[Ed. Note: It seems strange to be introducing someone who has been an integral member of this community for so long, but here I am doing it anyway - please join me in welcoming the Rink's newest contributor, long-time commenter Fehr and Balanced. - JP]
It's no secret that George McPhee has had an incredibly successful off-season to date. Thus far he's assembled (on paper, at least) the best roster Bruce Boudreau has ever had to work with, and one of the best Capitals rosters ever, regardless of era. The most talented forward corps the franchise has ever had, hopefully bolstered by newfound checking depth that Caps fans have been used to relying on. Defense to rival the ‘80s. Goaltending to rival the ‘90s. What's not to like?
Oh, right, the salary cap.
Technically speaking, this array of talent is too expensive to take the ice. Of course, nobody is too concerned about it because everyone knows the solution is simple enough. The devil, as they say, is in the details - what to do with Tom Poti (who the team doesn't think is going to be able to play any time soon, if ever again)?
There are basically four potential solutions to the Tom Poti predicament, each with its own pros and cons. Let's take a look, after the jump.
How It Happens: If only life were so simple. Tom Poti calls it quits and goes on and lives happily ever after. The groin problem Poti has been dealing is serious enough that George McPhee has publicly said that Poti's career is on the line, so maybe Poti gets tired of the constant rehab and setback cycle. Maybe he just wants to hang out with his family and he's saved up enough money to retire comfortably without making another dollar.
Salary Cap Impact: The Caps are relieved of the $2,875,000 cap hit they would otherwise incur over each of the next two seasons.
Pros: The Caps take no cap hit and don't have to pay the player (and don't have to worry about him getting healthy and causing roster problems). This is the best possible solution from the team's perspective.
Cons: The team possibly loses a decent depth defenseman on a manageable contract if Poti can get healthy at some point during the life of his contract. Really, there's not much downside here at all.
Likelihood: Remote, to put it mildly - Poti has 5.75 million reasons not to retire, even if it does mean a permanent spot on LTIR (more on that in a bit). Note: this doesn't consider the possibility that Poti and/or the team has insured his contract and that he could potentially retire and still collect on his current deal.
Poti Gets Traded
How It Happens: Only a team that needs to take on money to get to the salary floor would think about acquiring Poti. There are at best a couple of teams that might fit the bill, but it's definitely worth pursuing the possibility from the team's perspective. But the major impediment to the trade is the real salary behind Poti's cap hit. The owners near the floor are near the floor for a reason. If an owner needs to throw money at players to get to the floor, he may as well overpay guys that are going to take the ice and compete, right Dale Tallon? Maybe GMGM sells Garth Snow on the idea that Poti won't take any ice from Travis Hamonic or any of the other young D, but something tells me the Isles aren't going to be in the market for another broken down BU alumni. Also, while it's unlikely to be an issue given how well publicized Poti's injury is, teams don't take too kindly to being sold damaged goods. The potential trade partner would absolutely have to know Poti was unlikely to play and carry out the trade simply to add salary cap.
Salary Cap Impact: The Caps are relieved of any cap hit for Poti once he's moved.
Pros: Poti's contract is gone for good and the full cap space is freed up (same as if he retired).
Cons: The Caps would probably have to move out something of value to make the trade happen - a light dowry of sorts. It's unlikely to be much, but if other GMs perceive GMGM to be over a barrel, they may try to drive a hard bargain and end up negating any potential deal. Without many suitors, GMGM is not going to have leverage to demand that another team accept future considerations or a 7th round pick.
Poti Gets Placed On Long-Term Injured Reserve (LTIR)
How It Happens: Poti is unable to play come the fall and gets placed on LTIR at the beginning of next season.
Salary Cap Impact: LTIR allows the Caps to exceed the salary cap by Poti's salary cap hit of $2.875 million. The team is already into that by about 890K, so stashing Poti on LTIR gets the Caps under the cap by roughly $1.9 million, cap space that could be used to add to the roster. Some of that space will be used to deal with inevitable call-ups and such, but at the deadline the Caps still should have enough space to add at least $1.5 million in cap dollars.
Pros: The Caps get under the cap, and there is some certainty to the designation - GMGM knows what the injury looks like, won't be banking on Poti contributing, and we won't see any "day to day" fantasy hockey scenarios for all you Tom Poti owners.
Cons: The big negative here is that the team cannot bank any salary cap space while they are using LTIR exemption to exceed the cap. As we'll see below, this is a potentially significant problem.
Another consideration with LTIR is that, if used, it's unlikely the Caps will be able to afford to take Poti off of LTIR without moving out salary or having another player go on to LTIR - it basically means that Poti is unavailable for the whole year and then would be stepping in, if ever, in the playoffs. That's not a recipe for success. Further, if Poti gets healthy during the season but the Caps refuse to take him off of LTIR, he could file a grievance against the team. It's unclear whether the Caps have to take Poti off the LTIR when he's healthy, but a headache is predictable. Nothing in the CBA specifically demands that teams take players off of LTIR as soon as they heal, and other players have previously been buried on LTIR without their full consent. However, no player has ever really cried foul, petitioned the NHLPA's assistance, or made any attempt to force their team's hand (or, at least such dissent hasn't gone public). If Poti wants to file a grievance against the Caps for unjustly keeping him on LTIR, he'll be able to do it (if not as a violation of LTIR requirements, then as a salary cap circumvention). One or the other will catch some attention if Poti wants to make it an issue.
Poti Gets Waived and Potentially Assigned to Hershey
How It Happens: Have a contract you regret? Why deal with the consequences yourself when you can let your AHL GM deal with them in the form of some NHL veteran presence? It's all the rage, everybody's doing it. And, from a cap perspective, it's easy to understand why. The salary cap makes things tight and it makes every dollar spent on a player more important. It's hard to compete for a Cup with lots of unproductive cap space, so most teams find a way to not have unproductive cap space. Frequently, that means waivers and assignment - teams waive a player and then wait to see if any other team wants them. If the player is claimed, problem solved. If not, the payer can be assigned or loaned to an AHL or a European club. That's how GMGM got Michael Nylander off the cap, and Tom Poti doesn't have a No Movement clause to wield.
In Poti's case, he would have to be healthy (or "healthy") before being placed on waivers. If he cleared (which he would) the Caps would assign him to Hershey, though who knows if he'd be willing to report - he'd be collecting his NHL salary whether he did or not.
Salary Cap Impact: The Caps take no cap hit.
Pros: The main difference between recouping cap space via waivers versus LTIR is that the waivers method allows a team to "bank" cap space, while LTIR does not - when a team is using LTIR, that team is deemed to be over the cap every day. If a team is below the salary cap, however, they bank the space they saved as the cap is calculated every day. The savings seem modest, but have a major impact if saved up for the trade deadline.
For example, assuming a season that is 185 days long and that the trade deadline comes 40 days before the season ends, a team spending $1 million dollars below the cap each day for the first 145 days of the season would be able to determine their available cap space at the deadline by the following algebra:
40/185 = 1 million/X.
X = 1 Million/.22
X = 4.55 Million dollars of cap room.
Suddenly that team that was just $1 million from the ceiling for most of the year can afford to rent a Brooks Laich for the rest of the season and the playoffs - if a team waives a player and frees up all the cap space, thus spending the season under the cap as opposed to over the cap on LTIR, they'll be able to acquire much more salary at the deadline than if they spent the year on LTIR.
If the Capitals are able to clear Poti from the salary cap via waivers, trade, or retirement, they could carry 14 forwards all year and still have more than 1 million dollars in cap space. If any of those scenarios play out, the Capitals could take on about $4.5 million salary cap dollars at the deadline, even using conservative roster estimates (14 forwards all year) and acknowledging the inevitable call ups; more aggressive salary cap management by GMGM could yield upwards of $6-7 million salary cap dollars available at the deadline. If Poti is on LTIR, the Caps can take up to $2.875 million salary cap dollars, less whatever amount they are already using at the deadline. The Caps would likely still be into Poti's LTIR space by about $800-900K, so the team would have about $1.9 million salary cap dollars to add at the deadline.
In sum, waivers frees up the cap space currently, preserves cap space at the deadline, keeps Poti in the organization in case he turns the corner in his recovery, and is a move that can be made unilaterally, without any outside help. Where's the downside?
Cons: Teams can't waive injured players, so for this option to happen, Poti would have to be healthy. If the Caps try to waive him and he doesn't want to go, he only has to file a grievance claiming that he hasn't healed yet. If the League agrees, there's nothing the Caps can do about it. No doubt being demoted like this would hurt a player's ego, so there's no guarantee Poti would cooperate. If, however, Poti is willing to go into paid retirement, or willing to prove that he can stay healthy before taking up an NHL roster spot or salary cap dollars, then the Caps could waive him and have the cap space back. Like LTIR, a demotion means he's most likely gone for the season - bringing him back this season would require re-entry waivers, and that carries the risk of paying half of his cap hit without getting his services if he's claimed by another team.
Ultimately GMGM is going to be able to put a team on the ice without being forced to ship out anymore salary. The cap space currently devoted to Poti will be freed up one way or another, it just remains to be seen what the ramifications of the cleanup will be. People will undoubtedly have their individual preferences over the course GMGM chooses to pursue. Some will see the potential to acquire a high salary at the trade deadline and day dream of second-line centers. Others will hold out hope that Poti can regain his health and contribute to the team down the stretch or in the playoffs. The one thing we can all agree on, and take comfort in, is the fact that the Caps won't have to dismantle such a great looking roster because of salary cap concerns.