We are all fully expecting the Oilers to be very active this offseason. They have some holes that need to be filled, pending free agents that need to be re-signed, and bad contracts that need to be dealt with. There’s a lot to get done and there’s been a lot of debate around Oilersnation about what Oilers GM Ken Holland should and shouldn’t do.
That’s why I’ve decided to take my offseason wish list for the Edmonton Oilers and break it into five steps. You’ll see each idea get its own article on the site over the next few weeks as we continue debating and speculating about what Holland could do to this roster over the next few months.
STEP 1 – GET RID OF James Neal & Mikko Koskinen
As it sits right now, the Oilers have around $24.1 million in projected cap space with eight forwards, seven defensemen, and one goalie on their roster. That is just taking into account the NHL players signed for next season and does not take into account any moves that could or likely will be made. It is how much money they’re sitting with right now.
Example: Kyle Turris, James Neal, and Mikko Koskinen are all on the roster, as is Oscar Klefbom, and they have not signed a single free agent or brought back any of their own pending UFA/RFA players.
$24.1 million is a lot of walking around money, but it gets dwindled down rather quickly once you start adding in contracts for players like Adam Larsson, Mike Smith, and potentially Ryan Nugent-Hopkins. Add in the depth players that will need to be brought back to round out the forward group and things suddenly get a little tight for the Oilers.
If they want to make more than one big-time addition to their forward group and bring in a quality goaltender to play with Smith, then they’ll need to clear out some money. Getting rid of James Neal and Mikko Koskinen is the best way to do that.
Option one is rather simple: buy out both of them.
It sounds a little scary and short sighted, but it would free up around $7 million in cap space. That’s enough to sign an impact top-six forward and bring back a depth forward as well. Simply eating those two contracts in a buyout does create a lot more space for Holland this offseason.
Imagine if they took that $7 million and signed Blake Coleman and Petr Mrazek with it. Wouldn’t those two players help the Oilers win way more games next season? The answer is obvious.
Now, it would also create some dead cap space down the road.
Buying out Koskinen saves them $3 million this season, but comes with a $1.5 million penalty the year after that. If they were to just hold onto him for another year they could bury him in the minors, save just over $1 million, and then they’d be out of the deal by next offseason.
So it basically comes down to whether or not Holland wants to have an extra $1.5 million this offseason, or an extra bit of money in the summer of 2022. That’s an interesting debate.
Then there’s James Neal. He had a rough year because of some COVID complications, but it’s pretty obvious that he’s not worth the $5.75 million cap hit that he carries. Buying him out would save the Oilers $3.9 million for the next two seasons, but would come with a cap penalty of $1.9 million for two years after that.
It would suck to have dead money on the books for four seasons, but it would also suck to routinely have a player making $5.75 million sitting in the press box. That is also kind of like dead money, just in a different way.
I’m not against buyouts as much as some others are. Especially in a flat cap era where there are quality free agents on the market that will likely have to take less than they would in normal times. It wouldn’t be a terrible idea to just buy out both Koskinen and Neal, but I do understand that it would sting down the road, so I could see the Oilers only opting to do it with one of them.
That means, to get rid of the other contract they might need to trade the player and potentially retain some money.
This has been talked about a lot, but the idea of retaining a chunk of James Neal’s cap-hit and trading him to the Seattle Kraken is very interesting. The Oilers could very easily put themselves in a situation where they don’t have a quality NHL player on their list for the Kraken to take (that is a whole different conversation that I will have with you another day).
At that point, it very well may become appealing for them to take a draft pick from the Oilers if Edmonton wants to offload James Neal at a lower cap hit.
The only way I could see the Oilers getting rid of Koskinen is if they overpay in a trade for another goaltender and that team agrees to take Koskinen’s deal off their hands. Seattle will have enough good, young goaltenders to choose from in the expansion draft. They won’t want Koskinen.
Just to throw a hypothetical at you, let’s say that the Oilers wanted to trade for Darcy Kuemper out of Arizona. They could throw in an extra draft pick and have Arizona take the last year of Koskinen’s contract with a certain amount of money retained. Arizona would have a second goalie to run with Adin Hill and they’d get an extra draft pick, which they need right now.
The third option is a hybrid of a buy-out and a trade. They could trade either Neal or Koskinen to another team, retain money, and have that new team buy out the player. This is much harder to coordinate.
A few years back the Colorado Avalanche took on Brooks Orpiks’ contract as a part of the Phillip Grubauer trade. The exact cost there is hard to determine since Grubauer was such a big part of the deal. The other example of this that I remember is back in 2019 when the Toronto Maple Leafs gave the Carolina Hurricanes a first-round pick in order for the Canes to buyout Patrick Marleau. Marleau’s cap hit at the time was $6.25 million. Neither of those situations involved the first team retaining any money though.
The Oilers wouldn’t have to give up a first-round pick to make this happen, especially if they eat a portion of the players’ cap hit, which neither Toronto nor Washington did in those two examples. How does it exactly work when a team retains money and then they get bought out? I asked PuckPedia to explain it:
“When a retained player is bought out, the buyout cap hit is based on the retained %. So if they traded him at 50% and then he’s bought out, the Oilers only cap hit would be 50% of the buyout, which would be $750K next year and $750K the year after (in the case of Mikko Koskinen). So depending on the cost to make the trade, retaining half and having the new team buy the player out gives half the buyout cap hit compared to the original team buying the player out”
After hearing the numbers, that could very well be done in the case of Mikko Koskinen. The Oilers could eat half, send a low draft pick to another team, have them buy out Koskinen, and only have $750k on their books for the next two seasons.
As for Neal, if they went that route, it would involve them having just around $1 million in dead space for four more seasons and the team they trade with would hold onto the rest. That’s also appetizing for the Oilers, but finding another team to take four years of dead money might cost you a decent draft pick.
The point I’m trying to make with this article is that before Ken Holland does any sort of heavy lifting in the offseason, he needs to know how much money he has to throw around and how many assets he has. That’s why it’s important to make a decision on both Koskinen and Neal.
They might not both need to be bought out, and it might require some creativity from the Oilers front office, but they should be getting out from both of these contracts this offseason. They have plenty of options to do so.
That is part one of my offseason plan. Part two will be available on the site soon!