When the new Collective Bargaining Agreement was finalized between the NHL and NHLPA after the partial-season lockout of 2012-13, the initial outlook for the league was rosy, with growth expected on an annual basis, bringing increased revenue and subsequently giving the players an ever-larger pool to draw their salaries from.
After better-than-expected increases in revenue in the first two years, the league’s salary cap went up by just 3.5% last year, even with the players opting to increase the available salary pool by 5% over what was actually available, to give more flexibility to free agents looking for big offers from several possible destinations.
Now, looking ahead to the 2016-17 season, initial estimates have the actual amount of funds available for a team’s 23-man roster at $69.5 million; a mere 15.8% increase in the four full seasons since the work stoppage. It’s possible the players will once again exercise their option to increase that number by five percent — to just about $73 million — but indications are that the parties are prepared to use just enough of the available inflator to hold the cap steady at the $71.4 million limit that teams operated under for the 2015-16 season.
That means general managers who signed contracts expecting the cap to continue to rise are now in a position where they have too much money committed to not enough players to fill out their rosters, or at least not enough to bring in the quality talent needed to contend for a Stanley Cup.
Other than trades, there are options available to shed some of the salary a team has locked up in player contracts. Players can be placed on waivers and sent to the minors, where $950,000 can be shaved off a one-way cap hit for a buried player. A team can also choose to buy out a contract and part ways with a player, though they first need to be exposed to waivers to give another team a chance to claim them.
That doesn’t mean those dollars come completely off the books. A portion of a bought-out salary will still require some of a team’s yearly allowance. A player is entitled to two thirds of his remaining contracted amount if he’s at least 26 at the time of the buyout, and one third if he’s younger than 26 years of age. That salary will be paid out over twice as many years as were remaining on his contracted term.
For example, when Pierre-Alexandre Parenteau was bought out by the Montreal Canadiens in the 2015 off-season, he was 32 years old and had one year at $4 million remaining. He was therefore eligible for two thirds of that amount — $2.67 million — to be paid out over two years. The result was a cap charge of $1.33 million for both the 2015-16 season and the upcoming 2016-17 campaign.
The buyout period is fairly short, opening on June 15 and ending on June 30, but it could be a busy time as a few teams need some wiggle room for next year.
The Canadiens have a fair amount of cap space to work with, even with the lower projected cap, but there are a few candidates for a buyout.
David Desharnais, perhaps the odd man out on the Habs’ long list of centremen, has one year remaining at $3.5 million. It would make sense for Bergevin to first attempt to move him and have no financial obligations to Desharnais afterward, but the buyout may end up being the most realistic option. At 29, he would be entitled to two thirds of that amount to be paid over two years, or $1.167 million both this upcoming season and next. That move would create $2.3 million in space for this year.
With the signing of Mark Barberio to a team-friendly cap hit of just $750,000, the $4.1 million allotment to Alexei Emelin for the next two years is getting harder to justify. While he did have a good 2015-16 season, freeing up at least some of the space his contract occupies may be a viable option to increase the team's chance of landing a high-profile free agent, or taking on a larger salary in a trade.
A full no-trade clause ties Bergevin hands with regard to moving Emelin’s contract outright, but that does switch to a limited NTC for the 2016-17 season. That shift happens on July 1; after the end of the buyout period. It’s likely that Bergevin will be able to find a partner for a trade at that point, so buying out his contract may not be the best course of action.
If a buyout of his final two seasons is the decision, the Canadiens would gain $2.77 million of available space for next season, and almost $3 million for 2017-18, but the penalty comes in the next two seasons, when there would be a cap charge of $1.433 million for a player no longer on the roster.
As it currently stands, with Artturi Lehkonen, Sven Andrighetto, and Stefan Matteau all placed in the opening-night lineup, and the cheaper of the two backup options (Mike Condon and his $575,000 hit versus Charlie Lindgren's $925,000), the Canadiens have about $6.6 million in available space with a $71.4 million salary cap, with just two forwards left to sign, acquire, or bring up from the AHL depth.