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.
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
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) /
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) /
Miikka Kiprusoff ($5.833m)
Henrik Karlsson ($0.863m)
(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.
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.