: (i) any Player who was not on the Club’s Reserve List as of the most recent Trade Deadline, or (ii) any Player with an Averaged Amount less than $2,750,000. The dollar amount of $2,750,000 set forth in this Section 11.18 shall be increased on an annual basis at the same percentage rate of annual increase as the Average League Salary, with the first such increase occurring based upon a comparison of the 2014/15 Average League Salary to the 2013/14 Average League Salary.

(emphasis mine)

The bolded section of the text clearly indicates that the Oilers would need multiple 12.3(a) salary arbitrations to trigger a buyout window. The 12.3(a) arbitration is the one we’re familiar with – where a team takes an overpaid player to arbitration in order to get his salary reduced. That’s why it makes sense that a team would need multiple hearings to trigger a buyout window, because the second buyout window is designed to help teams get out of cap trouble and a 12.3(a) arbitration has the same purpose, likely resulting in a reduced salary. So there’s no need for a buyout to clear money after a 12.3(a) hearing.

However, there’s a second kind of club-elected arbitration: 12.3(b).

12.3(b) Club-Elected Salary Arbitration For Players Who Receive Qualifying Offers.
(i) If a Group 2 Restricted Free Agent has not accepted his Club’s Qualifying Offer, nor filed a request for Player-elected salary arbitration in accordance with Section 12.2 above, the Club may elect to file for salary arbitration to determine that Player’s Paragraph 1 Salary for that League
(ii) If a Club elects salary arbitration in accordance with this subsection, the Club’s offer in salary arbitration must be equal to or higher than the Player’s aggregate Paragraph 1 Salary plus Signing, Reporting and Roster Bonuses in the final League Year of the Player’s SPC.

This is arbitration designed to prevent holdouts. Unlike 12.3(a) there’s no possibility of reduction in salary here; an offer to a player must be at least equal to his total compensation in the previous season. That means there’s no chance of the team saving money, which is why (if I’m reading the CBA correctly) it only takes one arbitration of this kind to open up a buyout window.

TL;DR Summary: There are two kinds of club-elected arbitration: 12.3(a) and 12.3(b). 12.3(a) allows a team to get a player’s salary reduced, but there need to be multiple arbitrations of this kind to trigger a buyout window. 12.3(b) doesn’t allow for salary reduction, but does trigger a buyout window. My guess is that the Oilers have opted for 12.3(b) with Schultz. Finally, as always, I am not a lawyer.

Schultz & The Buyout

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If I’m right that it’s a 12.3(b) arbitration hearing, the annoying thing about all this is that it means Justin Schultz will continue to be overpaid. He didn’t deliver value on the $3.675 million he was paid last year, and he’s going to get at least as much money this time around.

But it should open up a buyout window.

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It’s been generally assumed that Nikita Nikitin would be the buyout candidate. He has one year left on his deal at a $4.5 million cap hit, which would mean the Oilers would be on the hook for $1.5 million in each of 2015-16 and 2016-17 if they were to buy him out. But the more I look at it, the more I wonder if Andrew Ference isn’t a preferable buyout candidate.

Ference has two years left on his deal, and because the salary varies over the course of the contract the buyout math is a little bit complicated. I calculated it back in February using the CBA’s examples as a reference point and ended up with a buyout cap hit of $0.67 million in 2015-16 and then $1.17 million in each of the three seasons following that.

If the Oilers buyout Nikitin, it means they have Ference taking up a roster spot and a big chunk of cap space for two more years, followed by nothing. If they buyout Ference, it means they have Nikitin taking up a roster spot and a big chunk of cap space for one year, followed by three seasons of modest cap hits related to Ference’s deal.

I don’t think it’s at all clear that Ference is the superior player to Nikitin at this point in time. Nikitin gets better results on the penalty kill, can fill-in on the power play and historically has been much better playing his off-side than Ference. He’s bigger, younger, and has a better chance of bouncing back this season with good health. He may even have some trade value at the deadline, and unlike Ference does not own a no-trade clause.

Nikitin’s more versatile, and more importantly his contract is done and gone at the end of 2015-16, meaning the Oilers won’t have to go through this whole process again next year when they try to dump Ference’s deal.

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One can make a case either way, but I’d be sorely tempted to buyout two years of Ference rather than one year of Nikitin.

RECENTLY BY JONATHAN WILLIS

  • mcjesus take the wheel

    Lol. I wonder how many of you actually watch hockey. Shultz gets so much hate even at 3.65 mill. Yet most of you want to sign that peice of junk Franson to 5+??? My god. Look around the league. Shultz has warts sure but is our only guy that drove scoring chances from the D most of last year. At 3.65 hes right where he should be. I guess we should be paying Gardiner 4+ mill instead? Sheep. Baaaa.

    • oilerjed

      The fact that Shultz was the main d that did drive scoring chances(albeit rarely) was one of the major reasons we were in the position to draft Conner.
      That is NOT a tic in the Shultz ledger.

      He rarley finished and more then made up for it with the other teams scoring chances(which always seemed to be finished)

  • AJ88

    I with the vast minority of ON believe Schultz will have a major turnaround year in 2015/16. I believe he has been totally mishandled by coaching (Eakins) and management. The constant degrading by ON writers and posters of players is bordering on pathetic, guess that is what a few years of losing does to some people. I know, let’s just trade Schultz for Weber, Nikitin for Doughty and Ference for Toews and forget the buyouts.

    • OilCanFan1

      I also think that Schultz will have a turn around year as will Nikitin. I think both of these players have self respect and know they each performed well below expectations. Both players also want new contracts so there is further incentive for improvement. I also believe that Nikitin played injured when he should not have due to the crappy depth last year.

    • Being mishandled or not is borderline irrelevant in the argument for Schultz.

      The player is soft as butter, has little compete level, is constantly caught out of position, doesn’t stand up for his teammates in scrums, and is infamous for inventing “jultzing”. He’s actually regressed as a player!

      Sure, you can blame Eakins and management for misusing him but regardless of what pairing he plays on.. he’s still going to jultz and he’s still going to cost the Oilers games.

      Schultz is 25, not 21. If he hasn’t figured it out by now, odds are he’s never going to.

      • AJ88

        The concept of mishandled would naturally lead to “regression”. Good management and coaching should lead to progression of all players which we will see this year. However most of ON has written him off as others have written off Hall, Eberle, trading RNH, etc. By the way “jultzing” is only infamous with the ON wannabes.

        • Excuses Excuses. Again, Schultz is 25. You can’t magically change a players personality. He either wants it, and is willing to work for it or he doesn’t. RNH improved his overall game under Eakins despite being thrown to the wolves ever night, and while I don’t deny that Eakins was a garbage coach, to think Schutlz will do a 180 is wishful thinking.

          And who has written off Hall, Eb’s or RNH?

          Btw you can google “jultzing” and 593 results come up.

          • AJ88

            No problem, we can disagree, in March let’s carry on this conversation. 593 results! All from ON, Copper and Blue, etc, it must be infamous. Actually the saying is quite disgusting coming from a pack of hockey wannabes.

            You don’t think ON followers have not written off some of the core players on a consistent basis? though it has got a little quiet since McD entered into the picture, And yes RNH is the one that has improved his play despite the negative environment, it is one of the reasons he should be considered untouchable.

            Interesting year ahead

          • The Soup Fascist

            Defense is a team concept.

            The numbers don’t mesh with the visuals, and too often Schultz was paired with can’t skate Ference or Nikitin and our skill players floated way too often in the D zone.

            Besides much of the “jultzing” was him isolated vs. opposition skill players with nobody to help out or teammates vastly out of position and even elite defenders give up goals in those situations.

            It’s not a surprise that he played better with a rookie who could skate and assist with mismatches.

            With an improved defensive corps, McLellan stressing more of a team defensive game and most of Justin adding some weight and more physicality and effort under a coach with some concept of accountability,, we could see a vastly different player.

          • Joy S. Lee

            Nicely said. I’m not a big JS fan due to his past lack of intensity and defense, but it is almost always a good calculated gamble to see what talented players do under different (upgraded) coaching. Few things cause greater inspiration for change than those of humility and shame. Put it all together and it’s definitely worth seeing what some of the previously untapped potential around here is truly capable of. #97 spurs that, as do the new coaching, management, and direction of the organization and team. I would be one who is skeptical of trading away untapped talent, no matter who they are; including Schultz.

            I’m all for the vastly different player. And I think that he has to be.

  • OilCanFan1

    JW – Unless I missed something, you don’t address the idea of buying out both of them. Is it your interpretation that 12.3(B) only opens a buyout window for one player? If it clearly opens a window for two the Oil could sign another, better UFA D man now with the cap space this will open.

    • I don’t see anything specifically in that paragraph holding the Oilers to just one buyout in the new window, but I’d have to do a lot more reading before offering a firm opinion.

      I just don’t know if the new buyout window entitles them to multiple buyouts.

      • number99

        If the period re-opens (like it does when you file on a player that has not accepted a QO) the only quantity limit listed is the 3 per team over the life of the CBA

      • Classy article. Always a tonne of respect for anyone who corrects/notes an error they made (even a very small one like this).

        Should we all be that humble.

        I also tend to agree with you that it may make more sense to buy out Ference. Nikitin comes off the books next season and has some advantages: a bomb from the point on the PP being the main one IMO.

  • iamSean

    All this buyout talk sounds short-sighted. So you want to buyout one overpaid veteran (Nikitin/Ference) so that you can sign another overpaid veteran (Franson/Oduya/meh). That’s a steady path to cap hell if you’re always looking to dump yesterday’s fad for today’s shiny new toy.

    It wasn’t too long ago that Nikitin and Ference were competent NHL defensemen. Yes, the years have caught up to Ference but to go from second pair in Boston to a buyout candidate with a four-year cap penalty? He hasn’t dropped off *that* much. Maybe if the forwards on this team put some effort into supporting the defense like they do on a playoff-caliber team, then the goaltending and defense would stand a chance on more nights. But of course, that would mean holding Hallsy and Ebersqueee accountable and that wouldn’t be fun for all of us. I hope McClellan can help in this regard.

  • NN and AF should both go in a trade for Arizona, those two, plus their contracts and a third, to the coyotes for a 7th rounder. If the pot wasn’t sweet enough, we could also retain $2 mill in salary this year, and have somewhere in the 5-6 mill range to go sign another UFA D.

  • sportsjunkie007

    If Oilers buyout one, there’s no reason to not buyout both. If it’s going to happen, do it while there’s still some decent free agent defensemen available.

  • number99

    I don’t like the idea of four years of dead money for Ference. The fourth year is when McDavid will get an extension.

    A buyout of either Nikitin or Ference would save us 3 mil this year. If they buyout Nikitin rhis year, Ferrence could be bought out next summer at 1.17 (Willis’ number), leaving us with a combined dead 2.67 mil next year and 1.17 mil in 2017. That scenario would leave us without dead money in the huge contract year of 2018. Saving that 1.17 in 2018 could help us keep an NHL player like Pouliot or Eberle (who will both be in their final contract year).

  • BobbyCanuck

    2013 Cup Saad -1: Bickell +11; Toews +9; Hossa +8: Kane +7; Handzus +7; Shaw +2; Sharp +1; Frolik +1.

    Saad was an anchor for the 2013 cup run. A BOAT ANCHOR!

  • BobbyCanuck

    Am I the only one?

    That would be ok with the Oilers floundering around for another year, until some contracts just expire on thier own

    That would be ok with letting Schultz walk

    Sending McDavid to the AHL for the year

    Would solve a lot of problems right now, and deffer future problems by a year

    My rationale revolves around the fact that we have sucked for so long, what’s another year?

  • Double Dees

    i think it would be insane to throw a huge amount at Franson who is at a best a 4-5. Why overpay for him and end up in the same boat as we are now with Nikitin?

    why replace one mistake with another? just have some patience the reason we are in this mess is because of bad knee jerk decisions. I am happy PC is not jumping and paying huge money for marginal players.

  • ubermiguel

    Willis: What does paragraph 13 (c) ii say about buy outs ? Is it up to three buyouts over course of the NHL contract ?

    Seems rather senseless to use buyout on Schultz and let him go for peanuts/nothing to another club , while we get a double whammy on years on a cap hit for doing so . Why not even offer him a contract if you were planning on not keeping him . That way it costs you nothing at least .

  • ubermiguel

    Sooooo…..Is anyone else wondering when the GDB is going to be posted?

    Connor McDavid’s first unofficial game as an Oiler kind of a big deal *end sarcasm*

  • ubermiguel

    Nikitan and Purcell would both be good trade deadling aquisitions (worth something). If Oilers didn’t trade them it’s because they were playing up to their value and they were in a playoff position (or close). Nikitan could still get moved to bring up a kid.

  • vetinari

    Question for you JW.

    When the buyout window opens are the Oilers able to buy out more than one contract? For example, could they buy out both NN and AF?

    If this is an option it could really help set the table for Todd McLellan and the 15-16 Oilers.

  • Ready to Win

    Question for you JW.

    When the buyout window opens are the Oilers able to buy out more than one contract? For example, could they buy out both NN and AF?

    If this is an option it could really help set the table for Todd McLellan and the 15-16 Oilers.

  • YFC Prez

    I really like Ference. The person he is and the defenceman he was. Too bad age catches up to us all. He’s faded.

    Really hard to see where he and Nikitin fit. Especially with Reinhart and Nurse pounding on the door so hard the hinges are starting to crack.

  • Ready to Win

    One question about taking Schultz to arbitration – what are the chances that he ends up getting a raise out of it?

    I know nobody who watches hockey would give him one, but isn’t the arbitrator just some lawyer who listens to their arguments? If Schultz goes into the hearing and says “I played more minutes than Petry, scored more points than Petry and Petry just got $5.5mil.” Could the Oilers be on the hook for a huge sum that they wouldn’t be allowed to walk away from?

    • YFC Prez

      I was always under the impression teams could walk away from a salary arbitration if they don’t agree to the terms. Then Schultz becomes UFA.

      Now once again CBA stuff is Greek to me so someone else may have to tell you how dumb I am and inform you of the correct protocol if I’m way out in left field on this.

      • Ready to Win

        I am certainly no expert on the CBA, but my takeaway from what I’ve read this week is that teams can walk away from player elected arbitration, but they are bound to team elected arbitration (which is the reason for the buyout window; because the team has to pay the money which is awarded)

  • Ndustry

    Umm I don’t think we can accurately value any players during the Eakins era. If you look at Schultz he was on pace for a 46Pt season his rookie year of 13′ with 27pts in the 48 Game half season. This year he still had the highest GF%relTM with a whopping 12.16 (that’s 7th in the league over 500 mins). I remember even Yakupov was on pace for 53Pts had it been a full year in 13′. And then Nikitin, he was trending High before coming to EDM. He actually played alot with Letestu and they did well together, and he had the best +/- on CBJ’s defense and one year he had 32PTs in 54 Gms, If you wanna know how far he fell off this year he was a -10.3 GF%RelTM on CBJ he was +4.8. So the odds are he’ll balance out again and hopfully be a progressive + as he was trending before he came to this deathpit lol

    I think Ference and Fayne have the most value to other teams but nobody with cap space has any worth while players to get in return say 2M range and I doubt they’ll trade an entry level contract so I don’t know, unless you can get like a Palmieri (who NJ just traded for) it’s going to be tough to Dump salary. I’d have liked to aquire another asset – Erhoff, Franson, Del Zotto was my #1 but PHI wont trade him now, unless they hate the Arbitration award – and then give away our overage players in some rather lopsided trades and maybe pick up a value or undervalued bargain player in the process. It looks highly unlikely this strategy will work now though, because everyone is at the cap and the teams that aren’t don’t have anyone lol

  • CMG30

    I would much prefer to retain salary and trade Ference than keep a cap hit on the books for 4 years, even a modest one.

    Dito for Nikitin. Although, in his case I’d be tempted to check up on his offseason training, and if he seemed motivated, I’d grit my teeth and let him play out the final year so as to clear the books for good. Throughout the year, I’d try to retain salary and trade him to a team in injury trouble. Who knows, being a contract year he might surprise…

    Finally Schultz: I’ve been pissed with Schultz for a while now, but lately I’ve been reconsidering my position. Perhaps with a new coach reducing his minutes and better players shouldering the load in front of him, he might finally figure out the game. Come on McLellan, fixing guys like this is where you earn your pay!

  • Wax Man Riley

    I’d love to see the Oil improve ASAP, but something about buying out Ference feels wrong. Great in the community, native Albertan, workhorse off the ice, team Captain… I hope they can trade him to a contender instead, for anything. Nikitin can be put in the minors for all I care, but really hope Ference gets the classy organization treatment, somehow.

  • Wax Man Riley

    Don’t blame Schultz for what he gets paid – the Oil offered and he took it. Wouldn’t you? It was a dog fight to sign him and the Oil overpaid. Not his fault they overpaid.

    He was too inexperienced to be a top pairing D – he fell flat on his face. Why is anyone surprised? That is where the team put him ’cause they had no choice. Again, not his fault.

    Pick up a second Top 4 D, move him to 3rd pairing with less pressure to gain more experience and then see. He is NOT blameless in this but the coaching staff put him in a position where he was doomed to fail.

    With Nikitin and Ference – there is little hope.

  • Harry2

    Nikitan Purcell and Scrivens are all coming off the booksafter this season. bury NN in the minors and dont resign him.

    Seriously am i missing something? Why buy him out when you could simply just not play him

    • Impatience.

      Some of us look at the roster and “believe” that one more upgrade on defense and the team will actually be significantly improved. Maybe even improved enough to make the playoffs. The current roster seems better, but not playoffs better.

      The only way to currently improve the roster is to get rid of some salary and a body or two. A buyout can do this, and has the advantage of dumping a perceived bad player along with their bad contract.

      Is it a good idea? Only time will tell. It does seem, as my Dad would say: Robbing Peter to pay Paul.

      It is interesting to note, that this is not Chiarelli’s only option (buyout) to create cap space.

      Your way is pragmatic and may be the better option.

      • Harry2

        Im not saying dont get rid of anyone. I think they should wait until September and find a team that needs a dman. Then retain salary and trade Nikitin or Ference for a late round pick.

        A buyout creates a cap burden for longer than a trade with retained salary would so thats the route I would go

  • The Soup Fascist

    Since we have the money this year, why not just pay them both full salary and then it’s not something that drags on and on and on. Even if they have to play in Bakersfield. I’d rather have the extra cap room next year, not this year. Or trade bait late in the year and retain some salary.

    • Joy S. Lee

      So long as they have space to add Contracts (players) who can actually help the parent team Oilers – dare I say it? – make the playoffs…now. I see what you mean, and agree with the premise, but they have to find a way to ice the best team that they can, too, and I guess that’s the balancing act part of it all.

    • Oilerz4life

      Depth goalie probably brought in because Bachman is gone to Vancouver. Brossoit has a better shot than Nilsson no doubt and probably just added for depth but you never know I guess maybe, but a long, long shot. 3.05 GAA I think, not very good numbers.

  • camdog

    If the Oilers buy out NN or Andrew Ference that would allow them to give Franson a 5 year 25 million dollar deal or trade for Phaneuf. And then in 2-3 years we can buy out Franson or in 3-4 year we would be set to buy out Phaneuf…

    Maybe it would be best to let the bad contracts die and build from within.

    • camdog

      See post #110.
      There will be no further free agent signings by the Oilers this year, except in the unlikely event someone is kind enough to take 1 or more bad contracts off our hands without sending any back.

  • camdog

    A July 5th article by David Staples in Cult of Hockey contains a chart showing how much Cap space teams have available for 2015/16.

    Based on his chart, the Oilers have $67.8 million committed, so space is $3.6 million. These numbers do not include a contract for Schultz or (i believe) Pitlick; they also do not include contract bonuses for Nurse or Draisaitl.

    Since the Schultz contract alone will put the Oilers over the cap, it seems very likely that Chiarelli has already found a trade partner for Scrivens, and will be buying out Nikitin.

    Chiarelli is a business manager and has no emotional investment in Scrivens; he would also be familiar with his potential (or lack thereof) from when he played for the Leafs.

  • toprightcorner

    I don’t think Nikitin holds a candle to Ference in overall value to the team. No heart, no passion, no committment, no thanks.

    Not saying Ference greatly helps the team but to save $330k for 2016-17 and pay $1.17 mill for 2 more years does not makes sense. Oilers don’t need extra cap space this year or next, but in 3 years they will and buying out Ference will short them on the cap side.

    Also another year of Ferences leadership on the back end with basically all rookies other than Sekera is beneficial, they can trad him at the deadline the following year no problem.

  • toprightcorner

    Buying out Ference means the Oilers need a new captain and Hall is still not ready to be captain. Even though the “don’t mess up what we built over the last 5 years” tweet was funny, it was not becoming of a captain. Push off the captain decision for a few years and I bet McDavid will prove he will be the better choice.

    If required, name Hendricks captain for a couple years. If he can captain the World Championships he is plenty good enough for the Oilers.