Hockey fans, make your peace with a flat salary cap. It is coming and, when it arrives, it’s going to be sticking around for a while.
Some stuff to look forward to in modified CBA: Flat salary cap (unless changed, numbers were $81.5M next two years, $82.5M in 2022-23); cap on escrow (starting at 20 per cent next season, moving down after that); return to Olympics (pending agreement with IOC)…
— Elliotte Friedman (@FriedgeHNIC) July 1, 2020
Both Elliotte Friedman and Bob McKenzie have confirmed that the tentative agreement (which may very well be ratified by the time this piece hits CanucksArmy) reached by the NHL and NHLPA includes the salary cap staying at $81.5 million for at least two seasons — and then seeing a marginal increase in 2022/23.
It’s news that most of us knew was coming for a while but, now that it’s been all but confirmed, reality has truly set in. The reaction among the various NHL fanbases has ranged from serious trepidation to abject panic — and we have to assume that the same is true of the league’s various front offices.
The majority of NHL organizations have structured their rosters and negotiated their contracts under the assumption that the salary cap was going to continue its slow-and-steady climb over the coming decade. GM Jim Benning’s Vancouver Canucks — who still have the trio of Loui Eriksson, Jay Beagle, and Antoine Roussel taking up a combined $12 million in space for the next two seasons — were clearly one such team. The prospect of having to continue to squeeze underneath an $81.5 million ceiling for the next few years has caused some well-earned consternation amongst the Canucks fanbase — who would never miss an opportunity to self-consternate — but there’s still some reason for optimism, even in these daunting times.
Today, this author is here to argue that the flat salary cap isn’t cause for panic, or perhaps even trepidation, in Vancouver.
In fact, the flat cap might actually be good for the Canucks — in the long run, anyway.
It’s All In The Timing
The basic thinking is this: the long-term flat cap presents a unique situation. Previously, contracts had mostly been negotiated with both parties understanding that the cap was likely to increase over the course of the deal, but now there’s an absolute guarantee of no growth. The result will be that every contract signed between now and the next three or four seasons is going to be come in at least marginally deflated — either in salary or term, or both.
That should mean that, in general, teams that signed their core players to long-term contracts in the last couple of years, expecting cap growth — the Toronto Maple Leafs immediately come to mind — are at an enormous disadvantage, and that teams that will be signing their core players to long-term contracts in the near future will be at an advantage.
The Canucks, for the most part, fall into the second category.
Of the Canucks’ core players, only two have signed truly lengthy deals, and both of them are locked in at rather reasonable rates — JT Miller at $5.25 million and Bo Horvat at $5.5 million for the next three seasons.
Brock Boeser, signed for two more years at $5.875 million, falls somewhere in between, but he’ll still be signing his next extension before the flat cap has gone away.
Elias Pettersson and Quinn Hughes, the organization’s most important assets and each a genuine franchise player, are on the cusp of their first post-ELC contracts, which they’ll sign right in the midst of the flat cap era.
If the Canucks choose to make Tyler Toffoli a part of their core moving forward — and they should definitely want to — he’d be signing a deal this offseason, when contract values will be at their most suppressed. Ditto for Jacob Markstrom, if he’s who the team chooses as their starting goaltender moving forward. And if they roll with Thatcher Demko instead, he’ll be in line for a new deal next summer.
Even restricted free agents will feel the flat cap pinch, and that will have an impact on new contracts for Jake Virtanen and Adam Gaudette this offseason — though it remains to be seen whether they truly count as core pieces quite yet.
All of these players, if they stay in Vancouver, should end up with less valuable contracts in the current situation than they would have pre-shutdown. And because the entire league is in roughly the same situation, they’ll have a lot less opportunity and impetus to chase dollars elsewhere, making them overall more likely to just stay in their current spot.
All those discounts are going to really start adding up, and the Canucks are one of the teams best situated to cash in on them.
The Superstar Situation
It bears repeating: Elias Pettersson and Quinn Hughes are going to sign their first post-ELC deals smack-dab in the middle of the flat cap era. That means that, no matter how much the two of them develop between now and when the ink dries on their new contracts, they’re probably not going to take home salary to the tune of the Mitch Marners, Jack Eichels, and Auston Matthewses of the world.
There’s just no way in which having two franchise players inked to deals signed during a time of depressed contract value can be construed as anything but an enormous positive.
Then again, there’s always the chance that Pettersson or Hughes opts for a short-term bridge deal instead — which would also be a bit of a coup for the Canucks. It would mean that the duo would be in their mid-20s when they signed their third contract, which would then extend throughout their primes instead of into their late-30s.
Either way, the Canucks are at an advantage here, especially when compared to other franchises around the league. The list of teams yet to sign their dual franchise players is an incredibly short one.
The True Cost Of Dead Weight
Of course, the signing of new contracts is only one half of the equation, and it’s the other half — the management of pre-existing contracts — that is going to cause the Canucks some serious trouble.
In addition to the aforementioned trio of major cap-offenders, the Canucks also have Brandon Sutter and Jordie Benn on the books for another year, and Micheal Ferland for another three seasons at $3.5 million. And the less said about Sven Baertschi, Ryan Spooner, and Roberto Luongo’s criminal recapture penalty, the better.
There’s also Tyler Myers to consider, who almost has to be considered a core player given his sizeable term and salary — though his debut performance in Vancouver is at least enough to prevent him being lumped in with the rest of the “dead weight.”
In a flat cap world, the notion of getting rid of any of these assets without paying a serious penalty — either in terms of compensatory futures traded or buyout cap hit. Many have made waves about the potential of dealing Loui Eriksson to the Ottawa Senators, for example, but the flat cap pretty much kills that idea. With almost every team desperate to cut cap, any franchise with space, like the Sens, will have their pick of the litter. Why accept a broken-down Eriksson when the flat cap is going to force teams to part with quality players for next-to-nothing?
The Canucks might to able to flip a Roussel or a Sutter without paying an extreme amount to do so, but that’s about all they’ll be able to manage. For the most part, they’re going to have to ride those exorbitant contracts out, and that’s going to cause some problems.
It doesn’t take a mathematician to realize that the Canucks were close to the cap in 2019/20 and that several players are in dire need of raises — making it virtually impossible to bring back the exact same roster next year. The likely departures of Troy Stecher and Josh Leivo doesn’t even open enough space for Virtanen and Gaudette’s presumed salary increase, never mind the UFA trio of Markstrom, Toffoli, and Chris Tanev.
The sad reality of having Eriksson, Sutter, Beagle, Roussel, Benn, and the ghosts of Luongo, Baertschi, and Spooner taking up almost a cumulative $25 million next year — or nearly one-third of the total cap — is that the Canucks are going to lose at least one of their three talented UFAs this offseason, and maybe two.
Debate the importance of that as much as you want, and blame whoever you want — there’s plenty to go around — but those are simply the facts of the matter. When the Canucks hit the ice in 2020/21 (or should that just be 2021?), they’ll be doing so short at least one key member of their 2019/20 squad. There’s also next to no chance of them adding anyone of any significance to the mix, barring some sort of talent-for-talent trade.
Then, they’ll have to cut ties with someone else — perhaps Alex Edler or Tanner Pearson, or both — the next year to make room for extensions.
That’s disappointing and no doubt frustrating to a large portion of the fanbase, but even that’s not enough to make the flat cap into anything but a net positive for the Canucks.
When The Window Opens, And What Will Have Already Happened By Then
At this stage in their development as a roster, the Vancouver Canucks are not quite ready for anything other than Cinderellian contention. They’re not expected to take that next step to true contender status for another year or two yet, and so that’s the period of time that is most important to focus on.
Let’s settle on the 2022/23 season — scheduled to be the first season with a moderate bump-up to its salary cap. At that point, the lean years will be over for the Canucks, and here’s what will have happened by then:
- Eriksson, Sutter, Beagle, Roussel, Benn, Baertschi, Spooner, and Luongo will all be off the books.
- With the cap tight for a few years, the above will have probably been replaced by players on ELCs or small contracts (Podkolzin, Hoglander, Juolevi, Rafferty, Lind, Rathbone, etc).
- Pettersson and Hughes will have signed their first post-ELC contracts with suppressed value.
- New discounted deals made for Virtanen and Gaudette, or replacements found.
- A discounted new deal for one of Markstrom or Demko.
- Maybe, just maybe, a cheap extension for one of Toffoli or Tanev.
That all puts the Canucks in an enviable spot come 2022. Their core will be locked in place, the dead weight will be gone, and they should have extra space at that point to fine-tune the roster. Assuming that all comes to pass, and certain mistakes of the past aren’t repeated in the meantime, this should be more than reason enough to look back on the flat cap era as one that was kind to the Canucks — even if it really didn’t seem so at first.