Are you ready for a surprise?
Amidst swirling concern about the Canadian dollar, the financial impact of potential expansion, and the all-around tenuous nature of the NHL Salary cap, initial reports from the GM meetings in Florida are that...
The NHL's salary cap estimate for next season falls to $74 million https://t.co/2RmEpKyE2h pic.twitter.com/vkcfFxPZ24
— NBC Sports (@NBCSports) March 16, 2016
The cap is GOING UP.
Wait, what?
That is right. The NHL Salary cap will be 74 Million the following season with what is known as an "Escalator option". Many pundits felt that there was actually a possibility that the 2016-17 cap could fall under the current $71.4 Million dollar cap, as far down as $68 million, it is going up by almost three million dollars. Hooray right?
Well okay, before we get into anything fun, what is this elevator option? It is complicated, but it essentially is, in extreme layman's terms, a set up in the CBA to allow the players to forfeit salary in an escrow fund in order to balance out revenue across the league. Escrow, "Make-Whole", and all that jazz probably brings up pretty terrible memories from the lockout shortened season.
Since, I am speaking for myself here and I am no CBA expert, here is an outstanding summation of what is going on with this concept from NHL Numbers writer Thomas Drance In a very solid business related piece he did back in February 2015. This section lays out the keys to the topic at hand:
The salary cap that governs the maximum and minimum amount teams can spend in any given season is set by estimating the amount of money that will be required to be paid to players under the CBA that season. The model is based off of only one real number: how much revenue the NHL makes that season. Everything else flows from that. And that number will only be known when the season is over.The CBA provides that exactly 50% of hockey related revenue must be paid to players. If the total amount of salary slated to be paid to players in any season ends up being more than 50% of revenue earned that year, then players are required to forfeit an appropriate portion of their salary so that the 50% mark is hit.
This forfeiture is standard practice when the salary cap is set “too high… such that, when the numbers are crunched at the end of the season, the accountants conclude that teams had “overspent…. And this is what has happened almost every season since the salary cap started a decade ago.
To avoid the possibility of sending full-salary cheques to players only to then require players to return some of that money after the season, the CBA includes an escrow concept, whereby a portion of all player salary is retained in an escrow fund. After the season, the accountants determine how much of the escrow fund should be paid to the players and how much should be returned to the owners. Players do not like this (just ask Dan Ellis).
The full article is linked above in the bolded text, and it is linked again right here . It is a great look into the monetary and business side of things which often escapes the scope of this great game we spectators take in all season. It is a lot more than just putting 30 teams on the ice and saying "Go".
Anyways, now to the fun part.
You are Dean Lombardi. The cap is now $74 Million. AND according to General Fanager's page on the Kings, you have 33 contracts next season. You have 12 forwards, 5 defensemen, and 1 goaltender on your 23-man roster.
Money wise, you have $65,730,227 exactly tied up. That leaves you with roughly 8.25-8.27 million in cap space (8,269,773.00 to be exact.)
Those players you have tied up are as follows:
Forwards
Anze Kopitar (10.0) Dustin Brown (5.875) Jeff Carter (5.272,727) Vincent Lecavalier (2.25) Tyler Toffoli (3.25) Dwight King (1.95) Kyle Clifford (1.6) Tanner Pearson (1.4) Nick Shore (600k) Andy Andreoff (587K) Marian Gaborik (4.875) Jordan Nolan (950K)
Defensemen
Drew Doughty (7.0) Alec Martinez (4.0) Jake Muzzin (4.0) Rob Scuderi (1.125) Matt Greene (2.5)
Goalies
Jonathan Quick (5.8)
UFAs include:
Luke Schenn (1.8) Jamie McBain (600K) Jhonas Enroth (1.25) Trevor Lewis (1.525) Kris Versteeg (2.2) Milan Lucic (3.25)
The Kings have one RFA currently on the active roster:
Brayden McNabb
They have several RFAs not on the active roster
Derek Forbort Nic Dowd Andrew Crescenzi
and at least two UFAs not on the active roster
Jeff Schultz Brent Sutter
You can use General Fanager to get all the particulars of upcoming RFA, UFAs, and what not.
So now you have the lay of the land. Start thinking. How are you spending that 8.26? Some things to consider:
- Word is obviously that Vincent Lecavalier will retire at the end of his deal, which would open up a little bit more for the Kings
- Rumor has it they are attempting to re-sign Milan Lucic, which would cost the team (If I am ballparking it here) probably in the range of a Dustin Brown contract of 5.5-6.0.
- Brayden McNabb is a pretty heavy RFA that is looming, and will probably, and emphasis on probably, go to arbitration unless they get something worked out first. How much he makes? That is up to you.
- Do you re-sign Trevor Lewis? He is currently making 1.525, but Marcus Kruger just signed with the Blackhawks for essentially double Trevor Lewis money (3.1). While Kruger is four years younger than Lewis, there is well, um, this to consider
All things considered, Lewis would probably in for a raise if his agent went for at least one prominent comparable as a benchmark.
- What happens with Rob Scuderi? Is he retiring?
- Brown's contract actually does not seem all that intolerable if the cap goes up and he is affordable. Let's be honest, Brown has actually been very very good this season even if his production is nowhere near where it should be for the money he is paid.
- Is Luke Schenn being re-signed? It almost feels like the Kings are lining up their ducks to keep either Brayden McNabb or Luke Schenn, but not both. Does this mean they keep Forbort?
- In regards to this, I also will say the following
If the Kings re-sign Lucic at let's say 6 mil AND Lecavalier retires: you have 4 to spend on McNabb, Lewis, Schenn, McBain.
The first three will likely eat up a large portion of that. Wouldn't be out of the question for McNabb to get 2.5, or Schenn to get 2.5-3.
So for the Kings to sign even one of those players it would cost pretty much everything, AND the blueline would look...kind of old.
Doughty, Muzzin, Martinez, McNabb/Schenn, Scuderi, Greene, young guy at league min. Maybe Scuderi and Greene both retire. Maybe they both stay. Maybe one stays. Who knows.
Point being, knocking out the big money re-signing of Lucic pretty much limits you to a slim amount of money for 3-4 pretty integral players. That being said if the Kings plan on doing that that needs to be the first domino down.
- Nic Dowd is the Kings most productive prospect in the minors and he is an RFA with no waiver exemption for next season. He must be kept on the NHL roster if the Kings plan on...well...keeping him.
With all this in mind. Let's hear your options, your plans, your astute financial maneuvers that keep the Kings at the peak of competitiveness while staying within the new numbers of the 2016-17 cap.
It is your time to shine. Post your roster breakdowns, post your thoughts on the different challenges you see the Kings having to deal with in with the upcoming cap and salary structure of the team.
Follow me on twitter for news and notes about the Kings and the NHL