FanPost

A Fan’s Guide to Being the Senators GM

As a fan I have found it difficult to get good background information on the numerous issues faced by General Managers. Sports Writers will throw out a statement here and there, such as "the Senators will have a challenge reaching the Salary Cap Floor", but rarely will they actually delve into these areas in any detail, so I’ve decided to try and put together a helpful article for Sens fans who are in the same boat.

But first off, let me say this is not intended to be the definitive article on the Salary Cap and other NHL Roster rules and regulations, so don’t go making a significant wager based on what I’ve written here lest you lose your money and then go looking for someone (like me) to blame !! If you want details and accuracy, go to sites like CapFriendly.com, NaturalStatTrick.com, Hockey-Reference.com, Evolving-Hockey.com, or Hockeydb.com.

Let’s start with the SALARY CAP.

The Cap has an Upper and Lower limit that every team’s annual player salaries must fall between. For the 2019-20 Regular Season the limits were $81.5 M Upper and $60.2M Lower. In reality, it’s not just salaries, but also bonuses, although there are complexities with bonuses that I won’t attempt to address.

Recently TSN reported this on the 2020-21 season …..

"NHL deputy commissioner Bill Daly said Wednesday the league's Salary Cap is expected to increase by anywhere from $2.5 million to $6.7 million for next season.

Speaking at the NHL general manager meetings in Boca Raton, Fla., Daly said the Cap is projected to be between $84 million and $88.2 million after sitting at $81.5 million for this season."

From this announcement, it would be safe to assume that the Lower Limit, a.k.a. Cap Floor, is likely to be in the $63M range, but that was prior to the COVID-19 pandemic.

So HOW IS a team’s Salary calculated?

A team’s Salary is based on the sum of all contracts for players currently on the NHL Roster (I’ll get into some of the details of Rosters a bit further down), calculated DAILY during the Regular Season only. There is NO SALARY CAP in the Playoffs. Each player’s contribution to a Team’s Salary is calculated by first taking the AAV, or Average Annual Value, of that player’s current contract, and then averaging the AAV per day over the course of the Regular Season. For example, a player who has a 3 year contract in which he gets paid $1M in the first year, $2M in the second year, and $3M in the third year, is given an AAV of $2M ($6M total divided by 3 years). If the Regular Season is 200 days long, then each day this player is on the NHL Roster, he accounts for $10,000 towards the $81.5M annual Salary Cap.

A Team’s cumulative salary to-date (that is, the running total) is re-calculated daily and the running total CANNOT exceed the running total Upper limit, nor fall below the running total Lower limit at any time. In the case of an Upper limit of $80M, and a 200 day Regular Season, a team’s running total salary after 20 days must be less than ($80M divided by 200 and multiplied by 20 days), or $8M. My understanding is that if a team is under the running total Upper limit early in the season, they can "bank" the savings and use it later, but a team CANNOT go over the running total Upper limit today and make it up during the rest of the season. Similarly, a team CANNOT go under the running total Lower limit and promise to make it up later in the year. Capology at it’s finest !!

As for the NHL Roster, it is limited to a maximum of 23 players, but also has a minimum of 20 (18 skaters and 2 goalies). For a game, a team can dress players on their Roster to a maximum of 20 (18 skaters and 2 goalies). In theory, a team could have only the minimum of 20 players on their Roster in an attempt to keep their team Salary as low as possible, but there are challenges with that plan as I’ll now get into.

First off, any player listed as eligible to play in a game is considered to be on the 23 man Roster for the purposes of Salary. That is, while a team only dresses 20 players for a game, the other 3 players on the Roster are included in the Salary calculation.

So, what about a player who is injured and doesn’t play 1 or more games, but isn’t designated as being on Injured Reserve (IR)? This player is often listed as "day-to-day" and he counts as part of the 23 man Roster. This means the team CANNOT add another player to the 23 man Roster BUT the injured player’s daily Salary is added to the Team Salary with no exceptions.

What about a player who is designated to be on IR? On IR means he’s off the roster for a minimum of 7 days, so his spot on the 23 man Roster can be filled if the team so chooses, but the player added to the roster will have his salary added to the running total. The Salary of the player on IR still counts against the Cap, and there’s no Cap relief (example of Cap relief to follow).

If a team has a player who is on LTIR (Long Term IR), then he’s off the Roster for a minimum of 24 days, and his spot on the 23 man Roster can be filled. His Salary counts against the Cap, but if the Team exceeds the Cap, they can get some relief from the LTIR salary. It’s too complicated for me to fully understand, but let’s call it the Patrick Kane loophole. Patrick Kane was injured on Feb. 24, 2015 and returned for the opening night of the playoffs on April 15. While he was on LTIR the Hawks used his long-term-injury Salary "relief" to exceed the Cap during the Regular Season and acquire Kimmo Timonen ($2 million) and Antoine Vermette ($3.75 million). All 3 players, Kane, Timonen, Vermette, helped Chicago win the Stanley Cup with a payroll that wouldn’t have been Cap-compliant in the Regular Season. While Salary Cap relief is not the full amount of the player on LTIR, it does help teams at the Upper limit.

Teams with an Upper limit Cap problem and having a Nathan Horton or David Clarkson contract (or other player on LTIR), often trade them to a team with no Cap issues, or with a problem reaching the Cap floor. The selling team often has to sweeten the deal to get the buying team to take on such a contract. For the buying team, while they carry the Cap hit of the player’s salary, the actually salary paid to the player is mostly covered by insurance so it only has a small impact on the team’s operating budget.

What if a team is having a problem keeping under the Cap and has an underperforming player with a $6M AAV? Can they put him on Waivers knowing that no team will pick up his massive $6M contract, and then assign him to the AHL thereby reducing the team’s NHL Salary? Not anymore !! Any salary in the AHL, or in another "loaner league" like those in Sweden or Germany, that is greater than roughly $1M, will cause the difference to be added to the NHL team’s Salary. Call it the "Wade Redden" rule. $6M salary minus $1M equals $5M added to the NHL team’s salary, even though the guy is in the AHL. Similarly, if a team tries to go with a 20 player roster and "hide" salaries in the AHL, part of their salaries could still be counted if they exceed roughly $1M.

This last example leads right into how Call-ups and Waivers play into the Cap, and particularly after the Trade Deadline.

There is a complicated formula to determine if a player can be called up to the NHL and sent back down to the AHL without requiring Waivers and potentially lost to another team without compensation of any kind (no money, no player in return). The formula includes Age at Contract Signing, Years since Contract Signing, and NHL games played. The formula is different for Skaters and Goalies.

A player who does require Waivers can be claimed by another team as long as they keep him on their NHL roster (with some exceptions and additional rules). So if a team tries to maintain a 20 man roster in an attempt to have a lower Salary, but has all 23 players requiring Waivers, they run the risk of losing players when they send them to the AHL. On the other hand, if they only have 20 players requiring Waivers and use "Waiver-Free" AHL players to fill in when a roster player is injured, they risk having a weaker team that might not make the Playoffs. And finally, after the trade deadline, a team is only allowed 4 call-ups from the AHL, except for "emergency" replacements. This last limitation certainly makes it more challenging to attempt to run a team on a 20 man roster after the trade deadline.

So those are the key elements that must be navigated in constructing and managing an NHL team given the Salary Cap, Roster Limits, and Waiver Rules.

How does this affect the Ottawa Senators in the coming years, and in particular, do the Sens really have issues reaching the Cap Floor for the upcoming 2020-21 Season?

There are a lot of variables to be considered, but to try and get a handle on it I’ve made a guess at what the Sens opening Day lineup needs to look like to make it ABOVE the Cap Floor.

Assumptions: I’m going to estimate that the Cap Floor will be around $63M and I’ll round off salaries in Millions of dollars to 1 decimal place to make for easier addition.

Here goes …

FORWARDS

Locks: Tkachuk – 0.9, White – 4.8

Ongoing Contracts: Ryan – 7.3, Anisimov – 4.5

RFAs to Sign: C Brown, Duclair, Tierney – I’m guessing 9.0 in total, but I’ve read as high as 12 total. Nick Paul – I guess 2.0

Up and Comers Still Under Entry Level Contracts: Batherson – 0.7, Norris – 0.9, L Brown – 0.9, Chlapik – 0.7

UFAs to sign?

Boedker – I’m assuming they don’t sign him as I have the 12 forwards above, and Boedker’s last salary was $4.0 M, likely too rich for the Senators.

Peca, Hawryluk and Sabourin ? I’m assuming they will either not be signed, or signed for around $1M and sent to the minors, assuming they clear waivers. Because Hawryluk was a high 2nd round pick and only 24, he might get a contract and sit on the bench as an injury replacement.

DEFENSE

Locks and Under Contract: Chabot – 8.0, Zaitsev – 4.5, Reilly – 1.5, Wolanin – 0.9

UFAs to Sign?

It sounds like they’ll sign Borowiecki, so I’m guessing $3.0M.

Hainsey (at 3.5 this year) – I wouldn’t sign him, but the noise being made is that the coach and GM love him.

Up and Comers Still Under Entry Level Contracts: Brannstrom – 0.9

RFA to Sign: Either Jaros or Englund – 1.5 (both are at 0.75 this year)

GOALIES (if the final 3 months of the season are any indication)

Nillson – 2.6, Hogberg – 0.7

And then there’s the group I’ve called "Others" ……

OTHERS: Gaborik (LTIR) – 4.9, Phaneuf (Buried Partial Contract) – 1.3

So that makes a Roster of 21 … 12 Forwards, 7 Defense and 2 Goalies, plus 2 "Others", for a TOTAL Salary of $61.5M, and maybe add $1M for Hawryluk.

12 Forwards (no Boedker) – $31.7M assuming only $9.0M for the 3 RFAs

7 Defense – (no Hainsey) – $20.3M

2 Goalies – $3.3M

Others – $6.2M

So, without signing Boedker or Hainsey, and with a low value for the trio of C Brown, Duclair and Tierney, the Sens are within spitting distance of the Salary Floor.

That’s the good news. The bad news is that leaves Formenton, Balcers, and Abramov in the AHL, and what if the Sens win the draft lottery and get Lafreniere? He IS MAKING the team at $1M, which means that 1 of Batherson, Norris, L Brown or Chlapik likely drops to the AHL.

Decisions Decisions ……



This FanPost was written by a member of the Silver Seven community, and does not necessarily reflect the beliefs or opinions of the site managers, editors, or Sports Blogs Nation, Inc.