After a run of daily articles that tracked and analyzed the day to day of the start of the Carolina Hurricanes 2017-18 season, today’s Daily Cup of Joe will take a bit of a diversion and look forward to next summer and the salary cap math that comes with it.
At a high level, the Carolina Hurricanes will inevitably see their annual salary commitment rise as a number of young players come off sub-$1 million entry-level contracts. The trick to balance things out will be some combination of back filling a few slots with new young players on entry-level contracts and more significantly increasing revenue by playing winning hockey and boosting attendance at PNC Arena.
The 2018-19 season actually offers some salary relief that will offset a few established and expected increases and make it possible to come close to holding the line on salary for one more year before heading upward.
2018-19 Carolina Hurricanes salary changes
NOTE: I am looking at ACTUAL salary (which is the more important number for the Hurricanes) not salary cap.
Buy out savings
Minus $2.5 million — Both Eddie Lack and James Wisniewski are being paid buy out amounts for 2017-18. Both of them will come off the books for the 2018-19 season making for a nice chunk of savings that does not cost the Hurricanes a player in the process.
Players coming off significant contracts
Minus $5.6 million — Lee Stempniak and Cam Ward are the only two players coming off significant contracts representing potential savings.
Jaccob Slavin and Brett Pesce
Plus $7.8 million — General Manager Ron Francis acted early in re-signing his two top defensemen this summer even though each was already under contract for the 2017-18 season. Jaccob Slavin’s salary will increase by $4.7 million to $5.5 million, and Brett Pesce’s salary will increase by $3.1 million to $4.0 million.
Other players with changing salaries (already under contract)
Plus $0.3 million — The Hurricanes have historically had a number of contracts that escalated year to year. The impact in this regard going from 2017-18 to 2018-19 is minimal. Justin Williams contract decreases by $1 million; Justin Faulk’s contract increases by $0.5 million; the part of Marcus Kruger’s contract that the Hurricanes will actually pay increases by $0.8 million. (Kruger’s 2017-18 salary included a big signing bonus that was paid by Chicago before Las Vegas and ultimately Carolina acquired him.)
Depth unrestricted free agents
Net effect $0: Derek Ryan, Joakim Nordstrom and Josh Jooris are all scheduled to become unrestricted free agents next summer. Regardless, of how their contract situations are resolved, the impact to total salary should be minimal. If they are re-signed, I would expect similar salaries. If instead they are replaced by youth or newly acquired players, there could be savings but not significantly so. Simplest is just to figure them in at a similar cost whether they return or not.
Netting out the reasonably straightforward stuff
Interestingly, when you net out those reasonably big ticket items, the net change is exactly $0. Essentially, the big raises due Jaccob Slavin and Brett Pesce are covered by a few players (and former players) coming off contracts. Wisniewski and Lack are pure savings for next year, but Cam Ward and Lee Stempniak will either need to be re-signed or replaced.
There is some uncertainty, especially with Ward, but I think a reasonable guess is that Stempniak will be replaced by a younger and less expensive player making $800,000 to $1,000,000 and that Ward will either be re-signed or replaced for a bit less than his current $3.1 million salary.
Plus $2.8 million: If we assume $2 million to re-sign Ward (could be higher if he has a strong season and takes on a bit more than a backup role) and youth in Stempniak’s slot, the salary is up about $2.8 million relative to 2017-18.
The three big wild cards – Noah Hanifin, Elias Lindholm and Trevor van Riemsdyk
Plus $4.5 million (with greatest possible range of outcomes): The biggest wild cards are a trio of restricted free agents who will all be due raises that in part depend on their 2017-18 season.
Noah Hanifin who is still on his entry-level contract is making only $925,000 will be paid more on his next contract. Exactly how much more has a pretty wide possible range. If he finds a higher gear scoring-wise and establishes himself as a solid top 4 defenseman, his salary could be in the Slavin and Pesce range (so let’s call it $4.5 million). If instead, Hanifin still has some ups and downs and a modest season scoring-wise, a bridge deal similar to Lindholm and Teravainen’s recent deals in the neighborhood of $2.5 – $3.0 million per year could be in order. Either way the increase will be significant.
Elias Lindholm who is coming off his second contract has a higher starting point at $2.8 million. With a modest season scoring-wise, Lindholm could see a modest raise up to $3.3 – $4.0 million. But if he nets higher production numbers offensively, he could suddenly push up to the $5-6 million range that is become more common even for middle of the roster forwards who score some.
Finally, Trevor van Riemsdyk likely sees his $825,000 salary roughly double with upside from there if he has a strong year offensively.
So how does it all end?
If I had to guess, Ward will be retained but at a lower rate in more of a pure backup role. Stempniak is replaced by a younger player.
The Hurricanes will not be high stakes players in the free agent market, so it is mostly a matter of replacing or retaining the players they have at a similar price.
My wild guess is middle of the road for all three restricted free agents with Hanifin having a decent 2017-18 but still slotting below Pesce and coming in at $3.5 million. I similarly think Lindholm will have a decent but not spectacular 2017-18 season and get a modest raise to $3.8 million. Finally, I think van Riemsdyk re-signs in a $1.4 – $1.8 million range.
When I add it all up, the net effect salary-wise is an increase of $7-7.5 million in salary importantly without making any free agency upgrades.
I will save the broader ramifications for another day, but I think the two biggest upshots are as follows:
1) It is vitally important that team winning growth matches up to player salary growth. If that happens, attendance should increase and help pay for the growing salary cost. If that does not happen, the math is really challenging for increasing costs but flattish revenues.
2) I think the upward cost pressure from the existing roster will limit Francis’ ability to make expensive additions. This will make it very important for the team to be able to back fill a few roster slots and ideally even find another difference-maker from the ranks of the inexpensive prospect pool which is largely on entry-level contracts.
What say you Caniacs?
1) Did I mess up any math finishing this up late at night after the Calgary game?
2) What is your guesstimate for salaries for Lindholm, Hanifin and van Riemsdyk’s next contracts?
3) Of the two biggest contracts coming off the books, do you see Ward and/or Stempniak being re-signed next summer?