Pittsburgh Penguins: Sign Brandon Tanev

The Pittsburgh Penguins have signed forward Brandon Tanev to a 6-year/ $21M contract. 

Josh Tessler: Hey Justin, I need you to do a write-up on the Brandon Tanev signing in Pittsburgh. 

Me: Sure, I really like Tanev. He is a fantastic penalty-killer with amazing speed. He can really help shore up the bottom 6. What’s the specifics of the contract? 

JT: 6 years/ $21M $3.5M AAV

Me: **spits coffee all over my keyboard**

You read that correctly. 6 years for a 27 year old forward that has yet to play 200 games in the NHL. This leaves me to speculate, as to whether or not, Jim Rutherford has worn out his welcome with Pittsburgh Penguins fans. 

First, I really do like Brandon Tanev. He has all the attributes that you are looking for in a 3rd or 4th line player, and I don’t hate the money. However, when you have a team that is in the prime window for Stanley Cup contention, you cannot lock up depth pieces to long-term deals because these are the trade chips that you can use at the deadline to improve your roster. A rebuilding team is not going to accept bad contracts for rental players. 

In the past two Canada Days, Rutherford has handed a 5-year deal to Jack Johnson at 31-years old and a 6-year deal to Tanev at 27-years old, with limited NHL experience. These two signings will likely be carried through the remainder of the Crosby/ Malkin Era. 

Puck77

NHL Announces Salary Cap for 19-20

It was announced on Saturday that the upper limit of the National Hockey League Salary Cap was set at $81.5M.

Courtesy of capfriendly.com, we can see below where each team stands.

Salary Cap

As you can see, this projection puts a few teams in quite a predicament. The Vegas Golden Knights could have to part ways with a talented player, as they are currently over the projection and have William Karlson yet to be signed. The Lightning, Penguins, Capitals and Leafs could also look to make moves to accommodate salaries and retool the organizations.

Why So Low?

But we kept hearing that the Cap was going to be $83M, what happened to the extra money? So the projections in February was that the cap would be higher, however the finality of the Hockey Related Revenue (HRR) cannot be calculated until the Stanley Cup Finals are complete.

Now that the figure has been released, we can speculate as to why the numbers have come in much lower. I will outline what I believe to be the primary reasons the projections were so wrong.

  1. The year of the Wild Card. Sure, we were all excited by the history of each of the Division Champs losing in the first round. While it made for great TV, it knocked a lot of the bigger markets out and probably dropped the playoff revenue down a bit.
  2. Escrow. Even with the lower than expected cap, the players had the option to activate an escalator that could have increased the Cap closer to the $83M that was originally projected. They chose not to activate the escalator based solely on one, single word; ESCROW. While this is complicated to explain, I will do my best, as you are going to be hearing this term a lot in the near future. Escrow is money that is deducted from a player’s check and held by a third party, until the HRR is calculated to ensure there is a 50-50 split of the funds, as was agreed to in the 2012-13 CBA. While the Escrow refund data has not yet been released for the 2016-17 or 2017-18 season, the calculations in recent years have been quite inflated and the players have lost almost 10% of the money they have put into the escrow. As it stands, the cap is $81.5M across 31 teams. If we calculate that out with each team spending to the max 81.5 x 31, we get $2.526B. Therefore, the total amount of HRR would have to exceed $5B for the players to receive all of their escrow back. With these figures, you can see why players are hesitant to activate the escalator.

How this projects going forward?

So now we see a few causes of the lower projections, we can look forward to what this will do for the cap in the future. First, we have to get through September. The NHL can exercise an option on September 1st, or the NHLPA can exercise the same option on September 19th, that would terminate the current CBA on September 1, 2020. I will cover that in future articles.

I think the NHL is starting to reach a peak, and by that I mean we are likely to see the upper ceiling flatten out a bit. The NHL has experienced unprecedented growth over the past eight years, and the addition of Vegas and Seattle shows the interest of the league across the continent. One could envision a scenario where the influx of retail and ticket sales from the Seattle inaugural season spikes the cap number again, but I remain pessimistic in this regard. Part of my reasoning for this is the close proximity to Vancouver and pre-established allegiance to that market, where that did not quite exist for Vegas. The franchise will certainly succeed, as evidenced by their season ticket drive, but I don’t envision them having the financial success that the Golden Knights had in their opening season.

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The only other major influx of revenue over the next few years is the TV deals, as the current U.S. broadcast deal expires at the end of the 2020-21 season. If the NHL can start a bidding war, hopefully excluding bids from non-major networks, the contract could rival the Canadian TV deal that generates $700M annually. I suspect a deal ends up somewhere in the $350M area, which is a significant increase over the current $200M contract carried by NBCSN. Factor in any local broadcast deals, this could be the wild-card toward an increase in player salaries.

If I had to settle on a number, factoring for a 32-team league and a long term TV deal, I would believe that $90M annually will be the highest salary cap that we will see over the next 8-10 years. Mitigating factors to consider, as to why the cap will flatten out, is the secondary ticket market competes with team sales and tend to cause tickets to go unsold. Another factor is streaming services do not count toward general ratings, and this is something that broadcast companies can use to lessen an offer for a new contract deal, as well as piracy.

Of course, this whole idea takes a dive if the NHL has another work stoppage that results in lost games.

Statistics provided by capfriendly.com

Featured Image Photo Credit: Nikos Michals

 

New Jersey Devils

New Jersey Devils: Acquire P.K. Subban

The New Jersey Devils made the biggest splash on the Draft Floor when they acquired P.K. Subban from the Nashville Predators for a package of draft picks and Steven Santini and Jeremy Davies.

 

Devils Take

While it is difficult to gauge the results of the trade right away, it is fun to speculate as to how this plays out. Firstly, P.K. Subban is an upgrade on most blue-lines. He is a talented puck mover with a hard point shot and excellent skating ability. While his defense is less than stellar, he is no slouch, and he adds scoring potential and bolsters a team’s power play. Coming off his worst statistical season, Subban’s play led the Predators to sell low on the former Norris Trophy Winner. The Devils are hoping that Subban can return to form and justify the $9M per year price tag.

A realistic expectation for New Jersey fans would be to get 50 to 55 points from Subban, and he could eat up 22 to 24 minutes a night, while manning the top power play. 

For the return they sent back, Devils General Manager Ray Shero and the team came out ahead in this trade.

Grade: B+

Predators Take

As the rumors of the lower than expected salary cap became more realistic, the idea of a P.K. Subban trade was evident. The Nashville Predators had ~$77M in team salary committed to next season, with a few glaring holes to fill. They have been rumored to be one of the leading clubs to land Unrstricted Free Agent Matt Duchene. Assuming Dante Fabro makes the leap to full-time NHLer, he will likely slot in the top 4, which leaves Santini to fill in the bottom pair.

I think the two 2nd round picks are an underwhelming return, getting Davies in the deal was a bit of a sweetener. He is a talented offensive defenseman that just signed his Entry Level Contract. Playing at Northeastern University, he netted eight goals and 28 assists in 37 games. He will likely join the Milwaukee Admirals next season, Nashville’s American Hockey League affiliate, and make a worthwhile extra defenseman, if injury forces the situation.

Grade: C

Summary

Overall, I think this was a pretty good hockey trade that was dictated from a Devils position of strength. Any other year, this would have been a horrifying trade for the Predators, but their cap situation and a down year by Subban forced Nashville General Manager Dave Poille’s hand.

Statistics provided by TSN

Featured Image Photo Credit: Nikos Michals

San Jose Sharks

San Jose Sharks: Erik Karlsson signs record deal

It has been widely reported that Erik Karlsson is staying with the San Jose Sharks on an 8-year deal with an $11.45 AAV.

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The Good

Erik Karlsson is a generational defenseman. These guys are worth every penny that you invest in them. In just 53 games last season, he had 3 goals and 42 assists. He is a contender to win the Norris Trophy, and when healthy, could be a Hart Trophy level candidate. If you watch footage of him playing, you will quickly notice the precision passing and flawless skating that he has. One of the best of our generation and a surefire Hall of Famer.

The Bad

As noted above, he only played in 53 games last season and missed the final game of the playoffs due to a groin strain. He had surgery on May 31, and San Jose is reporting that he should be good to go at the start of next season. The injuries have been mounting over the past few seasons, as he missed 11 games last season, and finished the 2016-17 campaign with a fractured foot. The other notable thing is that he is 29 years old, and that means the Sharks will be paying a 37-year old defenseman $11.45M dollars. Sure, the cap is going to increase, barring a financial setback, but that will still be a hefty tag to carry for a team that is a perennial contender.

Other factors for the Sharks, include a large salary commitment to a very small group of players. As of now they have ~$41M committed to just 5 players (Brent Burns, Marc-Edouard Vlasic, Logan Couture, Evander Kane, and Karlsson). Even if the salary cap rises to the projected $83M, that is almost half of your cap gone before you even address the Joe Pavelski and Kevin Labanc contracts. I understand the logic in re-signing Erik Karlsson, but it will be difficult for the Sharks to maintain their consistent level of Pacific Division dominance with this model. Every team has a few players on ELC’s on their Stanley Cup roster, but San Jose may need their whole bottom nine on those contracts just to fill out their roster.

The Verdict

I have faith in the way that Doug Wilson works with other GM’s in the league, and I am sure he will find a way to get the numbers lined up. But looking at this in a vacuum, this is a win for Erik Karlsson and the Free Agent class, and a loss (for now) for the Sharks.

research from capfriendly.com

stats from hockey-reference.com

featured image photo credit – Nikos Michals

Buffalo Sabres

Buffalo Sabres add some veteran assistants to Krueger’s staff

The Buffalo Sabre announce that they have added Mike Bales and Don Granato as assistant coaches to Ralph Krueger. 

Don Granato

Following just one year with the Chicago Blackhawks, Granato will be joining the Sabres. Granato has been coaching, in some capacity, since 1993. Holding positions with the University of Wisconsin and the USNDT. 

Don is the brother of former Colorado Avalanche head coach and long time NHL assistant, Tony Granato. His sister is married to Ray Ferraro

Mike Bales

Bales joins the Sabres after three years as the Carolina Hurricanes Goaltending Coach. His resume includes six seasons at the NHL level, including back to back Stanley Cup titles with the Pittsburgh Penguins. Mike Bales is often credited with scouting and developing Matt Murray

He was a professional goaltender for 18 seasons and appeared in 23 NHL games with Boston and Ottawa. 

Along with Steve Smith, this trio completes Ralph Krueger’s coaching staff. There are still plenty of roster decisions that are yet to be made, but Jason Botteril has done a fantastic job getting the team headed in the right direction. 

After signing Jeff Skinner to a 7-year extension, this completes a busy wee for the Sabres, who can now shift their focus toward the Draft. 

Featured Image Credit: Nikos Michals