Monday, September 26, 2016

How Much Leverage Should the Flames Exert?

Drafting a player as good as Johnny Gaudreau in the 4th round is like finding a $100 bill in your winter coat when the weather turns.  Hard to believe, and even harder to believe how happy you are when it happens.  There was some angst and consternation for Flames fans during the "Will he/won't he sign an ELC?" saga that was early-2014, but eventually he did sign with the Flames.  He scored a goal in his first and only game of the 2013/14 season, and was pretty prolific in the final 2 years of his ELC.  Fantastic for the Flames, and for Gaudreau.  But, now it is time for the next contract, and negotations haven't gone as smoothly as a Flames fan might have hoped.

Johnny Gaudreau is in a somewhat unusual position for a player who has finished his ELC, in that he's not eligible for an offer sheet.  The CBA requires a player his age to have "3 years professional experience", and Gaudreau does not due to his 1 game pro season in 2013/14 not qualifying* as "a year of professional service".  With no arbitration rights and no opportunity to sign an offer sheet, he has no way to leverage himself a deal outside of "holding out".  Certainly there is an amount of leverage there, but it's not the same as going to arbitration, or signing an offer sheet with another club.  Calgary, on the other hand, might think to themselves "You know, we've got a ton of leverage here.  We can theoretically say to Gaudreau ' Here are your options.  A 1 yr deal at your QO, or an 8 year deal at 6.75M.  You can hold out if you want, but we're not moving and if you don't sign this year, you're in the exact same situation next summer.  Do you really want to go play in Russia for a couple years just to be in the same place?'"

Are they going to overtly state this to Gaudreau's camp?  Probably not - if I were in Treliving's position, I wouldn't count on such a statement to not create hard feelings.  Besides, there is no real need to be explicit; they know it, Gaudreau's representation is almost certainly aware of it as well.  A reminder probably only agitates the situation at this point; perhaps they feel differently if he's still unsigned on November 15th.

So what do the Flames want to do?  The difference between 6.75M and 8M on an 8 year deal is 10M - not the kind the money a businessman would necessarily want to spend on goodwill, particularly if they don't think their offer is unfair, and don't think Gaudreau has a significantly better alternative.  I wonder if the Flames and Gaudreau look at a one year deal?  The Flames get another year of relatively cheap information before they commit long term, and Gaudreau would have a stronger bargaining position going forward.  The Flames would also then have the opportunity to trade for, or sign a guy like Rakell** to an offer sheet, a RH F that would fit well with CGY, while fitting under the cap.  When Gaudreau gets a big pay bump in 17/18, they'll have cleared a bunch of cap space via Smid/Engelland/Wideman (~11.7M) to make room for Gaudreau's raise.  Is it worth having to deal with the potential of a somewhat higher cap hit for Gaudreau in 17/18 if there is a chance to get a player like Rakell signed long term? Or are they better off trying to get a good long term deal now, while they hold relatively more negotiating clout?  Tough questions, and it will be interesting to see how the Flames handle this situation.

* The CBA also defines a year of "professional experience" as a year played under an SPC, which as I understand it would mean that if Gaudreau went to Europe to play this season, he still wouldn't be eligible for arbitration or an offer sheet next summer.

** Or maybe Trouba, with the recent news of his trade request becoming public.

Tuesday, June 21, 2016

Potential Offer Sheet Target - Seth Jones

Offer Sheets.

Arguably the most underutilized way for an NHL GM to acquire players.

At this point, I'm sure many are tired of hearing me talk about the lack of offer sheets in the NHL, and my surprise that we don't see more of them. That said, I think there are a confluence of factors this summer that may increase the chances we see an offer sheet, perhaps even involving the Oilers. The UFA pool is lacking in top end RH D, and with a few of the more obvious trade options seemingly, potentially, falling away in the past few days (Hamonic, Barrie, Vatanen), there aren't a lot of quality options for Peter Chiarelli.  There are, however, a few teams with promising RFA RH defencemen that might be attractive for a team to acquire via offer sheet, for one reason or another.  Ideally a team might prefer to acquire them via trade, but if a deal can't be made, it's not impossible a team looks at the more rare option of an offer sheet.  All of Jones, Dumba, Lindholm (LH D, but good enough to be under consideration anyways), Barrie and Trouba are players who may be good acquisitions for the Oilers in the right circumstance, but I'm going to focus on Seth Jones for this article as he probably fits best in terms of being a player of interest to the Oilers while also being part of a team in an unenviable cap situation.

Friday, February 05, 2016

Performance Bonuses and Their Impact on Edmonton's Deadline Transactions

This past summer, I wrote an article about the cap consequences of the Reinhart trade.  I thought it might be worth taking a look at how things have played out to this point for the players with bonuses, and how that might impact Chiarelli's thought process heading into the trade deadline.  Now, without seeing the actual contracts it's difficult to know exactly which bonuses each player is eligible for, and exactly what the triggers are, but I'll list the bonuses it looks like each player has a reasonable chance at hitting.  It's not impossible that others could be hit, but this is a look at those more seemingly attainable at this point in time.

Klefbom - max 350K in performance bonuses:  He has a very good chance at hitting the TOI/game threshold provided he gets healthy enough to play in 42 games this year, and a half decent chance to achieve either of the plus minus bonus or the 0.49 points per game bonus. Could potentially max out his 350K, depending which bonuses he's eligible for.

Nurse - max 850K: Has a reasonable chance at plus minus bonuses and TOI.  I don't think he would be voted for the all rookie team ahead of Gostisbehere or Parayko. Maybe 425K?

Reinhart - max 2.35M:  He is unlikely to receive any performance bonuses.

McDavid - max 2.85M and Draisaitl - max 2.475M:  Both of these players are grouped together as they have pretty similar outlooks relating to their bonuses.  Both McDavid and Draisaitl look reasonably well positioned to achieve 3 or 4 of their Schedule A bonus triggers, with 4 likely hitting the limit of their 850K .  The Schedule B bonuses are of particular interest.  The only bonus that either player looks like they have a chance at hitting is top 10 in points per game among forwards BUT both have a decent chance.  There is a minimum of 42 GP required, so McDavid in particular has to stay healthy, but McDavid is currently 2nd among forwards in points per game. Draisaitl is 12th and only 0.01 points per game behind 10th (Hall, interestingly enough).  It's possible both could hit all their bonuses, which would be 5.325M combined.

There is a reasonable chance 6.1M in bonuses could be earned between the five players.  So what does that mean?  Well, that means the Oilers are looking at the potential for a significant overage penalty on their 2016/17 cap.  According to general fanager, the Oilers are ~2.8M below the cap at the moment, so assuming that to be accurate, that nothing changes on the roster, and that those 6.1M in bonuses are indeed achieved, the Oilers would have a performance bonus overage of ~3.3M for the 2016/17 season.  I would argue it doesn't make a lot of sense to keep an unlikely playoff team together if it results in carrying an overage penalty forward into a potential playoff season, so I think it would be a good course of action to dump as much money as they can prior to the deadline to avoid as much of that potential as possible*.

In terms of the deadline, the two players seemingly most likely to be on the potential trading block (making significant money) are Schultz and Purcell.  It sounds like Edmonton will look to move Schultz, and assuming no money is retained that will save them some money against the salary cap. There has been some talk of keeping Purcell and signing him to a new contract for less money.  In a vacuum I don't think that's a horrible idea, but the potential of a bonus overage charge changes the picture.  It's not just choosing between keeping/re-signing Purcell and trading Purcell for a pick.  If the Oilers move Purcell now, it probably saves them something like 1.3M against the cap, so keeping him and re-signing him for 2M (not a given he'd sign that, but let's assume he does for the sake of argument) might have an effective cost of 3.3M factoring in the potential bonus overage penalty that could have been reduced by moving him at the deadline.  I think that means the best approach would be to move both Schultz and Purcell by the deadline. The earlier they are moved, the more cap space saved, and while retaining money to improve the quality of pick might ordinarily make some sense, I don't see that as being the best option here if either/both player can be moved without retaining salary, even if the quality of return is somewhat reduced.

* It would also save some money to carry 7 defensemen instead of 8. The combination of extra playing and development time in the minors with some cap space saved probably makes it prudent to demote either Nurse or Reinhart.

If money has to be retained in Purcell and Schultz trades, the Oilers might well choose to look at moving other players in addition to those two, at least partially in an effort to reduce potential bonus overages.