The drop in the Canadian dollar is doing unpleasant things to NHL revenue, and those unpleasant things are going to be reflected in the new league salary cap this summer. According to reporter Jimmy Murphy, sources within both the NHL and NHLPA are saying that the number could fall by as much as $4.0 million.
What would that do to the Edmonton Oilers?
Told by an NHL & NHLPA source that 2016-17 cap could go down as much as $4 million. If true, interested in what that does to trade deadline
— Jimmy Murphy (@MurphysLaw74) February 12, 2016
If the cap drops that far—and as James Mirtle notes, much will depend on the NHLPA’s willingness to use a cap inflator—then a lot of teams are going to be in trouble.
That list does not include the Oilers, who might not like a $67.4 million salary cap but would be able to comply with it without too much difficulty.
Using NHLNumbers.com and a little bit of forecasting we can create a hypothetical Oilers roster composed entirely of players currently under contract/restricted free agents likely to be signed.
The total cost of the above roster comes out to just under $66.2 million, and includes the following assumptions (each marked with an asterisk):
- A one-year qualifying offer for Zack Kassian at his current salary of $2,000,000.
- A one-year qualifying offer for Iiro Pakarinen including a five percent raise to a salary of $885,150.
- A two-year contract for Brandon Davidson at $900,000, based on this list of comparables.
- A one-year qualifying offer for Adam Clendening including a five percent raise to a salary of $798,000.
- A one-year qualifying offer for David Musil including a five percent raise to a salary of $938,874.
- A buyout for Andrew Ference.
- A one-year qualifying offer for Laurent Brossoit including a five percent raise to a salary of $692,124.
Griffin Reinhart is not included because the Oilers have so many entry-level deals (McDavid, Draisiatl, Nurse, possibly Slepyshev and Kessy) with a bonus component. They thus can’t count on having any bonus cushion next year and at $3.4 million Reinhart is too overpriced to keep in the NHL at a $67.4 million cap.
The roster above is an approximation and in some ways an exaggeration, because the Oilers may be able to shave off more money. Several cost saving approaches could be taken:
- Players on two-way qualifying offers or in danger of falling out of the NHL altogether could well be offered one-way deals at a lower cap hit. Would players like Clendening, Musil or Brossoit really turn down one-year, one-way $600,000 contracts? Would Pakarinen turn his nose up at a one-year, $800,000 offer? That’s $700,000 in savings right there.
- Korpikoski isn’t worth the money he’s getting paid, and a buyout (by my math) would reduce his cap hit to just $500,000 next season and $1,000,000 in 2017-18. Assuming that he can be replaced in free agency for $600,000, that’s $1.4 million in savings.
- Alternately, Edmonton could run with a 22-man roster, keeping just one spare forward and one spare defenceman. That would nix the $600,000 we just added to the books with a Korpikoski replacement.
Those cost-saving approaches could leave Edmonton with nearly $4.0 million to play with, easily enough to bring in an upgrade (or, alternately, to recall Reinhart). At a $67.4 million cap, probably half the league would be in serious cap trouble and looking for a way out of it, and the Oilers would be one of the few teams in a position to take some of that money on.