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Looking At Vegas and Washington’s Newly Found Cap Space

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In the past few days, two teams in somewhat similar positions, perennial contenders who need to improve to compete but with limited funds, found some additional salary cap space, though for different and ultimately unhelpful reasons. For the Vegas Golden Knights, they traded away veteran forward Evgenii Dadonov in exchange for defenseman Shea Weber, who is injured and unlikely to play again in the NHL. The Washington Capitals lost center Nicklas Backstrom presumably to LTIR after he had hip resurfacing surgery on Friday, a procedure that has a lengthy recovery time, if not ending his career outright. With what appears to be new cap space they may not have been fully expecting, both teams have some flexibility to make the moves they need to this summer, retaining players and perhaps replacing the talent they lost.

Vegas is currently just over $2.6MM above the salary cap ceiling, but once Weber’s LTIR is factored in, they will have exactly $5.2MM in cap space. Because the cap space is created using LTIR, they will not accrue any beyond that. With key RFAs including Brett Howden, Nicolas Hague, Nicolas Roy, and Keegan Kolesar, as well as UFA and original Golden Knight Reilly Smith to re-sign, it’s hard to imagine Vegas will be able to add any additional talent, and may even be in a difficult position just bringing back those five alone without making an additional move. Still, the created space does give Vegas a chance to not be handcuffed and be able to have some leverage in any additional cap trades they might look to make. A primary issue they will have to deal with is the cap space came at the expense of Dadonov, a talented veteran who recorded 43 points in 78 games, not a magical season but production that will be missed, especially if Vegas can’t find a way to at least keep Smith in the fold too.

Heading over to the east coast, Washington already stood in a much more comfortable spot than Vegas, with just a touch under $9MM in available cap space going into this offseason. With Backstrom’s injury and likely trip to LTIR, Washington will have just under $19.2MM in cap space with which to work. Not all of that can be spent on additions to the roster, but after giving contracts to pending free agents, including Marcus Johansson, Johan Larsson, and Justin Schultz on the UFA side and their goaltending tandem of Vitek Vanecek and Ilya Samsonov on the RFA side, the Capitals should still have a few million to work with. The issue in this is, after another first round exit in the playoffs, the Capitals were already in need of a few upgrades to their roster, and the departure of a superstar like Backstrom only adds to that need. Not only does Washington have to add, but they have to replace the production of one of the all-time greats in their organization. The team does have two options to add production up the middle, including young forward Connor McMichael who had 18 points in 68 games this season in the NHL and could be poised for a breakout 2022-23, and top prospect Hendrix Lapierre, who made his NHL debut this season before heading back for another strong season in the QMJHL.

The recent changes seem to mean more for Washington, and the league, than it does for Vegas, though it does buy Vegas some time, and power, in their negotiations, especially those focused on creating more cap space. To the Capitals, it provides much more flexibility and creates another interesting buyer on the trade and free agency markets, and an intriguing opportunity for those interested players who could have an opportunity to play with greats like Alex Ovechkin, John Carlson, and Evgeny Kuznetsov.

NHL Officially Announces Salary Cap, Salary Floor For 2022-23 Season

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Two effectively retired players have been traded so far this offseason, and the reason for those deals has been simple: the salary cap. While the importance of effectively managing the salary cap is ever increasing, the cap itself is not. The NHL and NHLPA officially announced today that the league’s payroll upper limit (salary cap) for next season would be $82.5MM. The league also announced that the lower limit, or salary floor, would be set at $61MM.

The announcement confirms what many believed, that the salary cap would rise only $1MM from this past season’s number, a small increase due to the financial implications of the COVID-19 pandemic on the league. Because the NHL and NHLPA have collectively bargained a 50-50 split in terms of the league’s hockey-related revenue, a portion of player salaries are held in escrow and potentially surrendered to the league in order to ensure the integrity of the 50-50 split. The NHL lost a significant amount of money during the pandemic, in large part due to the fact that they needed to play games in arenas without fans or with significantly reduced capacity crowds. While the NHL’s clubs lost significant sums due to that lost revenue, the players’ salaries were unchanged, meaning the players have a “debt” that they owe to the league in order to ensure a proper 50-50 split, and that “debt” is paid through the escrow system. So, until the players fully “pay off” the “debt” that they owe as a result of the pandemic, the cap will rise only a minimal amount as we see for next season.

For some teams, this “flat-cap” reality has created significant problems. Many teams gave out significant, long-term contracts likely with the idea that those contracts would age better as the salary cap rose. That hasn’t happened yet, though, which is part of why we’ve seen such increased attention to how teams manage the salary cap. For other teams, the salary cap staying flat is largely irrelevant to their own payroll management. Teams like the Buffalo Sabres are actually below the cap floor, meaning their main concern is adding enough salary to stay above the league’s minimum team payroll. The Sabres and other teams now have certainty on the league’s cap floor, and it’s possible that we see more trades like the recent Ben Bishop deal as rebuilding clubs look to reach the cap floor with as much efficiency and as little real cash paid as possible.

Business Notes: Salary Cap, 2022-23 Schedule, LTIR

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NHL commissioner Gary Bettman spoke today from Ball Arena in Denver prior to Game 1 of the 2022 Stanley Cup Final, giving a pseudo-state of the league address as the offseason begins to commence. One of the most striking and important notes from his presser was about the future of the salary cap, including that league revenues hit a record $5.2 billion this year. Drawing on that and the projected revenue increase from that point, Bettman notes that normal salary cap growth should resume within two to three seasons, a much shorter timeline than the five-to-six-year plan rumored early in the season. It’s wonderful news for teams and players, as contending teams will finally begin to have more flexibility when the offseason hits, and players can begin to capitalize on their earning potential in line with inflation.

  • We have a start date for the 2022-23 NHL campaign: Wednesday, October 11. It’s finally in line with the normal routine the NHL had been acclimated to over the past years prior to COVID, and we’re expected to see a normal schedule for the first time since 2018-19. The 2022-23 schedule will be released by the league early next month.
  • Contrary to previous rumors, deputy commissioner Bill Daly doesn’t anticipate the topic of changing the NHL’s long-term injury reserve rules to come up at the next Board of Governors meeting. Noise had been made in past months about some general managers growing unsatisfied with the ability for teams to greatly exceed the normal playing roster salary cap during the playoffs. However, Daly said during the presser that he believed this year demonstrated that teams couldn’t successfully use LTIR as an intentional loophole and still have a successful enough regular season to make the playoffs.

Colorado Avalanche Sign Lukas Sedlak

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The Colorado Avalanche announced the signing of forward Lukas Sedlak to a one-year contract for 2022-23. The contract brings Sedlak back to the NHL after three years spent in the KHL. No financial terms have been disclosed as of yet.

Sedlak was actually signed through next season with Traktor Chelyabinsk, but the team terminated his contract early last month, opening the door for Sedlak to return. HC Dynamo Pardubice in the Czech Extraliga had snapped up Sedlak to bring him back to his home country just a few days after his contract was terminated, but Sedlak has apparently opted to take advantage of the assumed NHL out-clause in his Czech contract to return for a shot at an NHL role.

A solid 13th forward for three seasons with the Columbus Blue Jackets, Colorado will be just the second NHL organization Sedlak’s been affiliated with. Sedlak was Columbus’s property ever since the team drafted him in 2011 all the way until he left the team as a free agent in 2019. He’s been one of the top scorers in the KHL ever since, putting up 43 points in 49 games with Chelyabinsk in 2021-22.

Cheap, affordable veteran depth will be crucial for the Avalanche as the team’s Cup window looks to open for years to come. They’ll inevitably push closer and closer to the salary cap, requiring the usage of players like Sedlak to be able to step into the lineup occasionally and perform. While nothing more than a depth role should be expected, he’s shown the ability in the past to be a reliable NHL forward and he returns as a more experienced player.

Looking At The Boston Bruins Salary Cap Crunch

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In a rundown of hockey news today, Matt Porter of the Boston Globe addressed, amongst other things, the Boston Bruins impending salary cap crunch, and speculated on what the organization could do to improve its situation (link). In sum, Porter says that even with Brad Marchand slated to miss time after surgery on both of his hips, presumably landing him on LTIR to start the season, and with Patrice Bergeron either not returning or perhaps taking a steep discount, Boston could still find itself up against the salary cap next season, not even considering any moves the team needs to make to improve.

As of right now, the Bruins are projected to have just $2.84MM in salary cap space next season, which does not factor in making any moves, or creating any additional space, like putting Marchand on LTIR. Though not over the cap, if Boston wants to improve or even return the same quality team to the ice, they will need to spend to do so, but would have to get creative with how they shed salary. One suggestion Porter makes is to buy out the contract of forward Nick Foligno, who has one-year at $3.8MM left on his contract. Doing so would reduce the cap hit to just $1.933MM next season and $930K after. Foligno has been a reliable point producer and excellent leader his entire career, however his production fell off sharply this season with Boston, tallying a mere two goals and 11 assists in 64 games.

Still a tremendous veteran presence for any team, his $3.8MM cap hit is tough to justify on a team as close to the ceiling as Boston. If the organization wants to eliminate his entire cap hit, they will likely find a market for which to trade him, however the veteran will have a 16-team no-trade list and dealing him would likely require the Bruins to send draft pick or prospect compensation with him. It might seem unlikely that Foligno would accept a trade from a perennial contender to, expectedly, a rebuilding team, however a team in the market to absorb Foligno’s salary would likely be able to give him the ice-time and role he might prefer, as well as a chance to be dealt to a competitive team at the trade deadline anyways.

Another suggestion from Porter would be to make a practical trade of a regular, albeit replaceable player, such as forward Craig Smith or defensemen Matt Grzelcyk or Mike Reilly. Smith, who has one more year at $3.1MM, has been a solid contributor for Boston since coming over from the Nashville Predators in free agency prior to the 2020-21 season, putting up a solid 16 goals and 20 assists in 74 games this season. With his solid play and reasonable cap hit, Boston should be able to find a partner in a Smith trade and even receive an asset in return. The Bruins could then replace Smith in-house with young options like Fabian Lysell, Oskar Steen, or Jack Studnicka, as Porter suggests.

As good as Reilly and Grzelcyk have been for the Bruins, Porter adds that they are very similar players, thus making one potentially expendable in the right situation. Both players have two more years remaining on their contracts, Reilly at a cap hit of $3MM and Grzelcyk at just under $3.69MM. In addition to having very similar styles of play, the two have also had remarkably similar production, both tallying 44 points over their previous two seasons, Grzelcyk doing so in 110 games, Reilly in 125. On the left side, the team does also have Derek Forbort under contract at $3MM for the next season, though he is not as remarkably similar to Grzelcyk and Reilly as those two are to one another. Trading any of the three would also not pose a hazard to Boston’s depth, as they also have the recently-acquired-and-extended Hampus Lindholm and 25-year-old Jakub Zboril, who is still awaiting his first job as an NHL-regular.

Finally, a seemingly obvious solution for Boston would be to trade forward Jake DeBrusk, who owns a $4MM cap hit through 2023-24, and notably asked for a trade earlier this season (link). After requesting the trade, DeBrusk continued to play hard, and well, for Boston, ultimately finishing the season with 25 goals and 17 assists in 77 games. For his career, DeBrusk has continually produced similar numbers outside of a poor, outlier 2020-21 season and at age-26 for most of next season, his contract represents solid value for whatever team has him. Trading DeBrusk might seem like a given, but if the winger possibly changed his mind or is willing to play out the remainder of his contract, keeping him may be a prudent decision for Boston considering his value. Though DeBrusk has the highest cap hit of any player discussed, ultimately when trying to build a competitive team under the salary cap, the salary cap hit is less important than the overall value the team is receiving on the deal.

Tyler Bozak’s Latest Bonus Pushes Blues’ Overage Penalty Even Further

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The St. Louis Blues are happy to be advancing to the second round of the playoffs, that much is certain. However, their series win over the Minnesota Wild is not without complications. Veteran center Tyler Bozak earned a $100K bonus with the Blues advancing, CapFriendly reports, which for many teams would not be an issue. However, St. Louis operated so close to the salary cap’s upper limit this season that they had no cushion for performances bonuses they had promised to Bozak and were already in the red. In fact, even before Bozak’s latest bonus was earned the Blues held the third-highest bonus overage penalty for 2022-23 at $1MM, awarded to Bozak for playing in 41+ games this season.

And they’re not out of the woods yet. Again, St. Louis would be nothing but ecstatic if they were to upset the Colorado Avalanche and earn a berth in the Western Conference Final. However, another series win would add an additional $150K bonus to Bozak’s pay check. This would bring the Blues’ total overage penalty to a league-high $1.25MM.

Bozak’s contract, signed late in the offseason, was the Blues’ attempt to fit a serviceable player under the salary cap. As a 35+ player, Bozak was eligible for performance bonuses and was willing to sign for the minimum $750K base salary, all that would be counted against the cap this season, knowing that another $1.25MM could be on the way in bonuses. The Blues were well aware of the implications, but did themselves few favors by not finding other ways to accumulate cap space this season to leave space to absorb those bonus dollars.

Now, St. Louis heads into an offseason in which they had very little cap flexibility as is and will have to manage an additional $1.1-1.25 deficit to their allowable spending. The Blues have over $70MM committed to 15 one-way contracts in 2022-23, leaving just $12.375MM to spread among the additional eight players needed to build a full roster. Except, that value is without taking the bonus overage into account, bringing their real cap flexibility down to $11.125-11.275MM. Two players the team would desperately like to bring back are veteran forward David Perron, who led the team in scoring last season, and breakout goaltender Ville Husso, who won the starting job for much of this season with considerably better play than starter Jordan Binnington. Without making considerable changes elsewhere on the roster, it doesn’t seem possible for both to return and maybe not either.

Snapshots: Scheifele, Sharks, Kuzmenko

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Despite some ominous comments earlier in the week, it turns out that Winnipeg Jets star Mark Scheifele did not request a trade in his exit interview with GM Kevin Cheveldayoff, reports Sportsnet’s Elliotte Friedman. Schiefele had expressed concern over the direction of the team after the Jets missed the playoffs this season, which raised some eyebrows in the media and across the league. Scheifele is signed through the next two seasons, so if he was unhappy enough with the situation, he would have had to request a trade, which likely would have occurred during his exit interview this week. Instead, the situation remains status quo in Winnipeg, at least for now. If the Jets, who have a lot of money tied up in long-term contracts, cannot find a way to improve the roster within their salary cap restrictions early this offseason, Scheifele’s position could change. The 29-year-old center has the ability and the contract to draw immense interest if he does hit the trade block this summer.

  • Friedman notes that another team who could be in the star trading business this offseason are the San Jose Sharks. The Sharks reportedly held preliminary trade discussions with multiple teams this season regarding Erik Karlsson, and those talks could continue over the summer. The Sharks need to first name a new general manager, for which a search is ongoing, but the expectation is that whoever the team hires will be directed to retool rather than rebuild. In order to get more competitive sooner rather than later, the Sharks need to add more high-end depth to their lineup and need more cap space to do so. Moving all or even part of Karlsson’s five remaining years at $11.5MM would help immensely and the trade return wouldn’t hurt either. However, is it realistic to expect the Sharks to find a team both willing and able to add Karlsson? Friedman suggests that Brent Burns, who has three years remaining at $8MM, might be easier to move and would still accomplish the task of redistributing a mass amount of cap space from the right side of the blue line to be used elsewhere in the lineup. The Sharks are also expected to evaluate their options with Marc-Edouard Vlasic this offseason, whose remaining four years at $7MM could prove impossible to move but could be bought out instead.
  • While the Jets and the Sharks will be looking for outside-the-box ways to improve this summer, neither team appears to be in the race for KHL free agent Andrei Kuzmenko. Friedman lists the Carolina Hurricanes, Edmonton Oilers, Nashville Predators, Vancouver Canucks, and Vegas Golden Knights as the finalists for the Russian winger’s services. Kuzmenko, 26, initially drew interest from at least 20 NHL teams, but now that his KHL contract has expired as of May 1 and he has begun actual negotiations, the list has been trimmed considerably. Kuzmenko is coming off of a career year in the KHL, recording 20 goals and 53 points in 45 games for SKA St. Petersburg, plus another 14 points in 16 playoff games. While he would be brand new to the NHL and his international experience is somewhat limited as well, Kuzmenko could be an affordable impact forward right away next season.

Edmonton Oilers Facing Salary Cap Overage

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With the conclusion of the regular season, we can now begin to see the final numbers on performance bonuses in player contracts from the 2021-22 season. Two of these bonus figures will end up posing a small issue for the Edmonton Oilers, who owe $896K in performance bonuses to Evan Bouchard and Ryan McLeod (link). Bouchard, who just finished the second year of his three-year entry-level contract, earned $850K in performance bonuses this year for goals, assists, points, and points-per-game. McLeod, who is in the final year of his entry-level contract, earned $46K out of a maximum $57.5K games played bonus. Altogether, Edmonton owes an additional $896K, which counts against the salary cap.

Because the Oilers finished over the salary cap by using LTIR, the entire $896K will now count against next season’s salary cap for Edmonton. While this number may not seem like much at all, the NHL is currently in a flat salary cap period, and therefore every dollar counts. With the salary cap for the 2022-23 season at $82.5MM, Edmonton has already committed just over $70.2MM in salary for next season, and just under $4.3MM of it belongs to James Neal, Andrej Sekera, and Milan Lucic – none of whom play for the team any longer.

The $12MM Edmonton has in remaining cap space may also seem like a comfortable margin, but factoring in their six UFAs, including defensemen Kris Russell and Brett Kulak, who have become key pieces that could each earn a raise next season over their $1.25MM and $925K cap hits respectively, and forward Evander Kane who has rebounded nicely since signing with the club in January, their situation becomes a bit more tight. The Oilers also have three pending RFAs in Jesse Puljujarvi, Kailer Yamamoto, and McLeod, each likely due at least a modest raise (the two former each made $1.175MM this season).

Edmonton is not exactly in a dire cap situation this offseason, having their core, including two of the best players of their generation, signed long-term for the most part. However, their situation, especially in a flat-cap, is an example of how even the most seemingly harmless of concerns, like an $896K bonus overage, can have a ripple effect for the organization and its offseason planning.

Canadiens To Face Sizable Bonus Overage Penalty

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It was a tough year for the Canadiens, to put it lightly.  After reaching the Stanley Cup Final last season, they finished dead last in the standings this season and have the highest cap payroll in the NHL with Shea Weber being on LTIR for the entire year and Carey Price for most of it.  The end result was zero banked cap space during the season.

That means that any bonuses earned during the course of the 2021-22 season will have to be charged against their spending limit for the 2022-23 campaign.  As CapFriendly points out (Twitter link), that is a fairly significant amount as it totals $1.1325MM, broken down as follows:

Nick Suzuki: $537.5K
Cole Caufield: $300K
Alexander Romanov: $212.5K
Jordan Harris: $82.5K

Montreal already had over $81.5MM in commitments for next season (per CapFriendly) before even factoring in this bonus overage.  As a result, they are effectively over the cap for next year already before factoring in Weber’s expected return to LTIR while the uncertainty surrounding Price’s future will cloud things as well.

The list of free agents for the Canadiens isn’t overly long with many of their prominent rentals being moved at the deadline.  Romanov and Rem Pitlick highlight the pending restricted free agents while Chris Wideman and Mathieu Perreault are among their unrestricted free agents.  Romanov will be eyeing a sizable raise from his $894K entry-level cap hit while Pitlick, a midseason waiver claim, ended his season with 37 points in 66 games, putting him in line for a decent increase in his first trip through arbitration eligibility.  The good news is that re-signing their players shouldn’t be too costly but they may need to make moves to free up space for those deals depending on Price’s situation.

With the Canadiens squarely in a rebuild, GM Kent Hughes was already going to be looking to clear out some veterans.  But with this penalty basically putting them over the cap for next season already, the need to clear some contracts out of necessity will certainly increase.

PHF Announces Reagan Carey As Next Commissioner

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The PHF will have a new commissioner moving forward, as Reagan Carey has been introduced as the replacement for the outgoing Tyler Tumminia. Carey will take over the position full-time on May 10. Tobin Kelly, who chaired the search committee, released the following statement:

The search committee had the opportunity to speak with many exceptional candidates who were considered for the role of PHF Commissioner over the course of this process. What stands out about Reagan Carey is not only her incredible depth of experience in the world of women’s hockey but the collaborative approach she brings to the position. In all of our many conversations, Reagan’s commitment to communication and her values that advocate for what is right and put players first, make her the perfect leader for the next phase of growth in the PHF. We are all excited about welcoming Reagan as she takes the lead in moving the PHF forward.

Carey, 43, has a long career in professional and amateur sports, including nearly a decade with USA Hockey as the general manager of the women’s program. She won gold medals at the U18 World Juniors, World Championship, and the Olympics, and has already worked with many of the athletes, coaches and staff members around the league.

The PHF has already introduced a huge increase in salary cap and benefits for next season, which will essentially begin on May 1 when unrestricted free agency opens for 2022-23.

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