Business of Hockey

Buying Out Michal Rozsival

To say that the Rangers have had trouble on defense is an understatement. They have been terrible, and the worst culprit of them all has been Michal Rozsival. He has been flat out horrible, getting caught out of position on a shift-by-shift basis. Many, including myself, thought that Rozsival would have a good year this year in an offense-first system. Instead, he has regressed even further.

The Rangers won’t be trading or waiving Rozsival any time soon. He is impossible to trade with that contract, and waiving provides too many risks. It looks like for this year, the Rangers are stuck with him. One remaining option, that unfortunately cannot be exercised until after the 2010 playoffs conclude, is buying him out.

For those who may be unfamiliar with how the buyout works, you can find an explanation here on BSB. In short, a buyout lets a team sever ties with a player for 2/3 of their remaining salary (not the cap hit) over twice the remaining years on the contract. The math is also explained in the link.

With the salary cap expected to drop after this season, and the Rangers already at the cap limit for this year, they will need to find cap room for raises to Marc Staal, and possibly Dan Girardi. Assuming the Rangers let Chris Higgins go, but decide to retain Vinny Prospal, there isn’t much wiggle room left.

Thus comes the intriguing option of buying out Michal Rozsival and his $5 million cap hit. If the Rangers were to buy him out at the end of this season, the cap hit for each of the following four seasons would be as follows:

  • 2010-2011: $2.16 million
  • 2011-2012: $3.16 million
  • 2012-2013: $1.16 million
  • 2013-2014: $1.16 million

The Rangers would save roughly $3 million in cap room for the 2010-2011 season, which is more than enough to keep their RFAs in town, and may leave for some wiggle room at the deadline to improve the team if need be. The interesting part here is that the savings for the Rangers actually decreases for each subsequent year. This is due to Rozsival’s contract structure.

A buyout is calculated based on the savings in salary versus the cap hit. Since Rozsival is set to earn $4 million in 2010-2011 and $3 million in 2011-2012, the Rangers’ savings actually decreases, thus the cap hit increases. The final two years ($1.16 million) compensate for the “twice the remaining years”, meaning that although Rozsival’s contract would expire at the end of the 2011-2012 season, the buyout would add two extra years of cap hits to the Rangers.

Is it worth it for the Rangers to buy out Rozsival? The quick answer is obviously yes, and the long term answer is yes as well. The Rangers will need that $3 million for raises, and maybe to add a bruiser to a blue line that sorely needs one. But, when considering these options, one needs to look long term as well. The economy is slowly recovering, meaning ticket sales will be on the rise. The salary cap is tied to revenue, so as sales go up, revenues go up, and the salary cap goes up.

Looking ahead to the $3.16 million cap hit the Rangers will have to endure for the 2011-2012 season, the extra $2 million saved can go to potentially resign Matt Gilroy and Bobby Sanguinetti. It is unlikely that either will command a large raise on their current salaries. But, the other notables that will be resigned, and need to be resigned, are Ryan Callahan, Brandon Dubinsky, and Artem Anisimov. All three will be due raises, either through arbitration or just a raise from an entry-level contract. While the $2 million is not a huge savings initially, you add that to the $2.4 coming off the books in the form of Aaron Voros and Donald Brashear, and suddenly, the five players can each get an average raise of $800,000. Couple this with an increasing salary cap, and there shouldn’t be an issue in resigning these players.

The extra two years are where things get really interesting. The Rangers will be on the hook for $1.16 million in salary that was not expected to be there. However, the Rangers have a whopping $12 million coming off the books (Chris Drury, Sean Avery, Ales Kotalik). The two biggest names to be resigned are Evgeny Grachev and Michael Del Zotto, which will be done. The slightly disturbing part is that for each of these two years, the Rangers have just three players signed, to the tune of $20.875 million. There will have to be some savvy maneuvering to get a decent team on the ice.

A buyout seems to be the most logical choice for the Rangers when it comes to the Michal Rozsival situation. It makes sense for the betterment of the team, it makes sense financially, and it makes sense with the fans. Of course, the question of it actually being done though, is a whole other topic.

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  • Nice job Dave. If he (Rozsival) doesn’t step up his play, I’d be tempted to waive him and then buy him out on June 15th….. the Rangers could use that $5mm (prorated, of course to 3.3mm) sooner rather than later…

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