Glad the weekend's here -- I've been meaning to do this all week...
Last month, I calculated what buyouts for Michael Nylander and Chris Clark would look like in the summers of 2009 and 2010.Here’s the same calculation for Jose Theodore:
Step 1: Theodore has one year left on his contract at 4.5 Million.
Step 2: The buyout price is 2/3 of that – 3 Million.
Step 3: The annualized buyout price is the same because there is only one year left.
Step 4: The average over twice the length of the contract is 1.5 Million.
Step 5: Subtract the Step 4 number from each year’s actual salary to determine the "Buyout Savings" – 3 Million in 09/10.
Step 6: For the remaining life of the contract, subtract the Step 5 number (3 Million) from the original average annual contract value (4.5 Million): 1.5 Million.
The Step 6 number (1.5 Million) is the cap hit for 09/10; the Step 4 number is the cap hit for 10/11 (1.5 Million). So the bottom line is that if the team buys Theodore out, the cap hit in 09/10 is 1.5 Million and the cap hit in 10/11 is 1.5 Million. If not, the cap hit in 09/10 is 4.5 Million.
As pointed out in another fanpost, 10/11 is a crucial year because Semin and Backstrom are each free agents in the summer of 2010 and because the salary cap is likely to drop. From a pure salary cap perspective, it wouldn’t be crazy to keep Theodore around as the backup in 09/10 just to keep his salary from having any effect on 10/11. But if it was my call, I’d buy him out and re-sign Brent Johnson.