The Flames and the New CBA

Kent Wilson
August 29 2012 11:33AM

 

 

As the collective bargaining agreement talks between the players and owners finally begin to heat up, potential outcomes and consequences for the Calgary Flames as a result of a new deal and/or lock-out are starting to take shape. If the season is delayed or erased entirely, there could be interesting repurcussions at either end of the roster. In addition, the team may face some difficult decisions in the wake of a new, lower salary cap. 

Flames Payroll

Let's start with the second point first. Although we can't be certain at this point just want specific form a new CBA will take, the recent offer by the NHL to the players union gives us a useful framework around which we can build some assumptions. According to Kevin Allen, the NHL recently proposed a 6-year deal where the players cut of (redefined) hockey related revenues would hover around 50%. That translates to a $58M cap ceiling in year one, growing to a $71M cap in year six.

While there is bound to be a fight over the owners altering HRR in order to reduce the players slice of the pie, it's a safe bet at this point that the labor side will be taking less of the whole, however it is defined down the road.

What is relevant for the Flames is the fact that the current proposal does not include an immediate roll-back of salaries, meaning teams over the cap would have to become compliant through some other method. Greg Wyshynski suggests things like amnesty buy-outs, a recalculation of cap hits or renegotiation of contracts as potential answers, and while Calgary would certainly like to buy-out some of their worst contracts without penalty (*cough* Stajan and Babchuk *cough*), the fact is that may not be enough to get them comfortably under a new cap. 

Calgary currently sits at about $67M - one of the priciest rosters in the league - give or take a few hundred thousand depending on which fringe players make the team. Even if we grant a new cap of $60M and assume the club can buy-out Stajan ($3.5M) and Babchuk ($2.5M) that nevertheless leaves them more than $2M in the red:

CAPGEEK.COM USER GENERATED ROSTER
My Custom Lineup
FORWARDS
Alex Tanguay ($3.500m) / Mike Cammalleri ($6.000m) / Jarome Iginla ($7.000m)
Sven Baertschi ($1.425m) / Roman Cervenka ($3.775m) / Jiri Hudler ($4.000m)
Curtis Glencross ($2.550m) / Mikael Backlund ($0.725m) / Lee Stempniak ($2.500m)
Tim Jackman ($0.613m) / Blair Jones ($0.650m) / Blake Comeau ($1.250m)
Lance Bouma ($0.693m) /
DEFENSEMEN
Jay Bouwmeester ($6.680m) / Dennis Wideman ($5.250m)
Mark Giordano ($4.020m) / Chris Butler ($1.250m)
Cory Sarich ($2.000m) / T.J. Brodie ($0.742m)
Derek Smith ($0.775m) /
GOALTENDERS
Miikka Kiprusoff ($5.833m)
Henrik Karlsson ($0.863m)
------
CAPGEEK.COM TOTALS
(these totals are compiled without the bonus cushion)
SALARY CAP: $60M CAP PAYROLL: $62,093,749; BONUSES: $3,636,250

If the new CBA reframes the way bonuses are applied to the cap, allows some renegotiation of contracts or alters the way salary is considered in the calculation (say the actual yearly salary is taken rather than the average salary over the course of the contract) then the Flames won't have to make to do much more than pay guys like Stajan to go away.

If those things don't happen, however, and there is no roll-back of salaries, things could get...complicated. Greg also mentions the possibility of a dispersal draft in the Puck Daddy link above - if that happened, who should the Flames allow to get poached?

A Lock-out - Good and Bad

On the other end of things, if the CBA doesn't get polished before April rolls around, the club won't have to worry about their cap issues because they will have 7 UFA's/RFA's to manage instead. Not the least of which is Jarome Iginla, who is on his last year of a deal paying him $7M annually. In July 2013, Iginla will turn 36 years old and may be looking to end his career with a team that is closer to winning than it is rebuilding.

Even if Jarome wants to stay in Calgary, it puts the team in a serious quandry - at 36 and given his deteriorating performance over the last few years, he'll be a huge risk to re-sign (particularly if this CBA retains the 35+ clause that ensures contracts for older players stick to the payroll like glue). In addition to being another year closer to retirement, the club will also be a year removed from his most recent NHL performance, meaning it will be difficult to project his potential output in his 36-37 year old season and beyond.

The risk of losing Iginla for nothing or re-signing him to a problematic contract multiply exponentially if the season is wiped out by CBA negotiations.

The loss of a 2012-13 season may mean Kipper's era in Calgary will end with a whimper rather than a bang as well. Miikka's contract was assumed to be his retirement deal when it was signed under Darryl Sutter owing to the severe tail - he is slated to earn $5.0M in real dollars this year and just $1.5M the next. After banking $33.5M over the main body of the deal, it's entirely possible at 37 years old and Kiprusoff will forgo his final, nominally paid season and retire back to Finland. Particularly if the Flames consider dealing him (as they probably should). 

So no 2012-13 could mean the Flames lose the last meaningful seasons of their two enduring stars for nothing.

On the other hand, there would be some benefits as well - Anton Babchuk's contract ends after this year and Stajan draws one year closer to free agency (making him a cheaper buy-out). Chris Butler and TJ Brodie could also be re-signed fo a dime since they wouldn't have 2012-13 to improve their leverage.

In addition, guys like Lance Bouma, Max Reinhart and Sven Baertschi could develop their games in an AHL that is bolstered with NHL-ready talent. In 2004-05, several high-end kids were able to polish their game in the minors during the lock-out, including Eric Staal (19 years old, 77 points), Jason Spezza (117 points, 21 years old), Mike Cammalleri (109 points, 22 years old), Thomas Vanek (68 points, 20 years old), Patrice Bergeron (61 points, 19 years old) and Kyle Wellwood (87 points, 21 years old). Many of these guys jumped back into the big league the next year more or less fully formed suggesting they benefitted from a year competing in a league that was only marginally removed from the bigs*.

*this isn't as true of the regular, non-lock-out version of AHL since much of talent is hoovered up by NHL via promotion or injury call-ups.

A year of solid development for the kids against decent competition without having to suffer through their growing pains at the NHL level is a good thing. Of course, this doesn't necessarily put the Flames any further ahead than anyone else since every other team's near NHL-ready kids will be doing the same thing, but having a guy like Baertschi take a big step out of the lime light isn't a terrible thing from any angle.

Conclusion

We're still a long ways away from knowing which issues the Flames will have to deal with - new cap realities or lock-out related consequences. One the good side of things, the Flames may be given a chance to opt-out of some of their contractual errors through renegotiation or amnesty buy-outs. They may also have to get creative in their accounting if the cap falls without an associated roll-back.

If the labor strife draws out long-term, then Calgary may have to consider life without Iginla or Kipper. They could benefit from the erasure of other bad deals, however (Babchuk) as well as added time in an improved development environment for some of their higher end prospects. 

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Former Nations Overlord. Current FN contributor and curmudgeon For questions, complaints, criticisms, etc contact Kent @ kent.wilson@gmail. Follow him on Twitter here.
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#1 suba steve
August 29 2012, 01:14PM
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I can't imagine a new CBA being signed without a salary rollback. Happened last time, players are ready for it again. So unless there is some other MAJOR concession(s) by the players, it will happen again.

As for the Flames shedding some bad contracts, big red herring. As soon as they rid themselves of one "bad" deal they will replace it with another.

Example: Sarich's rich deal replaced by another rich deal for Sarich. Now, I don't hate Sarich, just confused as to why we had to give him $4 million to keep him for 2 years. Is this indicative of a weak GM? I'm not ready to make that claim yet, every other team has a few deals they would love to be rid of as well. Hoping that coach Hartly can make effective use of Sarich (and Babchuk, etc.) to make his GM look a little less spendthrift. Also hoping Feaster contributes to making himself look good by not signing those types of deals as frequently.

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#2 Michael
August 29 2012, 02:38PM
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'Even if Jarome wants to stay in Calgary, it puts the team in a serious quandry - at 36 and given his deteriorating performance over the last few years, he'll be a huge risk to re-sign'

I agree, but I'm not sure that the owners do...they have made it cristal clear that they want Iggy to retire in a Flames jersey, so that likely means a extention to age 40, with a fat retirement contract.

If the Flames have to reduce to a lower cap, the owners are unlikely to move Iggy, we don't have a Kipper replacement (or even an established backup), so unfortunately, JBo may be the one to move.....

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#4 RexLibris
August 29 2012, 03:50PM
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Discussing this at length today and the person I spoke with was saying that the Flames could solve nearly all their cap issues just by letting Iginla walk.

I said that they (meaning management and more specifically ownership) wouldn't let that happen and that if they move anyone it will be Bouwmeester.

If they did it would be a "cutting off one's nose to spite the face" move, but I think I've given up on finding rational motives for this group.

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#5 RexLibris
August 29 2012, 04:42PM
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Looking at the cap numbers that the owners were talking about today, and comparing them to the cap situation of the Flames (and for the record, the Oilers wouldn't be in any rosy position either), the contract size and terms offered up to Hudler and especially Wideman, look very uninformed now.

This might all change, but if this agreement were to be done today, as you have said Kent, even if the Flames were to buy out Stajan and Sarich, that is only a small portion of the financial issues that face this team over the next few years.

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#6 RKD
August 29 2012, 10:38PM
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If the whole season got cancelled, it would be really interesting to see what happens to Iginla.

The worst scenario would be to lose both Kipper and Jarome for nothing.

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#7 Reidja
August 29 2012, 11:25PM
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suba steve wrote:

I can't imagine a new CBA being signed without a salary rollback. Happened last time, players are ready for it again. So unless there is some other MAJOR concession(s) by the players, it will happen again.

As for the Flames shedding some bad contracts, big red herring. As soon as they rid themselves of one "bad" deal they will replace it with another.

Example: Sarich's rich deal replaced by another rich deal for Sarich. Now, I don't hate Sarich, just confused as to why we had to give him $4 million to keep him for 2 years. Is this indicative of a weak GM? I'm not ready to make that claim yet, every other team has a few deals they would love to be rid of as well. Hoping that coach Hartly can make effective use of Sarich (and Babchuk, etc.) to make his GM look a little less spendthrift. Also hoping Feaster contributes to making himself look good by not signing those types of deals as frequently.

Add to the list of "those type of deals" Hudler and Widman IMO. I think Featser is quickly moving past the "everyone has those types of deals" territory and into the WTF?!? territory. 3 of our top 7 defenseman have those types of deals and I'm not including JBo (obviously not Featser's doing).

He has juiced some other guys out of money though... Backlund at

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#8 Reidja
August 29 2012, 11:27PM
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@Reidja

Sorry, post was cut short. Backs at less than $1 MM for 1 year shocked me. We'll see how that ends up later I guess.

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#9 RexLibris
August 30 2012, 12:06AM
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@Reidja

Sadly, (at least for Flames fans) the money he saved on Backlund he spent with interest on Wideman and Hudler. Penny wise and pound foolish.

I have to wonder if the Flames being run by Feaster won't eventually be categorized as a Out of the Frying Pan (Sutter) and into the Fire (Feaster).

His improvements to the team by trade in Cammalleri and Jones came at the cost of overpaying to get rid of Regehr and Bourque (in my opinion) and any money he saved on moving Regehr and scalping Backlund was spent on long-term contracts for the two mentioned earlier.

What would happen if Backlund's performance and the need to re-sign Iginla to contracts next year are both hampered by the impact of those two cap figures in Hudler and Wideman to the extent that the Flames end up having to let Backlund go because they can't afford him and ownership's loyalty to Iginla makes him the priority? (sorry, run-on sentence there).

In suba steve's point about Sarich, if he is essentially a replacement for Hannan then why the overpayment in dollars and term? Not to mention the (wait or it...) NMC until Dec 2013?

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#10 Kevin R
August 30 2012, 12:25AM
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Well, Wideman is an improvement in the top 4 d going into hopefully a year in hockey. Risky $$$ when there is uncertainty of the CBA & Cap moving forward. But, you just cant pin the tail on the Feaster piniatta alone. I've seen a lot of contract extensions for players with still a year left for significant more $$$$, Edmonton, Philly, Ottawa today. Seems to me, there doesnt seem to be any fear in the $$$ value of these contracts being doled out by GM's who are obviously getting the green light from upper management to do this stuff. Maybe one of the big concessions owners are dangling to get that bigger piece of the Revenue pie is that the real $$ of the contracts in place will be grandfathered & reduced through some formula to equate to actual cap hits for the length of the new CBA agreement, which the way 6 year deals are getting doled out will probably be the length of the new deal.

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#11 uh-ohhh
August 30 2012, 09:06AM
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Just a quick shout out, is anyone else at all a little bit scared of us having gotten rid of Patrick Holland in the Cammi trade?

We tout Sven as our savior because of his performance in the whl, but what about Holland?

2011-12 Regular Season Tri-City Americans 72 25 84 109 42 48

that 109 pts in 72 games translates to a 1.51 ppg total, which seems to me to be pretty damn good!

Just a thought.. Kent any thoughts here?

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#12 uh-ohh
August 30 2012, 09:08AM
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Oh yeah and a +42 and he is also 6'

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#13 PrairieStew
August 30 2012, 09:17AM
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Under a $70m cap the Wideman and Hudler deals are fine. Wideman's is about the same as the $3.5 m Hamrlik was paid coming out of the last lockout. You always pay for UFA's. Since the owners knew they would be looking at a salary rollback, those will be adjusted if the cap goes down. The owners who allowed their GM's to pay huge signing bonuses ( which can hardly be called signing bonuses since they are paid annually) that may not subject to rollback, those are going to hurt.

Backlund is what he is, coming off his entry level and a poor statistical season, that's his value in the market and it is not a brilliant move by any stretch, just a competent one. The risky move would be to lock him in and find out he never establishes himself as a regular NHL player.

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#14 Steve
August 30 2012, 10:22AM
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uh-ohhh wrote:

Just a quick shout out, is anyone else at all a little bit scared of us having gotten rid of Patrick Holland in the Cammi trade?

We tout Sven as our savior because of his performance in the whl, but what about Holland?

2011-12 Regular Season Tri-City Americans 72 25 84 109 42 48

that 109 pts in 72 games translates to a 1.51 ppg total, which seems to me to be pretty damn good!

Just a thought.. Kent any thoughts here?

I was disappointed at the time. Shortly after the trade, Tri-Cities played in Calgary, and I already had tickets because I wanted to see him live. Maybe I was biased because he was no longer Flame property, but he was thoroughly unimpressive in that game.

He played on a very good team, played D on the power play, piled up a lot of points, but I really don't think he'll ever become an NHLer. He seemed really slow, and didn't generate anything himself. He was a good value 7th round pick, but that just means instead of a .1% chance of making the NHL, he's got maybe a 1% chance. All things considered, I now really like the trade.

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#15 RexLibris
August 30 2012, 10:45AM
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@PrairieStew

I'm reading from several sources that a rollback has been dropped from the owner's list of demands. This has raised some concerns in Edmonton as it relates to the contract extensions of Hall and, imminently, Eberle.

At this point I don't believe there will be an amnesty clause involved. Perhaps some waiver exemptions such that a player could be demoted allowing them to still be paid their contract without it counting against the cap, but contractual clauses would have to overrule any special dispensation from the league.

If the players were to turn around and agree wholly to the owner's proposal from yesterday it would create some serious headaches for many of the NHL GMs. The Luongo and Lecavalier contracts could become the DiPietro and Yashin contracts of the new CBA era.

I know that on the surface this stuff can be a boring as a 2nd grade piano recital, but when you start to get into consequences and long-term effects, this gets pretty interesting.

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#16 loudogYYC
August 30 2012, 10:49AM
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@uh-ohhh

I would have preferred if Feaster didn't include any prospects in that trade, but Montreal did take 4 years of Rene Bourque off our hands... If Holland turns out, he'll probably be a bottom 6er, Calgary's got lots of those. I still think the trade was a huge win for the Flames.

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