It is buy-out time in the NHL. For a brief window between the middle and end of June, teams have the option to buyout unwanted contracts, in most cases giving the player two-thirds of his remaining salary over twice his remaining term. In most cases, such a decision clears significant money from the books, and in a few instances it is going to allow teams more protection flexibility heading into the expansion draft.
For the Edmonton Oilers, there are two obvious buyout candidates: Benoit Pouliot and Mark Fayne. Both were signed by the previous administration, have fallen out of favour with Peter Chiarelli/Todd McLellan, and both are significantly overpaid relative to their current roles with the team.
In both cases, Edmonton is probably best-served by avoiding buyouts. The reason is Connor McDavid.
This summer is going to be somewhat difficult for Edmonton financially, thanks primarily to the expiration of Leon Draisaitl’s entry-level deal. But it’s next summer when Chiarelli will really need to juggle. Not only will Draisaitl have a new deal, but McDavid will be on what is sure to be an extremely lucrative second contract. As a bonus, the Oilers have a lot of other deals that expire at the same time, with Darnell Nurse and Patrick Maroon probably the most notable in the non-McDavid tier.
Let’s start by looking at Fayne. As it stands now, his contract has one season left at a rather hefty $3.5 million cap hit, but is off the books in the summer of 2018. Using Article 50.5 (d) of the CBA to calculate the changes, here’s what it looks like if Edmonton buys him out:
- 2017-18: $1.29 million cap hit
- 2018-19: $1.17 million cap hit
Basically, the Oilers would save a little over $2.0 million this coming season, but defer more than $1.0 million to 2018-19, which is shaping up as the most difficult year that Edmonton has ever had from a cap perspective. It’s almost certainly better to eat the higher dollar figure now than it will be to try and find that money while also paying McDavid.
Next, Pouliot. As things stand now, he has a $4.0 million cap hit and actual salary over each of the next two seasons. If the Oilers buy him out this summer, this is what happens:
- 2017-18: $1.33 million cap hit
- 2018-19: $1.33 million cap hit
- 2019-20: $1.33 million cap hit
- 2020-21: $1.33 million cap hit
That kind of cap penalty isn’t insurmountable, but it isn’t pleasant, either. More importantly, there are two other options.
The first would be to wait to buyout Pouliot until the summer of 2018, at which point the Oilers would only be dealing with a $1.33 million cap hit for the first two rather than the first three years of McDavid’s new deal.
The second and better option would be a retained salary trade. If Edmonton retains 50 percent of Pouliot’s contract, he’ll have a highly digestible (both for the Oilers and for the team that acquires him) cap hit of $2.0 million for each of the next two seasons. That should be a tradeable contract; after all, we’re talking about a 30-year-old who can kill penalties and had 36 points in 55 games just one season ago. With a mild sweetener, there’s no reason a building or rebuilding team (Vegas, Colorado, etc.) should be unwilling to take on such a short-term commitment to a player that might bounce back and who would then have actual value.
In a pinch, buyouts would be real possibilities for both players. Edmonton isn’t in a pinch yet, but will be soon, so it makes sense to digest as much of the pain sooner rather than later.
By hanging on to Fayne and retaining salary in a Pouliot trade, the Oilers can have all but $2.0 million off the books by the end of McDavid’s entry level deal, and even that $2.0 million headache will only last for a single season, rather than three. Buying out both right now, on the other hand, would leave nearly $5.2 million on the books for when the Oilers to juggle as they try and squeeze McDavid’s new contract under the salary cap.