Why The Flames Won’t Be Buying Anyone Out

In what’s become an annual tradition, now that the Stanley Cup playoffs are completed, it’s almost buy-out season. The league-wide buy-out window opens later today, 48 hours following the completion of the Final series – though logistically, the earliest anybody would throw a player on unconditional waivers would be early tomorrow morning anyhow.

And in what has become an annual tradition, now that compliance buy-outs are over with, you will notice that very few NHL teams actually buy players out. And I’ll be bold enough to definitively state that I don’t think the Calgary Flames will buy anybody out, despite having a few contracts that seem a bit on the heavy side for what each player brings to the table.

For a bit of a glimpse of why the Flames won’t be buying anybody out, let’s take a quick walk through the options and the contracts likely under consideration.

THE MECHANISMS AVAILABLE

Let us say you’re a general manager named, say, Jay Feaster. You messed up, and you gave a player a deal for too long and for too much money. There are three mechanisms available for you to bail yourself out of this jam.

  • The Ordinary Course Buy-Out: If a player is not yet 26 years of age, then he will be paid one-third of his cap hit for twice the years he has remaining. If a player is 26 years old or older, then he gets paid two-thirds of his cap hit for twice the years he has remaining.
  • The Retained-Salary Trade: If you don’t want to buy a player out, you can trade them and retain up to half of their salary. I believe you can only have two retained salaries on your payroll at a time, though.
  • Burying The Player In the AHL: You can bury a one-way contract in the American Hockey League if all else fails. You only get $925,000 in cap relief as a result, but it’s better than paying them to play against your NHL team. And since you’ll likely need to throw your player on the waiver wire before they can go to the AHL, there’s a (small) chance that another team will take him off your hands.

Let’s examine six problem contracts in the context of these three potential remedies to bad, bad contracts. Everyone mentioned here is over 26, so everyone would get paid two-thirds of their cap hit if bought out.

DENNIS WIDEMAN

Current deal: $5.25 million cap hit through the end of the 2016-17 season

  • If He’s Bought Out: His cap hit is reduced to $3.5 million, but it also drags on for two more years (through 2018-19). The Flames only recover $1.75 million in cap space, though.
  • If They Retain Salary: His cap hit is reduced to $2.625 million and doesn’t drag on more than it does already, giving them $2.625 million cap relief. The Flames would be paying him to play elsewhere, but not quite as much (and not for as long).
  • If They Bury Him In the AHL: His cap hit takes a slight dip down to $4.325 million, giving the Flames a teeny, tiny $925,000 relief.
  • The Best Move: If they can find someone willing to make a trade, eating half his salary would be the easiest way to clear cap space in a hurry.
  • The Likely Move: I doubt they can find someone willing to take on Wideman at full freight, and to be honest, his play last season probably earned him a bit of lee-way heading into this season. But if he disappoints, I could see them exploring a move as the season wears on.

DAVID JONES

Current deal: $4 million cap hit through the end of the 2015-16 season

  • If He’s Bought Out: His cap hit is reduced to $2.667 million, but is extended through 2016-17. The cap savings is just $1.333 million.
  • If They Retain Salary: His cap hit is reduced to $2 million, giving the Flames $2 million in cap relief. Sure, he’s playing elsewhere, but that cap savings is solid.
  • If They Bury Him In the AHL: His cap hit is reduced just a bit, down to $3.075 million, a reduction of just $925,000.
  • The Best Move: Like with Wideman, exploring a trade with retained salary is the best bet here.
  • The Likely Move: Honestly, considering how well he played when he was healthy and that he only has a year left on his deal, I’d be shocked if the Flames did anything in regards to Jones. If he leaves the organization, most likely it’s as a free agent next summer.

LADISLAV SMID

Current deal: $3.5 million cap hit through the end of the 2016-17 season

  • If He’s Bought Out: His cap hit is reduced to $2.333 million, but extended through 2018-19. It does result in a cap savings of $1.167 million, but that cap hit and length is pretty rough.
  • If They Retain Salary: His cap hit is reduced to $1.75 million, a savings of $1.75 million, and the hit isn’t spread out anymore than it already is.
  • If They Bury Him In the AHL: His cap hit is reduced to $2.575 million, reducing the cap hit by $925,000.
  • The Best Move: Again, exploring a trade is probably the best option, albeit an unlikely one.
  • The Likely Move: If Smid is fully healthy, I’d expect him to ride out the rest of his deal either as Calgary’s sixth defenseman…or in the press box.

DERYK ENGELLAND

Current deal: $2.917 million cap hit through the end of the 2016-17 season

  • If He’s Bought Out: His cap hit is reduced to $1.945 million, but extended over four seasons instead of the remaining two. The cap savings is just $972,000 per season.
  • If They Retain Salary: His cap hit is reduced to $1.459 million, a savings of $1.459 million.
  • If They Bury Him In the AHL: His cap hit is reduced to $1.992 million, a savings of just $925,000.
  • The Best Move: Retaining salary in a trade is the easiest move, though relatively unlikely.
  • The Likely Move: They’ll ride his deal out. Aside from his awful possession stats, he’s highly-valued by the team’s coaching staff and management.

MASON RAYMOND

Current deal: $3.15 million cap hit through the end of the 2016-17 season

  • If They Buy Him Out: His cap hit is reduced to $2.1 million, but extended for twice as long as is remaining on the deal now (four more years). The cap savings is $1.05 million.
  • If They Retain Salary: His cap hit is reduced to $1.575 million, a savings of $1.575 million.
  • If They Bury Him In the AHL: His cap hit is reduced to $2.225 million, a savings of just $925,000.
  • The Best Move: Again, retaining salary would be the best bet.
  • The Likely Move: I could see them looking at trade options for Raymond, particularly give his cap hit and that Sam Bennett could potentially make him redundant if they start him on the wing.

BRANDON BOLLIG

Current deal: $1.25 million cap hit through the end of the 2016-17 season

  • If They Buy Him Out: His cap hit is reduced to $833,000 for each of the next four seasons, producing a cap savings of $417,000 in the first two seasons.
  • If They Retain Salary: His cap hit is reduced to $625,000, a savings of $625,000.
  • If They Bury Him In the AHL: His cap hit is reduced to 325,000, a savings of $925,000.
  • The Best Move: If the Flames really don’t want Bollig on the NHL roster, he’s cheap enough that they can probably facilitate a trade. However, burying him in the AHL would be a simple and effective move if they were in a pinch. And heck, he might even get picked up off waivers before he gets sent down anyway.
  • The Likely Move: Bollig will have tougher competition for a roster spot and a regular line-up spot next season than he did this past season, but it’s not like he’s in any danger of being sent away. If he has a bad camp, then I’d be worried for him.

SUM IT UP

Even when we examine the six worst deals on the Flames – relative to each player’s position on the team and productivity – there is never a situation where buying a player out is the best bet. In terms of finances and logistics, often it’s the worst way to open up cap space.

I strongly, strongly doubt that the Flames make use of any buy-outs when the window opens later today. There are better options available.

  • OKG

    A few other factors:

    -Smid’s cap hit is less of an issue if he’s indeed placed on Long Term Injured Reserve

    -Raymond probably won’t require 50% retained salary to move

    – Jones can play out 2015-16 and then potentially be moved at the deadline for picks/prospects

  • Parallex

    Really the simpliest answer to the topic is that there are zero reasons to buy anyone out. The Flames don’t need cap space right now and they aren’t poor… however they may need cap space later so simply retaining someone (even someone you’d rather not have) for another year at their full ticket cuts the amount of time they may have to payout later (via Buyout) on the cap by half.

    On a semi-related note The Islanders are finally no longer paying Yashin.

    • Parallex

      IMO David Jones is a buy out candidate. He will return you nothing but a bag of pucks at trade deadline and he is taking up a valuable development position for one of our big wingers!

      • Greg

        I don’t know how much you would get for Jones at the TDL. A bit more than a bag of pucks for the right purchaser though. He did play reasonably well when he was healthy.

        But Jones is the least likely buy-out candidate of the bunch! His contract ends at the end of next season so why the hell would you buy out a player whose salary is coming off your books just when you need it to?

        The only reason his name appears here is because he has a salary that is disproportionately high relative to his perceived value. Love him, hate him, don’t care one way or another – there is no reason to buy out this contract.

        • The GREAT Walter White

          I believe you answered your own question in the last paragraph.

          A healthy organization regularly makes room for young prospects along with a nice balance of veterans. For a rebuild organization I don’t believe we require a $4M checker and hard worker. We have plenty in the minors who can stay healthy and give you same return.

      • The GREAT Walter White

        We got a 2nd and a 3rd for Glencross, I think we can get at least as much for Jones who is bigger and more physical, pucks don’t die on his stick, also has a 27 goal season on his resume, is a right hand shot, and a relatively decent possession driver despite tough QoC.

    • Burnward

      Why? I don’t see any reason for us to use assets to acquire a young goalie that hasn’t proven anything yet. Is he the next Ben Bishop? Pretty big odds the answer to that is no.

      Lots of talk about Ramo nor Hiller being here & that surprises me somewhat as well. Maybe that’s where the Lehner talk is coming from but quite frankly I would rather go with the devil I know, either Ramo or Hiller than the devil I don’t.

      In my usual overactive armchair GM thinking, I wonder if San Jose would consider Hiller. I hear Anderson is the one they are tire kicking out of Ottawa & I really have no idea what Ottawa would want for Anderson, but I doubt they will give him away. He’s older than Hiller & he has 3 years at a similar cap hit compared to 1 year left for Hiller. Could we possibly trade Hiller, our #15 & our #53 to San Jose for the #9. Resign Ramo for a comparable money that he was getting before for 2-3 years & ride Ortio & Ramo next year. Gilles will need at least 2 years in the AHL & Macdonald is probably another year in junior before heading to the AHL as well. We also get some time to see if Ramo has a higher ceiling than Hiller & what we really have in Ortio at the NHL level. At 9th we get ourselves one of the top 3-4 future stud Dmen in this draft. San Jose get a 1 year test drive with Hiller, a very good player at 15 & another very good player at 53. versus what would Ottawa want for Anderson. Who I think is a very comparable goalie to Hiller. It probably is prudent BT is checking into costs of available goaltenders in the market.

  • The GREAT Walter White

    Not your best work Ryan; you are really stating the obvious here……..

    We don’t need the cap space this year and most of these players have actual trade value.

    WW

  • OKG

    Wow the new buyout rules are crazy. To buy Wideman out you pay a total of 14 million. To have him play just 10.5. Veteran buyout is finished. No way a +26 buyout makes sense in any situation now.

    A guy like Jones could be trade bait at the dealine.

    If you cant trade any of these you may as well put them on the farm if a prospect pushes them out. Look at the value proposition especially for a player in like circumstances to a Raymond. Raymonds cap hit makes a buy out an impossibility from a value perspective. The cap hit is basically the same for buy out and demotion. Might as well get some value from him playing in Stockton and mentoring young players.

    • Jeremy

      I think we’re all misreading the buyout clause.

      A 26 + player with 2 years left and 5 mill remaining on his contract would as I read it receive 6.66 mill in total, spread out over double the term of the remainder of the contract. That would mean cap hits for 4 years of 1.665 million per.

      Or am I misreading Capgeak.

      • Greg

        Yup, unless it’s changed in the new CBA (and become more illogical for some bizarre reason), your formula is correct.

        It’s 2/3rds of the money left owing, and that amount is spread out over twice the length of time remaining. For simplicity sake, take a player making $3M per year, with 2 years left.

        Total money owed is $6M, so 2/3rds to buy out is $4M.

        2 years left means that $4M is spread out over 4 years.

        Final cap hit is $1M per year for the next 4 years.

        Your cap savings is $2M per year for the duration of the contract, but you’ve also lost $1M per year in cap space for the 2 years after the contract would have ended.

        That’s a much bigger cap savings than this article implies, so pronouncing the end of all buyouts is a pretty faulty assumption.

        • Greg

          Maybe it changed, but if it did this “new” buyout method would make no sense. It creates a larger cap hit then the actual $ spent, so the teams wouldn’t like it, but neither would the players (less money available in their total pool). Can’t see why it would change to this if neither side would have wanted it in the CBA changes.

  • OKG

    What this really comes down to is that it is okay to overpay in salary but not in term; you can’t sign place holders for more than 1 year at a time. Flames overpaid Eng in both $ and term, they could have signed him for the $ and one year i doubt he was being offered that kind of money elsewhere.

  • OKG

    There is no way any of these guys are buyout candidates. Anyone posting this doesnt get the value.

    Example. Demoting Wideman freesup approx .9m. Buying him out frees up 1.7m. A difference of .8m. How is savings of .8m in cap space worth paying 3.5m for an additional two year. I cannot envision such a scenario. Additionally a buyou means that you better have a roster replacement for under 1.7m otherwise you end up paying more than Widemans salary for him to play for another team.

    +26 buyouts do not make any sense at all. Look at Mike Richards. That buyout would be a nightmare.

  • OKG

    If I am not mistaken there is a error on the butout calculating that has been done in this blog, which if I’m not mistaken was the purpose.

    Sideman should be a cap savings of 3.5m with a cost of 1.75m per years for 4 years. Not the opposite.

  • Greg

    As an example, wideman’s cap hit doesn’t drop from $5.25M to $3.5M and stay there twice as long. Wouldn’t make a lick of sense if you paid out $7M of his remaining money, but somehow got saddled with a $14M cap hit over 4 years.

    Actual numbers are:

    Still owed $10.5M (assuming he’s paid the same each season, I don’t know if that’s actually the case).

    2/3rds of that is $7M, but it now gets spread over 4 seasons makes it a $1.75M cap hit. So that’s actually a cap savings of $3.5M for the next 2 years, which is more significant than the $1.75M stated in the article.

    Of course it comes at the cost of having a $1.75M cap “penalty” in years 3 and 4 (not to mention paying $7M for some to NOT play for you). It’s something you consider if you’re in such a cap crunch that the $3.5M next year is desperately needed.

    The flames are not though, so they won’t. They are far far better waiting until next year, and if they run into cap problems resigning everyone, then consider it. At that point, wideman, Raymond, engelland, etc all have 1 season left, so you only take the smaller cap penalty for 1 year past the contract instead of it causing you headaches for 2 years.

    Boston, Chicago, LA, etc on the other hand… They’ve got some thinking to do (I’m looking at you bickel).

  • Greg

    One more clarification… I’m fairly certain you can’t buy out an injured player, else philly and Boston wouldn’t still have pronger and savard on their books. So smid can’t be bought out this year. I think the flames doctors would have to declare him fit to play first, and if the team’s own doctors did that just in time to buy him out, I’d think legal hilarities would ensue.

    Again even if they could though, far better off to pay him the full $3.5m next season to collect dust in the press box, and then buy him out the following season when you actually need the cap space, so you keep the cap “penalty” at 1 extra year.

    That’s the extent of my understanding of buy outs anyway. Ryan, could you fact check that and confirm which is correct?

  • Reidja

    First of all, WW if the cap-clearing rules were obvious to you, you need a hobby.

    Second, I don’t think trading Wideman would require any salary retention by the Flames. Is he overpriced sure, but he demonstrated a lot of qualities some GMs would like. Production, tonnes of minutes, clutch goals, leadership, playoff performance, durability. Is he an ideal top 4? No. But let’s not sell short on him.

    • piscera.infada

      Second, I don’t think trading Wideman would require any salary retention by the Flames. Is he overpriced sure, but he demonstrated a lot of qualities some GMs would like. Production, tonnes of minutes, clutch goals, leadership, playoff performance. Is he an ideal top 4? No. But let’s not sell short on him.

      Sure, but if you’re going to trade him (I’m not saying you should one way, or another), why not increase his value as much as possible? What nets you more return? All those qualities you listed above at a $4 million cap-hit, or all those qualities at a $2.5 to $3 million cap-hit? I mean, eating that salary for two years won’t break your bank–it’s probably the more feasible way to “use your cap space” (as opposed to eating bad contracts, which doesn’t seem to be palatable for a lot of teams, and can lead to your own cap-issues). The only way it doesn’t happen if Wideman were to be traded, is that ownership is dead-set against paying someone to not play for the team–which is fine by me, that’s their prerogative.

      • Greg

        I’m all for flames retaining salary to increase trade value… Assuming they can do it for only 1 year.

        Does wideman become more value at $2.7M? Or Raymond at $1.5M? Does engelland become palatable at $1.45M?

        And is another GM willing to take that value for 1 year and assume the cap will go up so the following year isn’t an issue?

        Gotta think yes to the first questions, not sure on the seconds… But pretty certain the flames can’t afford to be retaining much salary if it’ll still be on the books for 2016-17.

        Basically, they’ve got oodles of cap space this year and should pee away as much of it as possible to expedite the rebuild in anyway they can. But they’ve got none to spare the following year and have to tread lightly.