Guide to the offseason

It’s going to be a long offseason: shorter than it’s been for many years, but still longer than we’d like.  We’re all going to speculate wildly about what the team should do.  So here is, I hope, a guide to not looking foolish in our speculations. 

First, it’s important to get all the key information.  JP keeps Caps salary info in the chart that’s available off the left-hand sidebar to the Rink.  Similar information is available for all the NHL teams at nhlnumbers.com.  JP also keeps a copy of the CBA available on the left hand sidebar.

The rest of this post will attempt to lay out the decisions faced by General Manager George McPhee this offseason.  Each player’s approximate salary cap hit for 09/10 is in parentheses after his name.  I’m trying to keep the text of this guide as neutral as possible, without expressing my opinions about what McPhee ought to do.

If anyone spots an error, please let me know and I’ll correct it.  Math is not always my strongest suit…

Things McPhee Can’t Control -- The Cap

The conventional wisdom is that the 09/10 Cap won’t rise or drop much from last year’s 56.7 Million dollars.  The theory is that between season ticket renewals and TV deals, most of the league’s revenues were locked in before the economy really went to hell.  The same won’t be true for 10/11, though, when the conventional wisdom is that the Cap will drop.  On top of that, several teams are in precarious financial positions, so it seems likely that fewer teams will hover near the very top of the cap next year.  So salaries in general are unlikely to rise this year, but it’s still important for a careful GM to be conscious of long term deals because there may be less financial flexibility in the future than there is right now.

Players That Are Locked In

McPhee has no offseason decisions to make regarding Ovechkin (9.53), Green (5.25), Poti (3.5), Laich (2.07), Erskine (1.25), Bradley (1.0), or Varlamov (0.82).  All of these players are locked into long-term deals.  That’s three forwards, three defensemen and a goalie who together cost $ 23.42 Million – about half the cap.

Players Eligible For Extensions

As mentioned above, the salary cap has a good chance of dropping for the 10/11 season.  That’s frightening because Backstrom (2.4) and Semin (5) are each signed through next season, but not further.  Both players are RFAs in 10/11.  The good news is that the Caps will still own their rights, but the bad news is that they have to get PAID.  Tom Fleischmann (0.73) is in the same situation.  And Dave Steckel (0.73)  is signed through next season, after which he becomes a UFA.

McPhee could sign any of these players to an extension starting July 1.  There’s no reason for him to rush – it may be wiser for him to watch as the market develops and try to do something at the end of the offseason.  If I remember correctly, several players during McPhee’s run have gotten extensions in September or thereabouts of the year before they were going to hit the market.  And regardless of what happens, none of this affects the 09/10 salary cap because any extensions would be just that – they wouldn’t affect next year’s salary, just the years afterwards.  I’m pretty sure the CBA doesn’t allow you to renegotiate current contracts.  The years you add afterwards are considered like a new separate contract.  That's why Ovechkin's historic extension last year didn't bomb the salary cap during the season.

So far that’s a total of seven forwards, three defensemen and a goalie locked in for $32.28 Million, and no decisions have been made yet.

Players Who Could Be Bought Out

Michael Nylander (4.88) is going to make a hell of a lot of money next year.  So is Jose Theodore (4.5), Chris Clark (2.63), and Brian Pothier (2.5).  These four aging players combine for $ 14.42 Million.  Nylander and Clark each have two years left; Theodore and Pothier each have one year left.  Nylander has a no movement clause for next year.  There are a substantial number of Caps fans who would prefer it if one or more of these players didn’t return.

I’ve previously calculated the buyout costs for Nylander, Clark and Theodore.  Here are the team’s liabilities with various buyout situations:

Team buys out Nylander this offseason:

09/10 cap hit: 0.79 Million

10/11 cap hit: 3.29 Million (!!)

11/12 cap hit: 1.42 Million

12/13 cap hit: 1.42 Million

Team keeps Nylander through 09/10, buys him out the next year:

09/10 cap hit: 4.88 Million

10/11 cap hit: 1.0 Million

11/12 cap hit: 1.0 Million

Based on these numbers, I think the team would be crazy to buy Nylander out now.  And apparently McPhee agrees.

Team buys out Clark this offseason:

09/10 cap hit: 0.84 Million

10/11 cap hit: 0.99 Million

11/12 cap hit: 0.86 Million

12/13 cap hit: 0.86 Million

Team keeps Clark through 09/10, buys him out the next year:

09/10 cap hit: 2.63 Million

10/11 cap hit: 0.83 Million

11/12 cap hit: 0.83 Million

Team buys Theodore out:

09/10 cap hit: 1.5 Million

10/11 cap hit: 1.5 Million

Team buys Pothier out:

09/10 cap hit: 0.83 Million

10/11 cap hit: 0.83 Million

Setting aside the question of who is playing well enough to earn their salary and who isn’t, the problem with all of these buyout plans is the effect on 10/11 when the cap may drop and when the Semin and Backstrom contracts come up.  Theo and Pothier are scheduled to come off the books next year.  I don’t predict that McPhee will buy them out now and create a new salary cap liability for 10/11 for a player who won’t even be playing then.  And the financial impact of both Nylander and Clark being bought out is much easier to swallow if the buyout happens next year rather than this year.

And there are other options.  Nylander has a no movement clause, and unless he waives it they’re probably stuck with him.  But the other players could be moved.  Or demoted to Hershey.  Or put on waivers.  The financial implications of any of these could be complicated, but they won’t extend past next year.

Assuming all four of these players return, we’re at nine forwards, four defensemen, two goalies, and a combined cap hit of $46.43 Million.  If you want one spare part for each position, that’s ten million left to add four forwards and three defensemen…

Restricted Free Agents

The following players are restricted free agents (08/09 salaries in parens):  Shaone Morrisonn (1.98), Milan Jurcina (0.88), Jeff Schultz (0.75), Eric Fehr (0.74), Boyd Gordon (0.73).  Everyone but Schultz is eligible for arbitration.  The annual salary progressions of Morrisonn, Bradley and Laich on this website give a sense for how salaries increase over time.  

Edit:  I meant to also link to this great post by Vogel.

Here are my guesses:

Morrisonn:  3.0 M

Jurcina: 1.5 M

Fehr: 0.9 M

Gordon: 0.9 M

Schultz: 0.9 M

That’s now eleven forwards, seven defensemen, and two goalies, and we’re at 53.91 Million.  

Hershey Players

Karl Alzner (1.68) and John Carlson ( 0.88) are very exciting players.  They may very well be NHL ready right now.  With all respect to Beagle, Collins, Sloan, and Osala, the only other two players I see in Hershey as ready to try a permanent jump to the NHL right now are Keith Aucoin (0.49) and Chris Bourque.  Bourque is an RFA, but I don’t see him signing for much more than the 0.63 he earned in 08/09. 

The first thing you notice when you look at these salaries is that Alzner is expensive.  It really hurt him this year, as the team’s salary cap problems kept him from playing any more than he did.  

The next thing you notice is that the team’s two most NHL-ready prospects play a position that is already full with players that the team owns the rights to.  There are no UFA departures from the Caps’ defense corps this offseason.  If Alzner or Carlson are going to make the team, then someone is going to have to be moved. 

If the team takes on two forwards, say Aucoin and Bourque, then it’s at the full complement (with one spare at each position) of thirteen forwards, seven defensemen, and two goalies, having committed to about $55 Million.  That’s just 1.7 million below the cap.

Free Agents And Other Acquisitions

OK, so far we’ve shown that the Caps can make a full team out of just the guys who are currently under contract.  But they don’t hand you a Stanley Cup for just filling out a roster.  The team has some important needs that need to be addressed.  The most common list is (1) second line center, (2) crease-clearing defenseman, and (3) top-six right wing.  The Caps can’t upgrade those positions without taking on more salary, and $1.7 Million isn’t going to go very far with a shopping list like that.  A team may exceed the salary cap by 10% in the offseason, but if the Caps want to improve, they’re going to have to find a way to cut costs by the time next season starts.

A couple of cost-cutting measures come to mind.  The team could trade Morrisonn or let him walk.  He may or may not be worth 3 Million to someone out there, but Karl Alzner (1.68) is available to replace him.  I’m not sure many folks think Morrisonn is worth nearly twice as much as Alzner.  This move would open up an extra 1.3 Million.

The team could also hand the keys to Varlamov and get rid of Jose Theodore.  Chicago’s story this year with Huet and Khabibulin suggests that it will be hard to trade Theo, but Theo could be demoted to Hershey and come off the books that way.  This would require Leonsis to be willing to exceed the salary cap in terms of actual payments.  I expect Brent Johnson would be willing to come back if offered his 08/09 salary (0.83), and he might be a more appropriate and cost-effective second goaltender for the team to carry than Theo.  Replace Theo with Johnson and you save a healthy 3.67 Million.  To be clear, I’m not saying Johnson is better than Theo.  But I am saying that the team may be better with Johnson and the player they acquire with the 3.67 Million than with Theo.

It would of course be fantastic to find a way to lose Nylander’s salary as well, but that may be unlikely given the NMC.  Still, if the team can open up about $5 Million by replacing Morrisonn with Alzner and Theo with Johnson, then the team can probably afford to fill one or two of the holes that have been identified. 

Honestly, there aren't many teams in the league in a better situation than the Caps.  The team has the rights to all four of the Young Guns for a good long time to come.  If Varlamov can match his potential and the pipeline keeps sending up players like Alzner and Carlson, then the team's young core should be able to play together and grow for years.