The Cap Space Argument

I’m a little surprised at the favourable reaction of many Oilers fans to the Denis Grebeshkov trade. While I didn’t think it was a brutally one-sided deal, I do know that I wouldn’t have made it in Steve Tambellini’s shoes. Because the biggest argument in favour of the trade is the cap space issue, I thought I’d spend a little time on that today.

Despite Edmonton’s struggles with the salary cap this season, it’s actually not all that difficult for them to clear cap space, even if they aren’t able to trade Sheldon Souray or Lubomir Visnovsky – either of whom would give the Oilers room (to the tune of $5.4 and $5.6 million, respectively).

Up front, Fernando Pisani and Mike Comrie are replaceable for less than the combined $3.75 million they took up this season (side point: I almost called “this season” “last season,” which I assume is the mentality of most Oilers fans). With two exceptions (Sam Gagner and Gilbert Brule), the Oilers other free agents, both restricted and unrestricted, won’t be due for much in the way of pay increases either.

Let’s assume the very worst: Steve Tambellini can’t move any of the expensive but useful players, and he’s totally incapable of moving four guys making significant dollars: Patrick O’Sullivan, Steve Staios, Robert Nilsson and Ethan Moreau. How would the Oilers clear cap space?

One word: buyouts. The incredibly helpful capgeek.com has a buyout calculator which tells us what it would cost in terms of both dollars and cap hit to buy out these players.

Because of the age of O’Sullivan and Nilsson, it’s easier to buy them out than it is Steve Staios and Ethan Moreau. In fact, by spending a little over $1.5 million, Daryl Katz could nix both of those contracts. Instead of a nearly $5.0 million cap hit between the two of them, the Oilers would now have a total cap hit of around $0.8 million for the next two years, just like that.

Things are less rosy with Moreau and Staios, but given that at their current level of play they can be replaced with dirt cheap players they still deserve some consideration. For a total cash outlay of roughly $2.8 million, the Oilers could buyout those contracts. Instead of a combined $4.7 million cap hit between the two of them, the Oilers would have a $2.0 million cap hit next season, and a $1.4 million hit in 2011-12. Personally, I think a better move would simply be to dispatch Staios to the minors – the cash outlay is a little less ($2.7 million), the cap savings for next season would be the same, and there would be now pesky 2011-12 cap hit to worry about.

So let’s assume that Tambellini has been given the green light (as both Katz and Tambellini have indicated) to spend about $4.0 million, and he follows the course laid out above (buyout Nilsson, O’Sullivan, demote Staios, let Comrie and Pisani walk). That course of action would clear more than $10 million in cap room.

To make a long story short, I don’t think that clearing cap space is a huge issue for the Oilers. In the worst case scenario, the team can clear $10 million with minimal effort, and it goes without saying that with a few deals Tambellini can improve that significantly.