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Buyouts were the right move for the Flames

The smoke has settled and Lance Bouma and Ryan Murphy are no longer members of the Calgary Flames. One of the common refrains we’ve seen on social media is questions about what the benefit of buying out the two players rather than merely burying their contracts in the American Hockey League. In a few key ways, the buyouts were the smartest move that the Flames could make if they had no plans for either player on their National Hockey League roster.

Buyouts versus burying

Under the CBA, buyouts are functionally the “get out of jail” card for general managers to wriggle out of bad deals. They’re particularly useful in terms of players younger than 26 at the time of the buyout; if a player is 26 or older, the player gets paid out two-thirds of their remaining salary and if they’re younger they get one-third of it (spread over double their remaining contract length).

In terms of burying a player, if they’re on a one-way deal then they get the entirety of their NHL salary but the cap hit is their NHL cap hit minus $1.025 million. (The $1.025 million figure comes from the league minimum salary of $650,000 plus $375,000 as stipulated in the CBA).

The mechanics

Lance Bouma is 27 years old and received a two-thirds buyout on his one remaining season.

  • Buried: $1.175 million cap hit, $2.2 million cash
  • Buyout: $666,667 cap hit (in 2017-18, $776,667 in 2018-19), $766,667 cash (in 2017-18, $1.533 million total)

The Flames save $666,666 in total cash ($1.43 million this season) from buying out Bouma rather than burying him. The cap hit savings are $508,333 this season compared to burying him in the AHL. In either sense, the buyout gives the Flames the most flexibility despite having a lingering cap hit in 2018-19.

Ryan Murphy is 24 years old and received a one-third buyout on his one remaining season.

  • Buried: $0 cap hit, $787,000 cash
  • Buyout: $100,000 cap hit (in 2017-18, $137,500 in 2018-19), $137,500 cash (in both years, $275,000 total)

The Flames save $512,500 in total cash ($650,000 this season) from buying out Murphy rather than burying him. They take a $100,000 cap hit ding that burying the contract would not have had. It was a calculated gamble, in the sense that $100,000 isn’t a ton cap-wise and the cash savings would seem to make up for it.

Overall, the two buyouts save the Flames $1.18 million in cash ($2.08 million this season) compared to burying the two deals. Cap-wise, they save $408,333 this season with the two moves but they’ll have a combined cap penalty of $914,167 next season. It seems that they judged the financial flexibility they gain in the short-term (cap-wise and cash-wise) to be worth the penalty in 2018-19.

  • Parallex

    Murphy still strikes me as a poor move. He strikes me as good enough to be the Flames #7 and in the event he’s sent to Stockton he strikes me as an asset on the farm in that he’s been a very good producer at the AHL level and Stockton is very LHD heavy and costs nothing against the cap.

    Maybe the Flames owners were pissed about spending a million bucks on Bollig and are refusing to let them bury money?

    • FlamesRock

      The problem I see is if they have no plans for Murphy to ever play in the NHL or think he will ever be able to then he is just taking up a spot from one of our prospects

    • X Man

      It seems to me, and the Flames, that Murphy was only part of the deal for this purpose so that we could Lack… He may (or probably not) be good enough to be a #7 D, but there are numerous options who would be better, both internally and externally…

    • Puckhead

      Putting Murphy in Stockton would result in less ice time for players with more perceived upside and potential. This cost needs to be taken into account as well.

  • everton fc

    Read the CanesNation comments regarding Murphy. A lot of love for Lack. Not much, for Murphy.

    We have enough defenders in the “A” who have earned a chance to succeed or fail.

  • Heeeeeere's Johnny!

    Would love to hear the Murphy analysis extended to how this works for both teams when we take CAR retaining 50% of salary. Are there contract count considerations? Carolina cap concerns?

  • McRib

    It’s all fun and dandy to save money for FA, but this is a very poor FA class from what I can see. Time will tell, but its going to be hard (outside of an over payment to get a veteran, see Brouwer last year) for us to even find a decent replacement level forward/defender with upside (like a Ryan Murphy). When Ryan Murphy gets signed in two seconds by a team like Montreal on July 1st, I just hope we have landed something as worthwhile. BT is putting all of his chips into FA his weakest area as a GM, hope it goes well.

  • Newbietwo

    Time to start our gambles and guesses on what moves the flames make tomorrow and over the weekend? Throw out your thoughts fellas..

    – Does Jerome come back? Is it Jagr?

    Seems one never knows

  • Puckhead

    The Bouma buyout suggests that he does not have intangible leadership qualities like Bollig. If there was value to sending him down management would have done it.

    Good riddance to the 10M line.