What Would You Do With $9M in Cap Space?

Projecting exactly how much cash a team will have to work with on July 1st is always tough a month and a half before, and your Ottawa Senators are no exception, thanks to the uncertainty around several of their pending free agents.

As Trevor mentioned in his Five Thoughts yesterday, Claude Giroux, the biggest name, shouldn't be given a blank cheque to stick around, but the organization should definitely try and bring him back on a short-term deal.

There's an opportunity for general manager Steve Staios to get creative with one of the NHL's various cap circumvention tools - performance bonuses, which are increments of bonus salary paid out to players for reaching various agreed-upon milestones.

What makes performance bonuses so lucrative for cap-strapped teams is they allow them to exceed the salary cap. No, I'm not kidding. With these you can exceed the salary cap by up to 7.5% of the ceiling.

Performance bonuses can be applied to three groups of players: Entry-level deals, with folks like Connor Bedard receiving the annual maximum of $3.5M, players signing one-year deals coming off of long-term injuries, such as Connor Brown's 2023-24 deal with the Edmonton Oilers, and, pertinent to our situation, players over the age of 35 signing a one-year deal.

In Giroux's case you'd probably look at games played, goals scored, and cars stolen as some easily achievable milestones. So, if you pay Giroux $4.5M in total, but $1M of that is performance bonuses, you have an effective cap hit of $3.5M, which will allow for more flexibility in free agency.

The only downside is that if these bonuses exceed the cap, that amount is applied to your payroll as dead salary next season. That said, considering the increasing cap, and Shane Pinto's next deal coinciding with David Perron and Nick Jensen coming off the books, it's worth it to maximize the team's potential right now.

Beyond Giroux, there are a few other questions to answer. I'm of the opinion that while the team's goaltending wasn't incredible, it was certainly a non-issue in large thanks to Leevi Merilainen stepping up in Linus Ullmark's absence. The Finn should take the backup role next year, and a one-way contract may entice him to agree to a league-minimum salary.

As for Adam Gaudette, the 19-goal scorer has earned a raise next season that I don't think the Senators will be in a position to offer. He's probably the best 4th-liner we've had since Jean-Gabriel Pageau in 2015, but he's still a 4th-liner.

Fabian Zetterlund will most likely file for arbitration and eventually reach a settlement on a 1-year deal before the hearing. No clue what that number's going to be.

Then there's pending restricted free agent Tyler Kleven's new deal, which Staios should try and keep as low as possible for the sake of the roster as a whole.

There's a key component of RFA negotiations – in that if a team wishes to retain their rights past July 1st, they must submit a 1-year qualifying offer at the salary of the previous year. That's why we see some RFAs go unqualified, such as when the Sens passed on offering $2M to Erik Brännström last year.

One thing Staios can do to entice Kleven to sign for a lower cap hit would be to alter the structure of, say, a two-year deal. Here are two examples:

Option A: $1.3M in 2025-26, $1.3M in 2026-27

Option B: $950k in 2025-26, $1.65M in 2026-27

Both of these deals have the same average salary and cap hit, but if I'm Kleven, I'm going with Option B all day, since as an RFA at the end of that deal, I'm going into negotiations with a higher qualifying offer, which means a slightly more favourable salary range heading into negotiations.

Using PuckPedia's roster builder, we start out with $17.5M needed to sign 8 players. I've set aside $3.5M for Giroux, $3.0M for Zetterlund, $1.3M for Kleven, and $775k for Merilainen, which leaves us with $9M for 3 forwards and a defenseman.

Do we go after a top-six forward and a 7th defenseman? Do we prioritize adding a better blueliner over upgrading our offense? My suggestion would be to take a more broad approach to address both. No Brock Boeser speculation here – I'm looking at a David Perron-esque deal for another veteran in Kyle Palmieri.

With 24 goals and 24 assists last year on a declining Islanders team, Palmieri is likely hungry for another playoff run, and joining the Sens would allow the 34-year-old to form a strong third line with Pinto and Perron, with Ridly Greig and Mike Amadio making up 2/3rds of what would be the gold standard of 4th lines. Have Nick Cousins, Stephen Halliday or Angus Crookshank round out that trio, with Zack MacEwen back into the press box to insert into the lineup for your regicide needs.

As for the defense, another right shot might be a good idea. Not that I don't think Nikolas Matinpalo is a capable third-pair guy, but there will be injuries and having him as the 4th option will give the club a great safety net.

Aaron Ekblad is too expensive, Brent Burns isn't a good fit with Thomas Chabot, and the Cody Ceci PTSD is real, even if he's actually been pretty decent in the last few years. So you're looking at Dante Fabbro, Nick Perbix, and David Savard, with Perbix being the most likely of the three to switch teams – Columbus would be foolish to let Fabrro walk, and as much as I hate to admit it, the Habs are going to be a problem next year.

So with $3.7M for Palmieri, $3M for Perbix, and $1.55M for two league-minimum forwards, you're under the cap by $800k with this 22-man roster:

That's my offseason – let's hear about yours!