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Los Angeles Kings Buyout Dion Phaneuf

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The buyout affects the Sens cap hit — can they reach the cap floor?

NHL: Ottawa Senators at Los Angeles Kings Kirby Lee-USA TODAY Sports

On the opening day of the NHL buyout window, the Los Angeles Kings have announced that they’ve bought out the remainder of Dion Phaneuf’s contract. How does this affect the Sens? They retained 25% of his cap hit in the trade to the Kings, and that is affected too.

Before the buyout, Phaneuf’s retained cap hit counted for $1.75 million against the cap with two years remaining. That term is now doubled to four years, with the cap hit counting for an average of $697,917 per year. That value isn’t consistent over the four years, however, due to his increased signing bonus in 2020-21 worth a total $2.5 million between the Sens and Kings.

Here’s the Sens’ new cap breakdown of Phaneuf, courtesy of CapFriendly:

Dion Phaneuf’s Buyout Breakdown

Season Orig. Cap Hit New Cap Hit Savings
Season Orig. Cap Hit New Cap Hit Savings
2019-20 $1,750,000 $729,167 $1,020,833
2020-21 $1,750,000 $1,354,167 $395,833
2021-22 $0 $354,167 -$354,167
2022-23 $0 $354,167 -$354,167

Phaneuf’s contract was originally signed by the Toronto Maple Leafs in 2013, with an annual cap hit of $7 million for seven years. He was dealt to Ottawa in 2016, in a rare Sens-Leafs trade, with Toronto taking some of Ottawa’s cap dumps back in Jared Cowen, Colin Greening and Milan Michalek. Later traded to the Kings for Marian Gaborik, Phaneuf struggled mightily in 2019-20, with the lowest point total of his career and sub-par defensive results.

Before the buyout, Phaneuf was the Sens’ highest paid defenceman. That title now belongs to Mark Borowiecki, whose cap hit of $1.2 million is the Senators’ only contract over a million. Cody Ceci will likely make more if he’s re-signed by Ottawa, with a qualifying offer of $4.3 million.

While cap savings seems like a good thing for most teams, the Sens are in the complete opposite scenario. Per CapFriendly, the Senators have $35 million in cap space, with a current roster size of 15. The team is expected to re-sign a couple of their RFAs (Ceci and Colin White being the most notable), and possibly bring in a couple free agents to fill out the roster. But it will take some heavy lifting (and some more cash flow from Melnyk) if the Sens want to hit the floor.

If the Senators fail to reach the cap floor, they will have ‘circumvented the cap’, which is basically the NHL’s term for cheating. Penalties would be decided by the league, which most likely would be either a fine or forfeiture of draft picks.

As for Phaneuf, he will enter unrestricted free agency.