This time of year, financial terms are bandied around regularly. Yesterday the NHL officially announced a 2016-17 salary cap ceiling of $73 million and a floor of $54 million.
With $ in the news, here are a few things on the Canes front financially:
Misconception that the Canes need to add players to reach the salary cap floor
I have seen this assertion in a few places. It is not correct. General Fanager has the Hurricanes salary cap hit at $48.3 million and needing to add $5.6 million to reach the minimum. But if you first swap in Sebastian Aho and swap out Derek Ryan, that adds $300,000. If you then budget $3.5 million for Victor Rask and $1 million for Ryan Murphy, both of whom are restricted free agents, the total jumps to $53.1 million which leaves only $900,000 to add a final forward to get to 13.
If Rask and/or Murphy come in cheaper, it could give the Canes $2 million to reach the cap floor, but it is not as if Francis needs to go on a shopping spree to reach the minimum. Whatever the Canes spend/Francis does will be dictated by internal budget much more than either salary cap boundary.
Once Canes do reach the floor, cap hit is completely irrelevant – only actual salary matters
Once the Canes do reach the floor, salary cap becomes completely irrelevant for the 2016-17 season. The team’s internal budget will be far short of the ceiling which is a full $19 million higher. The impact here is twofold. First, whenever a writer (usually from another market) starts talking about how the Hurricanes could do this or that because they have salary cap space, that is not completely true. The real $ matter. That is why I predicted a couple weeks back that Francis would swing a deal to collect a small amount of future assets in return for taking on Pavel Datsyuk’s contract. Since there would be no real salary and the Canes can easily fit the salary cap hit, it would be a no-brainer to collect something for providing this service.
In that regard, Justin Faulk’s contract is often talked about incorrectly
People often talk about Justin Faulk’s $4.8 million cap hit as being a bargain. In the totality of his contract, that is absolutely true. But that discount was fully baked into the first 2 years of his deal when he earned only $2.5 million in 2014-15 and $3.5 million in 2015-16. The discounted part of his contract has been used up. When you look forward, Justin Faulk is scheduled to earn $5.5 million for 2 years followed by $6 million for 2 years which makes for an average salary of $5.75 million. Based on some recent deals and looking at only what is left on Faulk’s contract, his average (actual) salary is $5.75 million, and he is pretty fairly paid relative to similar players.
Another way to say this is that Faulk’s deal was discounted only in 2015-16 in terms of actual salary but is discounted for the remainder of the contract in terms of salary cap hit. But again, right now, salary cap is irrelevant to the Hurricanes.
But next summer Francis could need to add players to reach the minimum
For the first time since becoming GM, Ron Francis entered the summer with a decent amount of budget to spend. In the interesting move to add Teravainen and Bickell as a package, Francis actually pushed some of that money forward. By investing a significant chunk of that money ($4.5 million) in Bryan Bickell, Francis essentially pushed that budget out to the 2017-18 season in return for adding Teravainen.
But when you look at the Canes roster, all of Ron Hainsey, James Wisniewski, Jay McClement and Bryan Bickell will come of contract. This set of players represents a significant $13.5 million in salary cap. That is a significant amount of money that Francis must somehow add back into his cost structure in short order. New contracts for RFAs Phil Di Giuseppe and Teuvo Teravainen will add some salary cap, but Francis will need to add 4 players next summer at an average cost/cap hit of $3.4 million. If the young defensemen continue to develop at the NHL level, the cost to fill mostly bottom half of the roster players could be much less than that. The result could be the need to add a higher-end player or 2 to make it to the league minimum. This changes somewhat if the Canes add a higher-end forward this summer who is under contract for next year and beyond, but there is still going to be a bunch of money freed up next summer.
Go Canes!
Francis, Tulsky, and our capologists are also probably looking at which teams will be in a cap crunch ,and if any of them have a top 6 forward or two we could get cheap when it gets closer to the first day of the season.
Agree. These days, the best ‘bargain shopping’ often occurs in Nov/Dec when teams fail, GMs are unhappy and they get stupid. There is no way anyone would have predicted that Ryan Johansen would suddenly become available last season.
If he doesn’t sign a significant forward or two, this team will fail to improve, and the increased interest in the team and higher tik sales will disappear pretty fast… This is not the time to be CHEAP! He already blew an opportunity to upgrade our porous goaltending situation, if we don’t have a lot more scoring…we’re in purgatory again… and my patience is NOT everlasting!
Signing a significant forward or two is not as easy as just offering them a lucrative contract, they have to be interested in coming here in order to even entertain an offer. Trading for one is a bit easier as long as they don’t have a NTC. Concerning the goaltending I will at the very least wait until camp opens before flaming Francis on this. Ward’s new contract does 2 things. First it gives us an experienced goaltender who’s numbers improved over the course of the season behind a very young defense and ultimately we know what we are going to get in terms of performance. Second the money and term are not so outrageous that if things are not going well we couldn’t off load him at the trade deadline to a team looking for an experienced goaltender with a pretty good track road in the post season. As you said though adding scoring is going to be the key to improvement. It doesn’t matter how many good your goaltending is if you can’t score more than 2 goals a game consistently.
Let’s see what Draft weekend brings then I we may perhaps see some movement that everyone can get excited about.
Very much agree.
Even after draft weekend, it way too early to judge Francis’ summer. Last summer, he made his best deal by exercising patience and capitalizing on another team in a desperate situation when he added Versteeg and Nordstrom and actually got Blackhawks to give up the higher pick/prospect in the futures swap that went with it.
There should be more of those opportunities this summer, so making final decisions on Francis’ summer even if he does nothing but draft prospects this weekend would be premature.
Do not go after Yakupov (spelling) from Edmonton, he is not worth even one lower draft pick.
I still want Matt Duchense if it can be pulled off for a reasonable price.
Hall or Hopkins from Edmonton would be a nice fit.
Do NOT bring in Rick Nash, overrated.
If you consider Dyasuk cap hit from Detroit, better include a top 6 forward prospect or existing top 6 forward.
I am not a Ward fan, but two years is fine after what I am reading about Anderson and Toronto (with this signing, they are going against their commitment to grow from within, be patient and going back to what they do best, stinking up the league and signing average players to pathetic contracts (sounds like Rutherfird for the past 7 years with Canes).
Canes should not deviate from plan no matter what fans think, I will be patient this year and next (been patient this long with that idiot Rutherford, his awful draft picks and awful contracts for average players).
Would love to see us select Brown, Keller or Bellows with first (hoping Brown).
Also, Guathier, Jones it Kunin.
Would love to move up for Thachuk!!!