Canes Art on main page generously provided by Chris Clark.
This article kicks off what should be a fun week with some reader articles and also some special guest articles. A few schedule challenges exist, but the general goal is to try to post morning and mid-day articles most days, so please check back regularly.
About the Author
David Miller (Twitter=@dmilleravid) grew up in North Carolina, now lives in Charlotte, and has always followed the Stanley Cup Playoffs but didn’t start following the Canes much until recently – maybe the 2011-12 season – drawn in by John Forslund and Tripp Tracy. He has gradually ratcheted up his fandom until becoming, like many other readers, a little too obsessive over the past two seasons. David claims to lack many other’s knowledge of Canes history and asks that you please don’t hold that against him.
It’s an honor for me to write this guest post for Canes & Coffee. I want to thank Matt for this opportunity and for setting a high bar for quality content and analysis. Hurricanes fans are lucky to have this resource and, we owe Matt a great deal of gratitude for his energy and dedication to Canes hockey.
Setting the stage and key assumptions
Leading up to the Expansion and Entry Drafts and Free Agency, there have been quite a few comments on this site regarding GM Ron Francis’ salary budget for the 2017-18 season and any salary cap issues that may befall the team over the coming years. Elias Lindholm, Sebastian Aho, Brett Pesce, Noah Hanifin, and Jeff Skinner all have contracts expiring over the next two seasons and all are part of the core that GMRF would like to keep together.
Now that the dust has mostly settled on player movement this off-season league-wide and the Canes roster for 2017-18 is approaching final form, I thought it would be an interesting exercise to review what the salary cap situation looks like for the 2017-18, 2018-19, and 2019-20 seasons. Admittedly, much can and will change, even for this season. There can still be a trade for a elite difference-maker forward or a late salary dump trade with a team in “cap hell”, both of which could materially affect the projections that follow. Regardless, we now have enough data to form an opinion on the general state of the team’s cap situation.
There are a handful of assumptions that drive the numbers in this analysis:
1) The NHL Salary Cap has risen by roughly $2-million per year over the past few years (per Wikipedia) but I am projecting it to rise more modestly ($1.5 million) each year from $75-million in 2017-18 up to $78-million in 2019-20.
2) Since GMRF has taken over as GM, the team has operated close to the cap floor. The Canes community assumes that Peter Karmanos has placed a budget ceiling on player salaries as the team’s finances worsened, but whether there is or is not a salary budget, this analysis presumes that the GMRF can spend up to the cap ceiling, especially as the team wins more.
3) A full NHL roster can carry 23 players, but this analysis assumes the Canes will carry 22 players: 13 forwards, 7 defensemen, and 2 goalies.
4) And definitely the assumption that will be subject to the most debate and uncertainty, I had to make some reasonable best-guesstimates for contract values for players I think will be re-signed when their current contracts expire. For example, Brett Pesce’s contract expires after the upcoming season, but he is expected to be extended, maybe even this summer. I had to estimate his new deal for the 2018-19 and 2019-20 seasons when that extension kicks in.
5) There will also be some disagreement as to whether an UFA will be re-signed or replaced by a prospect and what the ratio of veterans to youth will be. I decided not to get into that discussion/debate here to the extent possible (though I do have opinions) but that definitely affects the numbers.
6) It is impossible to model trades and there almost certainly will be some over the next three years. For instance, if the Canes are a playoff-contending team in 2017-18 and are a buyer at the trade deadline, the roster and prospect pool may look very different the next March 1. This model does not and cannot project any trades their cap consequences.
7) All existing salary information comes courtesy of CapFriendly.com.
And finally, I created this Google Spreadsheet to help me track the numbers. Feel free to make your own copy and play with the numbers yourself; it’s fairly easy to edit and change and most readers should be able to figure out how it works.
Now, on to the commentary …
The roster is mostly set for this upcoming season. As mentioned earlier, it’s possible that GMRF makes another move opportunistically but it’s more realistic to assume that the players winning roster spots will be a subset of the players currently with contracts.
Projected Roster for 2017-18– Here is what a current roster looks like. Note: this is not an attempt to slot players or establish linemates, just be representative of who is in the lineup.
Skinner / Rask / JWilliams
Aho / Staal / Teravainen
Stempniak / Ryan / Lindholm
Jooris / Kruger / McGinn
Slavin / Pesce
Hanifin / Faulk
Fleury / Van Riemsdyk
As of today, the Canes have $16+ million of cap space available for this season and there are no unsigned players that will materially affect the current Cap figure. GMRF has enormous wiggle room over the balance of the summer and into next season, and it is not a stretch to think that he is positioning his finances to be a buyer in late February at the trade deadline.
This is when things get more interesting. At the end of the 2017-18 season, the team has a number of players with expiring contracts, a number of players who will be entering the first year of a new contract, assuming that they have been extended a new contract (assumptions I outline in this post), a handful of other salary-related events, and also a growing pool of more experienced prospects many of whom would have spent the 2017-18 season in Charlotte.
UFA’s and RFA’s
For each player or situation, I have added brief commentary and the net change to the Hurricanes’ salary cap.
Cam Ward – It is highly unlikely that Cam Ward will be offered an extension at anywhere near his current $3.3-million rate. More likely, Ward is celebrated as a Canes hero but makes way for Callum Booth or Alex Nedeljkovic – whomever is more ready to be Scott Darling’s backup – or an UFA if neither is ready. It’s reasonable to assume that GMRF invests ~$1-million in the backup goalie position to save $2.3-mil in cap space.
Lee Stempniak – It is likely that Stempniak is not re-signed, mostly because he’ll be 35 when his contract expires. I It is possible that Julien Gauthier or another prospect winger earns a roster spot, but it is at least as likely that GMRF listens to Bill Peters call to fill roles with “proven NHL players” and signs a middle-6 UFA at $4-mil per year, which is how I have modeled it, spending an extra $1.5 per year.
Derek Ryan – Ryan signed a one-year contract that will be expires as the end of the 2017-18 season. It could break one of three ways:
- He plays as expected, in which case he might be re-signed;
- He under-performs, in which case GMRF replaces him with a prospect, whoever is most ready, or through a trade or UFA; or,
- He produces above expectations, in which case he will likely be due a raise, attract more demand from other teams, and may become too expensive relative to other options.
In Case #1 or #2 – what I’ll call the ‘Cap Neutral Case’ – our compensation to either Ryan or to his replacement – likely a player on an entry-level contract – is roughly the same from perspective of the cap. For Derek Ryan’s roster spot, I have modeled the ‘Cap Neutral Case.’
Joakim Nordstrom – After making big noise with Andrej Nestrasil on Jordan Staal’s line in 2015-16, Nordstrom settled in as a reliable player in the bottom 6 and on the penalty kill. Nordstrom is a known commodity and is probably not going to develop dramatically from here, so given the rising pool of forwards in the system with much higher offensive ceilings, he will have to compete hard for his slot on the team. Similar to Derek Ryan and given his Nordstrom’s $1.25 million salary, I’m modeling a ‘Cap Neutral Case.’
Josh Jooris – It is hard to make any kind of statement about what will happen to Jooris before he plays his first game in a Canes jersey, but given his salary and slotting, like Ryan and Nordstrom, it will will not make a material difference in the teams cap hit whether he stays on a similar or slightly higher valued contract or is replaced by one of our prospects. I have again modeled a ‘Cap Neutral Case.’
Klas Dahlbeck – Among the three late off-season defensive pickups made by GMRF last Summer, Dahlbeck played the best and well enough to earn a one-year, one-way contract, even it if was only to protect Justin Faulk in the expansion draft. With Jake Bean, Roland McKeown, and Trevor Carrick in Charlotte (assuming Haydn Fleury is already in Raleigh), there is going to be huge competition for the last defenseman slot in Raleigh. By this time next year, should our ‘Core 4’ + Trevor Van Reimsdyk + Haydn Fleury all progress as planned, the Canes are going to be extremely deep on the blue line. Having said that, Dahlbeck may stay only so the team’s higher-ceiling players spend more time developing on the ice in Charlotte rather than spending time in the press box in Raleigh. Again, sounding like a broken record, Dahlbeck, should he be re-signed, will not likely be more expensive than any of our D-men on ELC’s, so I’m modeling another ‘Cap Neutral Case.’
Brett Pesce – Many of us would like to see Pesce extended sooner rather than later, and we anticipate it happening later this summer on terms similar to those offered to Jaccob Slavin. I have modeled an extension at $5.0-mil per year, slightly less than Slavin, which represents a cap increase of $4.2 million per year.
Noah Hanifin – Should Hanifin not be extended this summer, which seems like the current trajectory, he will still be an RFA and need a new contract in the summer of 2018. He has a top-pairing ceiling but has not progressed as quickly as Slavin and Pesce, who will have earned top-pairing contracts that kick in this year. While it is possible that Hanifin has a breakthrough year in 2017-18 – that’s everyone’s hope – I have modeled that he continues to progress at a similar rate to become a solid middle-pairing D-man with an extension at $4.5 million per year. Hanifin’s new contract is slightly less than Pesce’s and an increase of $3.325 million per year over his entry-level deal.
Elias Lindholm – If Lindholm were in a recent draft class, like, say, in the 2017 class, he almost certainly would not start the season in Raleigh like he did his rookie year. By all accounts, he was rushed to the NHL which slowed his development. As he has matured, and after a slow start in 2016-17, he showed us signs of his upside by finishing 2016-17 very strong. He also carried that strong play into the World Championships. I have modeled that Lindholm will have a very productive 2017-18 season and his new contract will come in at $5.25-mil per year (similar to Andre Palat’s contract in Tampa Bay) which is a cap increase of $2.55-mil per year.
Trevor Van Riemsdyk – Similar to Josh Jooris, TVR hasn’t played Game One for the Hurricanes but he will need an extension for the 2018-19 season. If the rest of our young blue liners continue to develop as planned, especially Jake Bean, it is possible that TVR is not re-signed or is traded; otherwise, he likely will be extended as insurance or because our prospect D-men aren’t developing as fast as planned or at all. I have modeled an extension at $2.0-mil per year which is an increase of $1.175 million per year over his current contract.
Eddie Lack / James Wisniewski – The salary that the Hurricanes retained in the Eddie Lack trade to Calgary will come off the books as will the last year of Wiz’s buyout from 2015. This frees up $2.375-mil in cap space.
Projected Roster for 2018-19
Skinner / Rask / JWilliams
Aho / Staal / Teravainen
Middle-6 UFA / Ryan or Prospect* / Lindholm
Jooris or Prospect* / Kruger / Nordstrom or Prospect*
McGinn or Prospect*
Slavin / Pesce
Hanifin / Faulk
Fleury / Van Riemsdyk
Dahlbeck or Bean
Booth or Nedeljkovic or UFA
* Prospects: Foegele, Gauthier, Kuokkanen, Necas, Roy, Saarela, Wallmark, Zykov, 2018 1st-Round Pick
Looking at this roster, there are 4-5 roster spots identified above that should be highly competitive between an existing player and a prospect. At this point, the Canes should be a playoff-caliber team and GMRF will probably NOT feel comfortable with the lineup where all the battles are won by young players or rookies, so I am betting he brings in a veteran or two or even re-signs an existing experienced player to make the transition more gradual.
The obvious consequence of a more gradual transition is that it will create quite a logjam of talented forwards in the system with no place for them to develop properly. In other words, some of them will deserve to play in the NHL, the Hurricanes won’t have room for them, and they will be at risk of over-ripening on the vine in Charlotte. It would not surprise me one bit if this is when see a real hockey trade happen (ie., Seth Jones for Ryan Johansen or Taylor Hall for Adam Larsson) to clear the backlog and obtain a higher-end player.
Regardless, accounting for all these transactions outlined above, GMRF will have $8.8-mil in cap space available and the salary cap flexibility to make an in-season or trade deadline deal or to bring in a veteran or two.
At the end of the 2019-19 season, the Hurricanes will have a different set of players with expiring contracts and more decisions to make.
UFA’s and RFA’s
Jeff Skinner – Skinner becomes a UFA after the 2018-2019 season and the biggest negotiation that will likely take place in the summer of 2018. Similar to the negotiation that is taking place right now between Garth Snow and John Tavares in New York, Skinner and Francis will need to work out his next contract. Skinner will be 26 years old, in the prime of his career, with one year remaining on his deal, and due a healthy raise if his production next season mirrors his production in 2016-17. And he will probably also be wearing a letter on his jersey. For the sake of this exercise, I have modeled Skinner’s new contract at $8.5 million per year, an increase of $2.8-mil per year.
Sebastian Aho – After resolving Skinner’s contract, extending Aho is likely to be high on GMRF’s priority list. I am assuming that Aho continues to develop his game, moves to center, and is a team leader in points and a primary driver of the offense. In other words, I have modeled Aho as becoming the 1C that many have been looking for in a trade this off-season, with a new contract at $7.5 million per year for a big increase of $6.6 million per year over his entry-level contract.
Justin Williams – Even if JW has been productive under the 2-year contract he just signed, he will be 37 years old which will make it difficult to offer him a contract with similar term. Yet the Hurricanes will still need to have a player who brings similar production. To keep it simple, I have modeled the cost of Williams’ spot at $5 million per year, an increase of $500,000 per year, which can represent an extension to JW or a new UFA signing.
Marcus Kruger – By this time, Kruger may likely be an expensive option compared to our growing horde of young center prospects, even if his defense and penalty killing is top-notch. I have modeled not re-signing Kruger and instead replacing him with a prospect center saving about $2 millionper year.
Brock McGinn – While on a very affordable contract, McGinn is going to need to continue to improve or be at risk of being replaced by a prospect with a higher ceiling (which is what I expect to happen). I have modeled the ‘Cap Neutral Case.’
Teuvo Teravainen – The kind of contract offered to TT will depend heavily not only on how he develops, but also on how much reliable scoring there is from our developing prospects or whether the team has added any other offensive pieces through trades. I have modeled TT’s extension at $4.5-mil per year, an increase of $1.625-mil per year.
Haydn Fleury – Fleury will be due a new contract if he has not been traded or was not extended in 2018 (similar to how Slavin was extended early). I’ve modeled $2.75 million for his slot, an increase of $1.9 million per year.
Projected Roster for 2019-20
Skinner / Rask / JWilliams or UFA
Aho / Staal / Teravainen
Middle-6 UFA / Necas / Lindholm
Kuokkanen or Gauthier / Roy or Saarela / Zykov
Slavin / Pesce
Hanifin / Faulk
Fleury or Bean / Van Riemsdyk or Bean
Dahlbeck or UFA
Booth or Nedeljkovic or UFA
* Prospects: Foegele, Gauthier, Kuokkanen, Necas, Roy, Saarela, Wallmark, Zykov, 2018 1st-Round Pick, 2019 1st-Round pick
After slotting some prospects into the lineup over the 2018-2019 season and then again this 2019-2020 year, the team continues to look extremely young and inexperienced even if highly skilled with significant upside, and in many ways our offense in 2019-20 is in the same place that our blue line is today – on the rise, but still not entirely proven.
It is important to realize how rare it is that Slavin and Pesce grew so quickly into a top pairing and not expect the same thing to happen on offense. Lightning does not usually strike twice. It is just hard to imagine what the team will look like. I think the main takeaway is this – there is plenty of NHL talent and the natural competition among players will surface the best players who deserve roster spots. The core roster and young players who emerge will be complemented by UFA’s to fill in the gaps or fill specific roles.
Coming back to the cap, there are fewer players on expiring contracts that will save the team money (i.e., Cam Ward in 2018) before the 2019-20 season, fewer Cap Neutral Cases, and big raises due to Skinner and Aho, pushing the team right up to and slightly above the cap ceiling. Of course, spending to these levels will only be possible if the team has started winning in 2018-19.
Further, and even if the team has started winning, it is not very likely that GMRF will enter a season with such limited cap flexibility, even if he feels he’s assembled the team capable of competing for the Cup. More likely, some players will not be re-signed or will be traded for futures making space available for prospects or veteran role players on lower contracts.
In summary, given all the assumptions listed above, the Hurricanes salary cap situation looks like this:
|Available Cap Space:||$16,337,501||$8,860,836||$416,669|
I am left with the following impressions:
1) Most encouraging: There is a path, though challenging, for keeping most of the Hurricanes’ young core together for the next three seasons even if key players perform and are due big raises. There will be a casualty or two along the way in the form of a trade or in a decision not to re-sign a player, especially on defense, but that is not in my model.
2) The Hurricanes are well-positioned to upgrade by trading an increasingly valuable pool of top-of-the-roster NHL-prospects. More than that, many will have trouble cracking the increasingly deep roster in Raleigh and may be at risk of stagnating in Charlotte, which will almost certainly lead to trades to clear the logjam. This process probably starts in 2017-18 if the team is a buyer at the deadline but almost certainly occurs before the 2018-19 season.
3) Despite the rumors, the Hurricanes do not seem to be the right partner to make a trade with Chicago to take on Marian Hossa’s contract because the Hurricanes will need the cap space in the out years for its core players. There was similar talk on this blog about trading for Henrik Zetterberg and his cap-heavy/salary-light contract, but the same logic would apply to him, too. Our days of dead cap space appear to be over.
4) If the Hurricanes do make a trade over the next year or two for a difference-making offensive player who comes with a large salary (ie., Matt Duchene at $6 million/year), this will put huge pressure on cap availability in 2019-20 and will force a trade or two of a player on a sizable contract (ie, someone popular and productive) to make room.
5) The Hurricanes are a candidate to be on the “good” side of a “Salary Dump” trade (ie, Marcus Johansson to New Jersey or Teuvo and Bickell to Carolina) but only if the salaries come off the books prior to 2019 and only if the player received helps win now.
All in all, going through this exercise left me extremely encouraged and hopeful. We are going to have “high-class” problems if our prospects continue to develop and our hockey team will not be at risk even if a few do not develop or turn out to have lower ceilings, which almost certainly will be the case.
It’s going to be fun to be a Canes fan over the next few years as this team matures together into the winner we’ve been waiting for.
What Say You Canes Fans?
The salary cap future will also be the topic in the Monday Coffee Shop, but here is probably the best place to discuss the assumptions, model and what is learned from it.
Do you see the Hurricanes leaning toward promoting prospects or using them in trades to improve the team / manage the cap over the next few seasons?
Which current NHL roster players, do you see being casualties to the youth movement and/or salary cap math over the next three years?
Who will be the Hurricanes’ top 6 on defense, in 2018-19 and 2019-2020?