Cap-wise, the Flames can afford to give Johnny Gaudreau $8 million

The Calgary Flames and Johnny Gaudreau have been able to negotiate a contract extension since July 1, 2015. Understandably, they didn’t sign a long-term extension when the forward had just a single season under his belt. Both sides wanted to see what he was before committing.

The 2015-16 came and went, and Gaudreau was one of the top players in the entire National Hockey League. The Flames have had the entire off-season to negotiate a deal with Gaudreau, and a report from the Calgary Sun’s Eric Francis indicated that negotiations began in earnest in February. After nearly seven months of talks, nothing has been resolved, and the gap between the camps is reportedly close to $1.5 million: the Flames aiming for around $6.5 million, the Gaudreau camp around $8 million.

One potential sticking point for the Flames is the salary cap. However, it’s entirely possible for the Flames to give Gaudreau an $8 million payday and still fit under the cap ceiling. Here’s how it could work.

How Much Cap Space Is Spoken For?

I made a table! Here are the Flames players that are on one-way deals, plus Sam Bennett (who is a lock on the team but is on a two-way deal). Check out General Fanager’s Flames page for a organization-wide view.

Player
Cap Hit
Running Total
G Brian Elliott $2.5 million $2.5 million
G Chad Johnson $1.7 million $4.2 million
D Mark Giordano $6.75 million $10.95 miilion
D Dougie Hamilton $5.75 million $16.7 million
D Dennis Wideman $5.25 million $21.95 million
D T.J. Brodie $4.65 million $26.6 million
D Ladislav Smid $3.5 million $30.1 million
D Deryk Engelland $2.917 million $33.017 million
D Jyrki Jokipakka $700,000 $33.717 million
F Sean Monahan $6.375 million $40.092 million
F Troy Brouwer $4.5 million $44.592 million
F Michael Frolik $4.3 million $48.892 million
F Mikael Backlund $3.575 million $52.467 million
F Matt Stajan $3.125 million $55.592 million
F Lance Bouma $2.2 million $57.792 million
F Brandon Bollig $1.25 million $59.042 million
F Sam Bennett $925,000 $59.967 million
F Micheal Ferland $825,000 $60.792 million
F Alex Chiasson $800,000 $61.592 million
2015-16 Cap Overage $630,500 $62.2225 million
Mason Raymond Buyout $1,050,000 $63.2725 million

Add in Gaudreau at $8 million per year, and that gives the Flames a total cap hit of $71.2725 million and $1.7275 million of cap space. That would also give the Flames two goalies, seven defensemen and 11 forwards, which is barely a legal NHL roster (two goalies, 18 skaters). They could add up to three more roster players as long as they don’t push themselves over the cap ceiling, and this is before the inevitable Ladislav Smid stint on the Long-Term Injured Reserve (LTIR).

How Does The LTIR Work?

In short: LTIR allows a team to replace an injured player with player(s) making up to the amount that the injured player makes. So for Smid, the Flames can replace him with a player (or multiple players) making up to $3.5 million and get cap relief for them. In terms of the salary cap ceiling, a team can go over the cap by the difference between the cap hit of the player they’re replacing and the cap space they already have.

The folks at Cap Friendly put together a nice little formula based on the CBA’s somewhat convoluted explanation, which we’ve adapted for this specific situation.

The league upper limit
is $73M. A team has an averaged club salary of $x68M and a player with a
cap hit of $3.5M becomes injured and the team places him on LTIR. The team
is now permitted to spend up to a new limit of $x72M:

  1. Cap hit of LTIR player is $3.5M
  2. Amount of cap space available to team = $73M – $71.2725M = $1.7275M
  3. Amount team can exceed the cap = $3.5M – $1.7275M = $1.7725M
  4. New limit = $73M + $1.7725M = $74.7725M

You get the same amount of cap relief regardless of your cap situation, but in theory being up against the cap ceiling before you declare a player on LTIR would allow you to go over the cap by that player’s full amount. Teams often maximize the value of the cap relief by bringing up extra bodies here and there throughout the year, but only for short spurts so they can divvy out their cap space efficiently.

For reference, the Flames used roughly $600,000 on short-term injury replacement call-ups last season, so Smid’s cap space would be more than they would need so long as they don’t get into big injury trouble.

Maximizing The Cap

If the Flames wanted to maximize their cap space (after giving Gaudreau $8 million), they could keep Tyler Wotherspoon ($625,000) and Freddie Hamilton ($613,500) (who both require waivers) on the roster and put their pre-LTIR cap space at $472,000 (which would allow them to go over the cap by just over $3 million). Or they could go with more expensive options like Matthew Tkachuk ($925,000), Linden Vey ($700,000) or Hunter Shinkaruk ($863,333) instead of Hamilton. Or they could demote Shinkaruk and Bennett on paper, since they’re both waiver exempt, and then bring them up on the day of the first game to avoid waivers for other players and maximize their cap space.

Long story short? The Flames have options. They have a lot of bodies that don’t require waivers, and they have the ability to float bodies down to Stockton temporarily and float them back up after Smid is declared LTIR. There are many valid reasons not to give Gaudreau an $8 million payday. The salary cap is not one of them.

  • ronipedia

    well. I see how it is, RYAN.

    So they gotta sign him before putting Smid on LTIR, which makes my official Gaudreau Panic deadline the last day of training camp.

  • Rock

    Johnny is a good hockey player but he only has 2 years in the league. If you want to win a championship then you can not break the bank. If he is trying to get more then 7 then the flames should trade him. johnny only plays one way anyways.

    • Greg

      His performance last year alone would justify a $7M cap hit. Given he’s not yet hit his peak, you could justify paying him a lot more than $7M before you’d need to start considering whether a trade is better for the team.

        • Greg

          Yes, I would like to pay him for what he “might” do. That’s a much better paradigm than paying 31+ year olds for what they “have” done (and will never do again).

          Don’t get me wrong, I’d love to pay him as little as possible. Just saying the notion that he should be traded if he wants over $7M is a bad idea.

        • Nick24

          Every contract is singed with expectations of what a player might do.
          The notion that Gaudreau doesn’t do anything besides score is just wrong. He’s is one of the best transition players on the team. Keeping the puck in the other teams end is just as important as being able to play good defense. The two go hand in hand.

  • everton fc

    He’d get what he wants with many other teams in the league. He’ll produce. Might as well give him what he wants and build around him.

    We can live w/o Nakladal. Not Gaudreau. (We could live w/o Bouma, as well. And of course, Wideman!)

  • Derzie

    So the Oiler kids signed for $6M without a resume and we can’t give a proven player like Johnny $8M? If our goal is to be playoff performers and Johnny gets us there in a few years what will he worth then? 9M? 10M? Will Gio’s feelings be hurt if Johnny makes more? I doubt that. Will the cap you save by playing hardball make or break our success? I am at a loss to see what the problem is. All I’ve seen are ‘it’s too much’ and ‘who will blink first’. Neither of these points make any difference in the standings. Johnny not playing or playing short term or being pissed off does.

    • supra steve

      “Will Gio’s feelings be hurt if Johnny makes more? I doubt that.”

      Will Brodie be a bit choked to be making $4.65 million if Johnny’s making $8?

      How about Monahan and his $6.375?

      What’s Bennett gonna want if he has a monster year this season? Would Johnny making $8 influence his ask?

      If Johnny and his agent will not play ball with the Flames, then he becomes an incredibly valuable trade chip. I could live with that. I’d rather he signed for a more team friendly sum, but I wouldn’t be at all broken up if he was shipped elsewhere for a very attractive return.

      • Derzie

        If you have to trade elite players, you’re doing it wrong. Brodie is already miffed. WAY underpaid. Treliving is being a cheapskate at our expense. Again, if you can’t pay for stars, you don’t deserve to win.

  • jupiter

    At this point it’s easy to speculate that Johnny’s agent is overly greedy. I know it’s his job, but he’s taken this to a dangerous level in the process.

  • wot96

    Why are you counting the cap hit for Tkachuk as only $925k? Do you not have to include potential bonuses or are those not included in the cap until the season ends?

    • piscera.infada

      If bonuses are hit, and push the team over the cap ceiling, the excess is included as a cap overage in the subsequent season (that $630,500.00 reported a few weeks ago was just that). As such, it’s not necessary to assume bonuses will factor into this season’s cap hit–although, I’ll agree it’s something to consider. If Tkachuk plays a full season, and hits his bonuses, you’re probably not too worried about that.

  • The Fall

    The only players making north of 8M are: Stanley Cup, Presidents Trophy, Hart Trophy, Art Ross, Conn Smythe, Rocket Richard, Norris or Venzina Trophy winners… …or gross overpayments. Of those players, most got paid after they performed, and while still in their prime.

    Looking at the 7M-8M guys, the argument could be made that most are simply overpaid, and those cap hits effect their teams’ ability to win.

  • MontanaMan

    A few common themes: 1) Everyone on FN wants JG signed; 2) Very few on FN believe he is worth $8 million; 3) Tre clearly doesn’t believe he is worth $8 million; 4) JG has no bargaining power and can’t be offer sheeted. He can negotiate or sit out the season; 5) I see Tre as a tough but fair bargainer, who won’t get intimidated by an agent looking for unreasonable salary or term; 6) Could get ugly and may get very interesting.

    • everton fc

      Fair assessment.

      I still think he’d get $8mill from most teams in the league.

      Supra Steve – Would your expected return include a first, a second, and an established 1/2nd line player? What’s Johnny worth?? Where are our needs??? This is why I don’t see them trading him. They’ll sign him. But the longer it goes on, the chance it impacts total team chemistry…

      • The Fall

        In a purely hypothetical world, I feel a fair return would be similar age/style, player under contract for under 7M, and a first round pick. For argument’s sake, that’s Filip Forsberg and Nashville’s high first round pick.

      • Newbietwo

        Still think other teams in the league will pay him $8 million? Haha that may be true but if so tell me exactly how and which teams have firstly the salary cap available to do so and secondly will have to destroy their entire roster in order to make it work?

        Now that I have that out of the way let’s take a look at $8 million plus players kopitar at $10 million in LA and look at their cap issues but even then kopitar is a two way player physical can play power play penalty kill and frankly kick some major ass

        Or Pittsburg Sidney Crosby just the best player in the damn world!! How about Tampa Bay and Stamkos yes a guy who has led the league in goals how many years?? Is their captain and what did he settle for again??

        Furthermore Chicagoo how many Stanley cups? Toews is an exceptional player and which award did Kane win last year playing with who? I would argue Kane is the long term compatible might not like it but face it and honestly Kane isn’t worth $10 million certainly not when your goal is to win and the future with Kane will prove my point.. Young and agile can sustain but old and small that’s another question all together..

        Johnny is $6.5 all day long and that’s what he should get risk reward and all but to sign a guy who isn’t in this league physically only because he can tap dance and two step I don’t think so.. Before Johnnys first season I was in the season holders lunch and asked out Irishman if you got two first rounders for Johnny do you take it and his response was.. What do you think?

        And for those that want to call him a franchise player get real.. He is elite yes but a franchise player is the guy in game 7 playing for lord Stanley and absorbs the pressure and doesn’t break.. Could he be? Yes but to say he is when yet proven or to pay him for what isn’t than what is come on!! Shows why most folks are deep in debt and financial screwed

        • Derzie

          “Shows why most folks are deep in debt and financial screwed”

          Your analogy is actually the opposite. People deep in debt spend their money of smokes & booze (i.e middling NHLers). Successful people invest in real estate or solid stocks (i.e. Johnny). Either way the Flames are spending $8M. Do they want 1 Johnny or 3 pluggers?

        • calgaryfan

          if you believe the Irishman knows anything about hockey played in the modern NHL take at look at Team USA and how well they did in the WCOH, or look at how poorly he did at drafting in Toronto.

        • piscera.infada

          I’ll make this easy for you. Players with a cap hit at or greater than $7.5 million per year:

          Datsyuk

          Spezza

          Tarasenko

          Stamkos

          Suter

          Parise

          Nash

          Weber

          Kessel **

          E. Staal

          Getzlaf

          Giroux

          Ludqvist

          Perry

          Crosby

          Subban

          Malkin

          Ovechkin

          Kane

          Toews

          ** Kessel is the break-point. Everyone after him makes $8 million or more, per season.

          Players making between $7 million and $7.5 million:

          Rask

          Rinne

          H. Sedin

          D. Sedin

          Statsny

          Doughty

          Phaneuf

          Campbell

          Krejci

          Letang

          Ryan

          Bobrovsky

          So you mean to tell me that Gaudreau cannot fit on either of these lists? The smart money is that Gaudreau will end up within, say, $250k of $7.5 million. He’s worth every penny of that.

          Regarding the “$8 million dollar request”: why is it “negotiating” when Treliving offers Gaudreau severly under market value (I mean, come on, $6.5 million per is insulting if the Flames are looking for long-term), but when Gaudreau starts at a high-end number like $8 million (which is in my opinion, reasonable given his production), it’s greedy or entitled?

          Shows why most folks are deep in debt and financial screwed

          The last thing I will say, is that if your writing and reasoning are any indication, I wouldn’t be openly demeaning anyone’s intelligence.

          • Newbietwo

            How many of those players actually for the net of their contract lived up to what they are paid? Spezza a good example.. Go ahead pay and hope but only franchise very elite players deliver on their contracts worth

          • piscera.infada

            That’s probably fair. However, based on the balance of contracts in the $6 million to $8 million dollar per year range, where would you put Johnny’s value? Give me a logical number with factual basis. Not “he should make ‘x’ because arbitrary ‘reasons'”.

        • everton fc

          A team w/space and “need” would give Gaudreau $8mill.

          I never said I thought he was worth $8mill. Nor did I ever call him a franchise player. But he’s worth more than $6.5mill.

          They won’t trade Gaudreau for 2 first round picks. They’ll sign him, or he’ll sit. The longer he sits.. The worse it is for all sides involved. But it’s still a business, and I think the Flames will give him > $7mill, with bonuses…

    • FlamesFanOtherCity

      Why is an Eric Francis tweet about the ask and offer getting traction here? Even if it was true, why would JH be asking for less if the offer was below $6.75m? If you get a low-ball offer, why counter with something below what he is worth?

      So, let’s say the rumour is true. If you are selling a car you know is worth $7500, you ask at least that. You might get an offer for $6750. Are you immendiately going to counter with $7000 and hope they immediately settle?

  • Toofun

    I am tired of this and quickly losing respect for my favorite player. If Johnny doesn’t want to sign a contract then sit him out for a year then trade him next year.

    Hockey is a team game so get on board or get out.

    Nofun…

  • Just.Visiting

    Interesting comments on negotiating strategies…

    So, the ultimate logic of a below $7MM number is not current performance, future performance, fan preference or pure entertainment value, but that the Flames have the negotiating leverage at this point in time?

    And you are willing to take the chance that I will explore my leverage by sitting out a few games that might make the difference between making the playoffs or not and then potentially presenting me as an ungrateful player who doesn’t have enough time in yet?

    This is the basis for a long term relationship based on mutual respect?

    Seriously?

  • Jumping Jack Flash

    This is getting painful. It is starting to unravel and become a distraction to the team similar to the three headed Goalie monster last year. I would expect Tree to do whatever he can so that this does not bleed into the start of the regular season. Another slow start, and they will find themselves chasing the season in a very competitive conference.

    What I find to be the most frustrating, is the fact that it is highly likely a contract of some sort will be finalized so why all the posturing. The possibility of missing some of the season and disrupting the team seems pointless when we know a deal will be struck. Both parties should agree to a deal of sorts before the season starts for the good of the team.

    I can see Johnny going stir crazy not playing hockey in October. However, I don’t see any long term deal finalized Into the season that can’t be locked down before the season starts. As well, I am sure Johnny’s agent, Lewis and Tree are getting annoyed with the lack of movement in 5 months.

    Another reason for signing Johnny long term is so the Flames can use him as a bargaining chip to attract free agents to Calgary. This is a real issue with Canadian teams. In fact if not for the McDavid effect, Edmonton would never have attracted a player like Lucic. Players want to play with elite players on a young progressive team.

  • calgaryfan

    the flames paid Iginla 8 million in the 03-04 season and 7 million a year for the next 8 seasons. Why would Johnny sign for anything less? Did Iginla take a pay cut for the team, was he greedy, should the flames have made him sit out, or traded him for asking for all that money. Ridiculous comments! He is probably in the 7-8 million dollar range if they are buying UFA years.

    • Newbietwo

      Look one thing Johnny failed to address and that is why I take the position I do.. Look at how Monohan trained after his first season and the strength he gained.. If Johmhny did they knowing he will be negotiating and have pros and cons as to eliminate certain objections I’d say pay the damn man!!!

  • thumz

    Jonny had 2 great seasons in the show. He’s awesome. But I’dike to a few more before we doll out 8mill for 8 years.
    Marchand just signed for 6ish right? He’s won a cup , had 37 goals last year, and just played on the top line of the team that won the world cup! And he’s not a restricted free agent!
    7.5 mill x 8 years max.

  • VoRaCS

    I agree that Johnny deserves to be paid around 7.5 million and that if we don’t go there, we’ll seriously regret it. I don’t fully understand why Tre feels constrained to put the screws to the two most naturally talented players on the team (Brodie and now JG) but has no problem paying over market value (often with damning term) to several players who could easily be replaced with younger, faster, more skilled players. Where was his shrewd negotiating skills on the many bad contracts that are now plaguing this team? He clearly wants to prove something with Johnny, but he should have done that with the lesser skilled talent not the the face of the franchise, the straw that stirs the drink, and one of the most exciting players in the league.

    It also bothers me that he has a history of failed attempts in trying to rejuvenate older, slower, on their way out of the league types of players instead of giving the more talented youngsters a legitimate shot. If the final roster this year reflects that type of thinking again, then I worry about taking the necessary step(s) we need to make this season, and I can’t imagine why any young player would want to stay in this organization.

    Although this GM has done some good things, I’m not sold that he’s the right man for the job. If he botches up Johnny’s long-term future with the team, I predict that the team’s viability to contend for the cup and his own management career will both be short-lived.

    • calgaryfan

      Totally agree. The flames continue to bring in older players on PTO whose careers are on the downturn. Seems like a waste of time, should be encouraging the younger players and showing them there are spots available.

  • Bikeit

    Everyone keeps talking about Money but I suspect term is an issue. jH might be asking 5 years and eight. This agent is trying to break the mould of you get good dollars before taking your team some place.