Managing the NHL’s Salary Cap

By Guest Blogger Rob Yunich:

While the NBA and NFL are deep in (varying stages) of labor negotiations, the NHL is witnessing a free agent frenzy. Since “open season” began last Friday (July 1), teams around the league have spent money like it was going out of style.

Here in Washington, GM George McPhee had one eye on the upcoming season and another on the future. When he signed Joel Ward, Jeff Halpern, Roman Hamrlik, and Tomas Vokoun to deals, he also needed to sign restricted free agents Troy Brouwer and Karl Alzner. Brouwer signed a two-year deal worth a reported $2.35 million per season on Wednesday. But the Caps are now over the salary cap under an NHL-allowed summer exception.

And that’s only part of the story. An NHL club is an ever-changing group, with a (non-scientific) average of five or six roster spots turning over each summer. McPhee’s decision to give no longer than a two-year deal to everybody but Ward acknowledged that there are future decisions to be made.

Here’s a list of players whose contracts will expire over the next three summers (not including the ones that were just signed):

2012: Alex Semin, Eric Fehr, Mike Knuble, Jason Chimera, Mike Green, John Carlson, and Dennis Wideman.

2013: Marcus Johansson, Matt Hendricks, Tom Poti, and John Erskine.

2014: Jeff Schultz and Michal Neuvirth.

As you can tell, that’s pretty much the entire roster, and it doesn’t include the $233,333 in buyout money given to Tyler Sloan. (Michael Nylander’s awful contract finally came off the books last week.)

McPhee, therefore, probably still needs to make some pretty big decisions this summer, including: How long a contract will he give to Alzner (who most likely will be in town for a very long time)? What will he do with Semin (who many argue will not be back after this season)? Will Poti be able to ever play again?

Semin’s $6.7 million contract is a huge factor, mainly because it’s a virtual guarantee that McPhee will add players at the trading deadline and right now there’s no money to do that. If Poti never plays again, the Caps could save money there, but it most likely wouldn’t be enough. (Poti makes $2.875 million per season.)

Also, Carlson will be due for a huge raise and Green’s already making $5.25 million, so that could be $10 million in salaries just for those two players. Knuble might retire after this season and it’s unclear whether Fehr, Chimera and Wideman will be back.

Longer-term, Johansson is due a big raise as is Neuvirth. Fellow goalie-of-the-future Braden Holtby, by the way, is a restricted free agent after the 2012-13 season.

From my time as an intern with the Caps during the 1998-99 season, I can tell you that McPhee has an organizational chart that has all of this mapped out. When you see GMs doling out contracts, bet that future decisions are playing a factor.

(s/t to Capgeek for the contract information).

*You can find more of Rob’s work at Storming the Crease!