Salary Cap Questions: The Story of The Summer

Brand New’s album drops on the 22nd, NHL 2010 is released in two weeks, and training camp gets underway in eleven days.

What a month to be alive.

There’s been some questions via email and in the comments over the course of the last month, and while I’m sure the majority of readers know the answers, it never hurts to touch up on a few things before September 30th when San Jose needs to be cap compliant.

1) What’s the significance of a salary bonus in terms of a player’s cap number? Is there a site that provides the relevant bonus information for a specific player?

The cap hit that you find on CapGeek is the maximum amount that player could take up under the cap. Bonuses are included. However, if a player fails to reach every bonus by the end of the season, only his base salary will count against the cap. This means that a team is able to exceed the cap by the combined total of all their players bonuses. The risk in doing so is that if the players do hit those bonuses (sending the team over the cap in the process), a large cap charge will be levied for the 2010-2011 season.

As for a site that provides the specifics of a player’s performance bonuses (specifically entry level players), I have yet to find one.

Example: Jamie McGinn’s base salary is $681,666. His contract specifies that $315,000 in performance bonuses are available to him this season. For the purpose of this exercise, let’s assume $105,000 will be paid out for the following- scoring 20+ goals, playing 60+ games, and notching 30+ assists. At the end of the season he has 22 goals, 67 GP, and 24 assists. McGinn will therefore be worth $891,666 under the salary cap (base salary + hitting two performance bonuses).

Salary cap hits, the possibility of dumping Cheechoo in the minors, and Phil Kessel follow the jump.

2) How does a player’s salary factor into his cap hit? Dany Heatley is due to make $8.0 M this year, but Ottawa already paid him $4.0 M in July. Doesn’t this mean he will only carry a $4.0 M cap hit?

We had a few of these in the comments during August, and while we put out those fires quickly, there may still be some casual readers who aren’t up to date.

The answer, of course, is no. All players numbers can be found at the aforementioned Cap Geek, but if you want to do the math on your own it is simple. Take the total amount owed to a player over the course of the deal and divide it by the length of the contract. That’s his cap hit every single year.

3) Do you think anyone goes the way of Kyle McLaren after training camp?

I’m not sure- aren’t yellow visors a fashion faux pas this season?

As for sending an AHL player down to the minors, your guess is as good as mine, but I assume that the Ehrhoff/Lukowich salary dump from last week means we won’t see the same thing happen this season- DW has flexibility to squeeze under the ceiling now. San Jose has enough problems attracting free agents as is, and the fact that this would be two seasons in a row they dumped a player in the minors (Cheechoo being the only real solution here) would do nothing to help that. He’s a very established player in the organization, and kicking him to the curb in that manner would raise a lot of questions about management’s loyalty to prospective players.

I think it’d be a huge mistake, even if the cap situation was worse than it is now.

4) Is Wilson going to trade for Kessel or try to sign him to an offer sheet? I’ve heard both are options.

Good question, but I don’t have a definite answer here. Both situations will likely result in San Jose giving up draft picks, because Boston is backed up against the cap and can’t take on any salary barring them making another move. There’s always the possibility you send Marleau to Montreal, Montreal sends picks to Boston, and Boston sends San Jose Kessel, but that’s delving into Eklund territory. Anyone who reads Hockeybuzz know if he’s said that? Would be a great rumor.

Anyways, if DW is going to go the route of extending an offer sheet, here’s the draft compensation San Jose will owe Boston:

$994,433 or below: None
$994,433 to $1,506,717: 3rd round
$1,506,717 to $3,013,433: 2nd round
$3,013,433 to $4,520,150: 1st and 3rd round
$4,520,150 to $6,026,867: 1st, 2nd, and 3rd round
$6,026,867 to $7,533,584: Two 1sts, 2nd, and a 3rd round
Over $7,533,584: Four 1st round picks

Looking at Kessel’s career numbers it’s safe to think he’ll come in at the 1st and 3rd round range, although Wilson hasn’t had an issue doling out pay raises to injured players this offseason (see Huskins, Kent; Mitchell, Torrey). All joking aside, I doubt Kessel earns more than that.

This would leave San Jose with two second round picks (the second coming from the Buffalo Sabres in the Craig Rivet deal) in 2010. Every other draft selection has been traded away the last two seasons or would be heading to Boston due to this hypothetical RFA offer.

Kessel will be unable to play until at least November due to a shoulder injury.

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A potential move for Kessel has had me thinking a lot since the Ehrhoff deal, especially with the lack of draft picks next season. The flip side to that of course is that Kessel is likely worth a first and third round pick and is young enough where San Jose would not be devoid of any semblance of youth. The forwards in the system look fairly barren at this point, with only Logan Couture seeming like a lock for a roster spot in the near future.

If DW nabs Kessel, is it safe to assume Michalek may be moved? He may get you the draft picks you gave up for Kessel, although DW would be in the same position he was last Friday- dealing from a position where he needs to dump salary. As we saw then, the return is going to be lackluster at best. I’ve ran the numbers on CapGeek (with Kessel coming in at $4.0 M), and it seems just moving Cheechoo doesn’t get you under the cap if San Jose plans on carrying a 22 man roster.

Think of a Kessel offer sheet this way- essentially you’re trading Michalek, a first, and a third for Kessel and a prospect/pick/depth guy, losing a penalty killer but gaining a more proficient goal scorer in the process.

Go Sharks.