Business of Hockey

What a flat cap and no amnesty buyout means for the NY Rangers

It's not good, but it's manageable

A flat salary cap for the next few seasons has been a given because of COVID-19. It’s going to have ripples across the league as teams adjust and player contract estimates come down. While there had been hope of amnesty buyouts, something that would have helped the NY Rangers, it looks like that hope is gone.

The Rangers are no different, as the lack of additional cap space will certainly alter their plans for the offseason. This is something we touched on in May, but given the news it felt like the right time to go into more detail.

Brendan Smith

Smith is the easy one to discuss. Smith will be due a signing bonus of $1 million at some point before next season starts. He also makes just $2.35 million in salary on his $4.35 million cap hit. That has a decent chunk of value around the league.

I’ve been beating this one to death, but the logical destination is Ottawa. The Senators are going to need to get to the cap floor somehow, and they prefer to do it without spending too much money. Spending close to 50 cents on the dollar for Smith makes too much sense here. Remember that Smith still has value on the ice

The wrinkle is Smith’s no-trade clause. It’s not a full NTC, it’s a 10-team NTC.

Ryan Strome

Strome’s contract estimates are pretty high for a long-term deal. He’s still estimated to get about $6 million on a five year deal, or $7.4 million on an eight year deal. The rest of the estimates vary, but those are the two most likely scenarios, per Evolving Hockey.

The Rangers cannot afford that long-term. They can make it work for next season, sure. But in those four years following, contracts are due for Mika Zibanejad, Pavel Buchnevich, Filip Chytil, Kaapo Kakko, Tony DeAngelo, and many of the highly touted prospects coming down the pipe. With money already committed to Chris Kreider, Strome’s days as a Ranger appear to be numbered.

And before you ask, no it doesn’t matter if the Rangers trade Lundqvist – this issue extends four years beyond Hank’s contract.

Henrik Lundqvist

Speaking of Lundqvist, he’s a popular fan-driven amnesty buyout target for the NY Rangers. Yes he’s up there in age and salary, and yes Igor Shesterkin is the future. However there is now minimal to zero trade market for an $8.5 million, 38 year old goaltender. Even at $4.25 million, there won’t be much market for him.

The Rangers have two options – ride it out for one year or buy him out. A buyout saves them $3 million next season, but costs them $1.5 million the following season. Neither season is a big concern for the Rangers from a cap perspective*. Both are legitimate options.

A decision with Alex Georgiev will be needed. He’s going to be traded, it’s just a matter of when. What the Rangers do with Georgiev will impact Lundqvist.

*-Believe it or not, the Rangers don’t have that many cap concerns for 2020-2021 or 2021-2022. It’s when Zibanejad’s contract expires that the Rangers have issues. The planning for that begins now, as noted with Strome.

Marc Staal

No amnesty buyout, no traditional buyout. Just one year at $5.7 million. This will likely ride out.

Jacob Trouba

Another popular amnesty buyout candidate for the NY Rangers, no amnesty buyout means he’s staying. It’s unlikely the Rangers trade him before his NTC kicks in. The difference between Trouba and Derek Stepan is that Stepan had four years on his deal. Trouba will have seven years on his deal. That is a big difference.

Jesper Fast

This one is painful. Fast is estimated at a $3 million deal over 3-4 years. He’s a salary cap luxury at that price. The issue wouldn’t be the first two seasons, it would be the third season when Zibanejad’s contract (and Kakko’s) ends.

Fast is a useful player who seemed to find chemistry with Strome and Artemi Panarin. But the facts remain that eventually (probably?) Kakko and Vitali Kravtsov will become top-six wingers, moving Fast down the lineup. He’s a great depth player to have. Is he worth $3 million over 3-4 years? That’s a tough question.

Tony DeAngelo

Naturally this was going to come up. Since last offseason, DeAngelo had been penciled as the odd-man out with the Rangers committing to Trouba and trading for Adam Fox. The fact is that a $5 million 3RD, no matter how many points he puts up on the powerplay, is a salary cap luxury.

DeAngelo is the Rangers’ most valuable trade chip this summer. But he also has significant value to the Rangers if they make the commitment to move him to the left side. Put him with Trouba on the top pair and leave the surprisingly successful Fox/Ryan Lindgren pairing together, and the Rangers have a formidable top-four.

It’s either move him to the left side, or deal with a salary cap luxury that may have serious implications down the road.

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  • Nice analysis in general, but I have two comments.

    1. Maybe covid changes everything, but this year, every team was at least $10M over the salary floor and all but three exceeded it by $15M. People have frequently discussed players helping other teams get to the floor, but such teams almost never exist.

    2. We know Evolving Hockey is wrong – we just don’t know how wrong. The unexpected flattening of the salary cap and no doubt financial woes of some teams affects all teams and the effect is going to be a significant depression of the salaries on contracts signed this year. It may not affect guys like diGuiseppi and McKegg who are basically already at the minimum, but it matters to Strome, DeAngelo, Fast, Georgiev, and Lemieux – and countless playes on other teams. This pool of players is simply going to get far less money in the aggregate than they were expecting.

    A few players may still do well, but some others will be badly burnt. If Taylor Hall’s price comes down, Strome looks less appealing. If it goes to arbitration, Strome will certainly get less than he would have before. I personally believe the overall decline will really hurt Jesper Fast. If flashy players are cheap, why spend much over $2M for a guy who gives a workmanlike performance. And I see only minor raises for Lemieux and Georgiev. Maybe DeAngelo will still hit the jackpot. IF you really appreciate him – and no doubt some GMs do – he is a singular talent and less in competition with better options.

    • #2 – EH was wrong twice last year, that’s it. It was because they missed on term.

      Their contract projections are based on an $81.5 million cap ceiling. COVID does change a lot, but until they are actually wrong, I trust EH.

      • They have no track record whatsoever in dealing with a pandemic of this scope, none whatsoever.

        What EH is doing is basically science. Science begins with certain assumptions and extrapolates from there. If it is good science and the assumptions are valid, then the projections tend to be good. But we know the assumptions are wrong and EH has no data to analyze what happens with the new assumptions.

        If you are saying that the EH numbers are so high that the Rangers can no longer afford Strome, DeAngelo, Fast – and other teams are affected the same – where is the money they are going to get coming from?

        In the 1980s, I read Bill James and his approach to sabremetrics in baseball. He postulated that the number of runs a team would score was essentially slugging percentage times number of base runners with some round off error. However, he added a caveat. He presumed that managers would basically behave in the way they had in the past. So, for example, it is no fair batting Mickey Mantle or Ted Williams leadoff to maximize your “formula” numbers. It is not necessarily wrong to bat sluggers who can get on base first, but there is no data.

        In hockey, to put things simply, goal differential is a function of possession and PDO. Possession can be measured reasonably well and PDO is really hard. There seems to be some evidence that possession gives us a better picture than goal differential because PDO is such a crapshoot. However, all of the data comes from the real world, not some fantasy world and the reality is that usually coaches won’t play crap PDO players. So what can be concluded is that good possesion players who actually stay in the lineup tend to be good players.

    • You are 100% correct. All professional major sports leagues will feel the effect of financial uncertainty especially the NHL. Very hard to predict revenues in this covid/ financial uncertainty times . Teams that are carrying a lot of debt will be hamstrung.

  • Buy out Henk. Let Fast walk. Sign Strome to a 1 yr deal only. Keeping Georgiev gives the Rangers a soild goalie tamdem, no need to trade him as he can be protected in the expansion draft. Sign DeAngelo.

    • Can’t let Fast walk just like that without trying to get him on a new deal. This team lacks to much of what he brings to the table. They really dug themselvesitself into a corner post Hayes and Zucce trades. They don’t have to many strong three zone players after Zib, Panarin, Fox and Fast imo. Management has got to be working hard to win soon with soon before both Panarin and Zib are in their early 30s. You can’t keep trading away pieces with no realistic replacement in sight.

      • You can coach defense but exception hockey talent is hard to find. Fast is expendable and can be replaced by a player on a smaller salary scale.

        • Fast is a 3 zone player and the only valuable winger who can pk. Nobody on this team can bring that shift after shift…. He is also the type who replaces Buch to help hold the lead. The front office really tried to half step this rebuild. If Panarin wasn’t here than I would say just concentrate on drafting more of those types of players but….. This is why the AHL won’t have winning culture or quality call ups (esp after Kravtsov makes the jump). None of the forwards younger than on this team can bring what Fast brings.

    • Fast can play on any of the 4 lines.
      He allows line mates to focus on offensive production while he takes care of the D end of things. Completely selfless player , who plays through injuries. He’s a great mentor to the younger players.
      JD knows his value and will do what he can to extend him

      • I guess people never notice that when the other team has a D score, 8 times out of 10 it’s Fast not picking his man up.

  • Dave

    Is it official that there will be no buy outs? I haven’t read this anywhere else, and that’s the reason for my question. Too bad, and really stupid that the NHL won’t have one. If teams can rid themselves of bad contracts, and reducing their payrolls, it just makes more sense to do so for the long term implications.

    It will be interesting to see what the pay scale will turn out to be for some of the lower skilled players, especially when the marquee names will get less!!!!!!!!!!!!

    • Amnesty buyouts increase payrolls rather than reduce them. Teams can already buy out players to save money; that does not require amnesty. What amnesty does is allow teams to spend the money they are still giving the bought out player a second time. For example, an amnesty buyout of Lundqvist would save the Rangers less than $2M but would allow them to spend an additional $8.5M.

      • Ray

        The way it worked in the past, a player was bought out via the amnesty buyout, the team paid 3/4 of the value of the contract, and it didn’t affect the cap. You may recall Brad Richards, that’s how we rid ourselves of that poor contract……….

        • In rough numbers, the Rangers owed Richards $27M. With the amnesty buyout, the Rangers only paid Richards $20M and then were free to spend the $40M which would have been his cap hit on other players. This was good from a cap pespective and a team quality perspective, but the Ranger organization actually spent $33M more than they would have had they kept Richards.

          So amnesty buyouts make it easier to deal with a smaller cap, but harder to deal with a financial crisis. The league is lowering the cap to cut costs and amnesty buyouts would be counter-productive.

  • why no buyouts ??? players shouldn’t mind !!! the bought out player still gets his full pay — just doesn’t count against the cap … actually the player can then sign with another team, and actually make more.
    so if players have no reason to be against buyouts – it’s only money to the owners – no cap ramification. won’t help poor teams … but will help teams with “unlimited” payrolls – ie montreal, toronto, new york rangers, chicago, philadelphia – possibly california teams. and if it helps toronto and montreal – the league will be for it

  • Everybody is in the same boat — anticipating $84M as the cap and winding up with just $81.5M …. so a lot of teams will find it difficult to spend on their own RFAs and UFAs, let alone those from other teams. Available cap space is about $14.4M with 15 rostered players.

    Strome 2-3 years @ $4.5-$5.25M … NO NTC/NMC in the 3rd year.

    Tony D 3-5 years @ $5.25-5.75M per NO NTC/NMC in the last year (or 2 years if a 4-5 year deal)

    Fast 2 years @ $2.8M (he won’t want to leave a very comfortable situation for himself — at least this is the way I read his personality)
    Georgiev 2 years @ $1.8M
    Lemieux 1 year @ $1.3M

    Plus at least 4 more players splitting about $3.25M or 5 players $4.1M

    Total 21.0M (although with just 2 goalies now and a 22 man roster the cost would be 20.15M).

    Trade Smith, save $4.25M
    Buyout Hank, save $3M

    Available Cap Space $21.65 (-.5M)

    The trick is to make sure you have the flexibility of trading players in year 3 … maybe even in year 2 for some.

  • Why people expected amnasty buyouta? Beat writers?
    When you give contract nobody said we will let you off the hook

    • Why? Because of the unprecedented nature of the effect from Covid-19 on the sports and entertainment business. This isn’t business as usual. Not saying that amnesty buyouts have to be a thing, but there’s nothing unreasonable about the expectation that the NHL might make some exceptions to normal business practices — after all, they just instituted a 24 team playoff system (even if they like to call the 1st round a “play-in”).

      Re: the contracts, you can always buy out a contract — the only letting off the hook is the cap hit affect …. and considering that under normal circumstances the cap always increases somewhat, it sounds like a sensible solution to a Covid-19 created cap crisis.

      In the alternative, this might have been a good time to consider the “cap” as a soft one, with a 5% overage that gets taxed … with that money getting distributed between the teams that don’t exceed it.

      You can either throw up your hands and say this is a big problem and there’s nothing we can do about it, or you can get to work trying to find sensible and reasonable solutions.

      • I totally disagree, unless the cap will go down significantly, but once again Nobody promised that cap will flying up as a rocket. Maybe owners should hire more intelligent GMs re terms and how much they should pay for contracts.

        • Sure Mike, I’m sure the smart ones looked in their crystal balls and foresaw the occurrence and the effect of a pandemic.

          • pandemic didn’t affect cap so far. It’s just blow up the expectation it will be higher. If you handing contract based on the expectation then Yes you got to be smarter, otherwise watch the stock market expectation and play the dice

          • The history of the cap suggests otherwise Mike, or haven’t you noticed? It’s not the stock market, nor is it dice.

          • Trouba contract is a dice game Staal contract was …uhhh Gi and so many. Sometimes should be ceiling of that, but once again… it’s only expectation to higher cap, not always working as same with economy. If you’re not leaving yourself a room you will be forced to pay for that

          • Again everything has been managed relatively well and based on the reasonable assumption that the cap would increase by 2-4% every year. That is the history that has been written since the cap was instituted. Picking out a few bad contracts is something we can do for every team in the League.

          • BTW they squeezed ADA last summer and overpaid to Trouba. Now people want to trade ADA b/c he asking for performance he made?

      • You are acting as if the cap is the problem. The problem is money. Revenues have collapsed and teams without deep pockets are hurting. The cap needs to drop and amnesty buyouts artificially inflate the cap.

        The only idea that has any merit at all – and you can bet the ranch against this one – is to allow much cheaper buyouts. One takes money away from people like Lundvist and Staal to increase the salaries of Strome, DeAngelo and Fast – and maybe help some owners. Can you imagine the NHLPA buying into a plan which helps some of their members at the expense of others?

        And a key point of the cap is to keep the poorer teams competitive. I don’t see why covid makes that any less of an objective.

        • The cap isn’t the problem, the problem is the effect of a pandemic on projected growth and revenues. They will normalize over time, but in the meantime everybody made reasonable assumptions about both revenues and cap — you can tell your higher revenue teams that spent to the cap to solve the problem by themselves or you can promote a league-wide resolution that could help all the teams.

  • The good thing about a flat cap is that it will keep the Rangers from making a dumb mistake by giving Strome a big contract.

    It will be interesting to see if Bettman allows the players to share in the Seattle franchise fee, because they were not a shared revenue in the past. It might be a “give back” as an offset to a flat cap. If that happens, then the cap will go up.

    If not, then the Rangers and a lot of other teams have big decisions to make, with no “freebee” buyout.

    • adding teams means add players means creating jobs for the players. Why players should get to this packet

  • Trouba is no different a hockey player with the Rangers then he was with the Peg. A big smooth skating steady defenseman who chips in on offense with the odd goal. What has changed to give Ranger fans buyers remorse?

    • Bloomer

      Agree 100%. We need another whipping boy once Staal leaves, so why not Jake. It’s ridiculous……….

      • Nobody forced him to take his contract, but if he signed that you gotta perform. 8ml it’s not a shitty payment

    • Jake is an excellent hockey player. He will be the anchor of the defense for a long, long time. He is the complete package of skills and physicality. The Rangers fans who have buyers remorse simply don’t know much.

    • Big Trouba fan here, waiting 3 years for him to come here.

      He needs a legit partner on the left side. Jacob was never good enough to do it on his own, certainly not good enough to justify an $8M per contract, that even I thought was a slight overpay (by about $1.5M per).

      PLUS, Fox and ADA have taken over on the PP. The “plan” was for Trouba to be top PP guy, hopefully getting 50 pts per year. That did not happen either. Further watering down the value of his contract.

      That’s what happened.

  • Smith – trade to cap floor team
    Strome – take arbitrator award, flip for a pick at trade DL
    Hank – rides it out
    Staal – rides it out
    Trouba – stays put
    Fast – unfortunate cap casualty
    Tony D – gets a 4-5 year deal

    • You’re playing with fire regarding Strome — what if the Rangers are legit Cup contenders and Chytil hasn’t quite proven to be a solid 2nd line Center — yet. I think that’s a likely scenario, so do you trade Strome away and hurt your ability to compete for the Cup or do you “eat” his value.

      I think a 2 or even a 3 year deal makes more sense. He’s a player that should probably be traded after next year … or even 2 years down the line. Just make sure there’s no NTC/NMC clause after the 1st year.

      • The only way to find out it’s let Chytil to play top 6. Isn’t it why DQ was brought here? What Fast doing on top 6?

        “Chytil hasn’t quite proven to be a solid 2nd line Center — yet”
        So better now invest to Strome over see what Chytil can do there? DQ doesn’t give a shit about youth to develop. He just run vets to get numbers in column W. You can’t play 1.5 lines totally lean on Ziba Panera to score multi points in each game and blame Hank for his Ds disaster coverage

      • Good point and this was my prediction, not necessarily my recommendation, though I do think taking the two year arb award gives NYR some good optionality on strome. I don’t believe he’s likely to voluntarily sign a 3 year contract. And of course if the rangers are legit cup contenders they will either – depending on how the C position is looking – keep him for a playoff run or trade for another area of need.

        • I’m fine with 2 years …. but I try to remember that every individual hockey player is different, that they may value certain aspects of a contract more than others. Strome has found a good landing spot, clearly Edmonton wasn’t. Do you look to venture back out there and run the risk of finding a less stable situation? Here he has the opportunity to play with Panarin, the opportunity to possibly win a SC — do you give that all up for an extra 10% salary? For an extra year on your contract?

          I’m not suggesting there’s a right or wrong answer, but every once in a while people surprise you. Chris Kreider took 10% less to stay with the Rangers rather than test free agency, I think Strome will eschew a few extra $s and a 1 year contract for the possibility of some stability (although that’s debatable with Chytil on his heels).

  • Dave,

    Thanks for pointing out, what I believe to be the most important consideration for all NYR contracts the next few years, that the Rangers ability to resign Mika is a key consideration in 22/23 without upsetting the roster due to cap issues.

    With that said, I don’t see that impacting DeAngelo being resigned in the $5-5.5mil range. I just don’t see the ‘COVID effect’ (reduced revenues and certainties) impacting his or the Rangers value of said contract (eg he is more valuable to us than anyone else). The one risk is if DeAngelo prefers a bridge hoping to cash in after that. If that happens, he is a goner.

    I agree with all of your views except Strome. I think the combination of COVID Effect and his One Hit Wonder year playing alongside Panarin, I just don’t see a market for him in the $6-7mil per range. Those numbers also put cap pressure on Mika for 22/23 and beyond.

    I think Trouba is going to be highly motivated going forward with some of the buyout/trade rumors. I am sure he knows he needs to be better.

    And my boy Fast! Love his compete level and value to the Rangers. I just fear DQ playing him on the 2nd line at the cost of development for higher ceiling offensive players. When he is on our 4th line, that’s when I know the Rangers are taking a run at the Cup.

    And no Rangers fan wins with the goalie decision coming whether its fair well to Lundqvist and Gorg. I am a goalie dad and there are more pictures of Lundqvist than me in our house. Very sad!

  • Smith – Traded
    Strome –Traded
    Hank – Leadership will keep him until contract terms out.
    Staal – Leadership will keep him until contract terms out.
    Trouba – Stays
    Fast – Goner…
    Tony D – Will be signed.

  • There’s no way we should even think of signing Strome long term, maybe a one year deal at best. The problem is DeAngelo. He’s way to valuable to put in a deal for an unknown high draft pick and if we trade him for a top 6 forward which he’s worth, wouldn’t he’d be making roughly the same money?

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