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A three-way trade might be a solution for the Karl Alzner contract problem

Creative bookkeeping and some willing trade partners could allow for the scenario Marc Bergevin needs.

NHL: Boston Bruins at Montreal Canadiens Jean-Yves Ahern-USA TODAY Sports

When Montreal Canadiens general manager Marc Bergevin dipped into the market on July 1, 2017 to sign defenceman Karl Alzner, he took his biggest free-agency risk at the helm of the team, dishing out a five-year contract worth $4.625M per season. It was also Bergevin’s biggest mistake.

Alzner spent the first season of his deal in Montreal struggling to adapt, and by his second season went from a healthy scratch, to unclaimed on waivers, to filling out a top-four defensive role for the Laval Rocket in the AHL.

It is a safe assumption that Alzner’s time in the starting lineup of the Canadiens is over. Sure, there is the opportunity for a redemption story if Alzner comes to training camp in the best shape of his life — faster, sprier, and fully adapted to the new reality of a younger NHL — and we shouldn’t expect any less of an effort from a professional like Alzner. But we also need to face the very real possibility that Alzner has begun a decline from which he will not recover.

Alzner’s NHL cap hit under a ‘do nothing’ scenario where he remains with the Canadiens

That poses a problem for the Canadiens, as he still has three years remaining on his lucrative contract. Clearing waivers twice last season showed there was no appetite from any of the 30 other teams to take on his contract at that cap hit.

As pressure mounts on Bergevin to put together a team that can get deep into the playoffs for the first time since 2014, he should be considering all his options when trying to deal the albatross of a contract.

As we recently explored, burying the contract in the AHL only shaves $1.075M off of the cap hit, so down from $4.625M to $3.550M, which is still a significant amount against the cap if Bergevin hopes to add star power to his roster.

Similar to last season, should Alzner be sent to the Laval Rocket, the Canadiens get a slight cap relief

Buying his deal out on June 15 would offer temporary relief this season — a cap hit of $1.069M — but becomes a crippling $4.194M against the cap in 2020-21 due to a lockout protection that Alzner had designed into his contract where his salary drops significantly that year. Bergevin, being a risk-averse manager who always looks ahead to tomorrow when planning today, would certainly not be prepared to endure such a waste of cap space, even for a year.

A buyout offers some significant relief this season, but is a non-starter for 2020-21, when the cap hit is equivalent to him remaining on the team

This is where conversations around retained-salary trades come into play. Bergevin must have, at the very least, proposed to retain some salary when he undoubtedly called around the league to fellow GMs to gauge interest last season. It seems there is little interest for this kind of deal with another team. Under this scenario you’re asking a team to take quite the cap hit for three seasons, the price likely being a high-level prospect entering an entry-level contract.

It would be a big ask to get another club to agree to a 50% retention transaction without offering some major incentive

But here are some important rules to know about retained-salary transactions:

  • A Standard Player’s Contract (SPC) can be traded with retained salary up to a maximum of two times.
  • A maximum 50% can be retained in any one trade.
  • Any team with a retained salary is on the hook if the new team decides to buy out the contract for the amount that was retained.

Using these three points, I propose that the best way for the Canadiens to rid themselves of Alzner’s contract is a three-way trade with the following components:

  • Montreal trades Alzner, retaining 50% salary and offering incentives to Team B.
  • Team B trades Alzner, retaining 50% of his remaining salary, and pieces to Team C for pieces.
  • Team C then proceeds to buy out Alzner.

Diluting Alzner’s contract among three teams, with each one retaining the maximum allowable, and then the final team buying out the contract suddenly creates a very palatable scenario for some reasonable trades, as the cascade of cap hits is not too onerous, and the Canadiens achieve maximum cap savings.

A three-way trade, with the Canadiens retaining 50%, and Team B retaining 50% of the 50%, with Team C buying out the contract

It is a complicated undertaking. “Easier said than done,” a wise man would say, and they don’t call him wise for nothing. But it’s under this scenario that the Canadiens will achieve the highest cap savings. The big outstanding question is of course what do the Canadiens have to give up in order to make this scenario work, and what can they possibly hope to get in return. The very nature of this trade is designed to free up cap space, and therefore needs to be explored to the fullest, with the assumption that any piece in return is simply a throw-in. Perhaps a player on an entry-level contract who is not living up to the billing to free up a contract space for Team B. Perhaps an unwanted contract that is less heavy than Alzner’s which can be buried in the AHL a lot more easily.

Team B and Team C would have to work out a hockey trade that allows Team C to benefit mildly, whereas Team B would come out the big winner with whatever incentive the Canadiens offer.

This scenario is complicated, and the odds of it being worked out are small, but in order to allow Alzner to get another opportunity somewhere else, assuming he can find a new contract after the buyout, and rid the Canadiens of any lingering significant cap hit, this scenario is pretty much as optimal as it gets.