At this point of the offseason, teams have made most of their roster moves and decisions, and it is just a waiting game until the pre-season to see how the final roster will round out.
Because of the minimal amount of moves, it is a prudent time to look at the salary cap situation and how that could affect the potential roster that can be iced.
Just last season, the Edmonton Oilers had to start the season two men under the 23 man roster due to cap constraints.
Does this year’s situation look any better? Let’s take a look.
Current cap hit
The Oilers are currently $354,167 over the $88M cap with a roster size of 21. While that may not sound too bad, there are still outstanding contracts to two key RFAs: Dylan Holloway and Philip Broberg.
If we assume that each signs for $1M, the 23-man roster works out to $90,354,167, meaning the Oilers would somehow have to clear over $2.3M by the start of the season.
Possible solutions to be within the cap
Bury contracts
The usual easiest solution is to bury contracts in the AHL for cap relief. For this year, $1.15M per contract can be buried without counting towards the cap.
Because of this, it may mean that recently signed defenceman Josh Brown might be the odd man out, given his salary of $1M. If the Oilers do sign Broberg to the same contract, then Brown being sent down evens out the money there, meaning the addition of a Holloway $1M contract would have the Oilers at $89,354,167.
Given the need for cap space, it is also possible the Oilers send down Troy Stecher and his $787,500 salary as well and just run six defencemen. That still isn’t enough, however, as the Oilers would still be at $88,566,667, or $566,667 over the cap.
The Oilers could waive another veteran forward and run a very lean 20-player roster (the minimum size a roster can be). Would that be Corey Perry and his $1.15M? Is it a coincidence that his salary is the exact max amount that can be buried?
In that case, the Oilers cap would be $87,416,667, actually giving them $583,333 in space. What this means is that each day the Oilers have that amount available, they “earn” approximately $3k in cap space. Therefore, they can then add a contract later in the year that is higher than that amount, as the cap space is calculated on a per day basis. So if the Oilers could remain healthy throughout, they could then be in a position to then call up one of these players later on in the year (or make a trade for a player with a similar salary amount).
Another option would be Derek Ryan and his $900k salary, but obviously that buys less cap relief, and the fact that Ryan is a right-handed center may make him more valuable than Perry.
LTIR
Running a 20-man roster is below optimal. There is no flexibility whatsoever—injuries mean the team can’t ice a full lineup, and there is no real ability to swap out a struggling player for another.
The Oilers have one potential option that has been weaponized and discussed ad nauseam over the last couple years: long term injured reserve.
If a team places a player on LTIR, they are then allowed to exceed the cap by that player’s salary, minus any cap room the team has.
Evander Kane and his $5.125M salary could be the easiest answer to this problem.
LTIR rules are extremely confusing, and the team being cap compliant versus not cap compliant at the start of the season when the LTIR is used can make a pretty big difference.
The ideal way to use it is to get as close to the cap as possible, allowing a team to use basically the entire amount of that player’s salary.
So if the Oilers do sign Broberg and Holloway to the $1M contracts, the best way to approach this would to make the above mentioned transactions to bury contracts, then place Kane on LTIR.
In that case, one way to maximize would be to send down Perry, Josh Brown, and Calvin Pickard, and call up Olivier Rodrigue. Those moves would get the Oilers to $87,979,167, just $20,833 below the cap. By putting Kane on LTIR, the Oilers would then have a salary cap of $93,104,167. They could then recall all three of those players, send Rodrigue back down, and actually have $2.75M in cap space. Granted, there is no cap accrual when in LTIR, and so that amount stays the same regardless of the length of time. But it still is a fair amount that the Oilers could make use of.
Of course, there are issues and risks with LTIR. The first issue is obviously being able to show that Kane has an injury worthy of such designation. It appears that Jeff Jackson alluded to that possibility earlier this offseason, but it is no guarantee. The other issue is that if Kane were to become healthy enough to return during the regular season, the Oilers would then have to get back under the cap with his salary. That could present a headache in the future.
Trade
This is the final option to get cap space, but also seems like it would be the least likely.
Players with a cap hit above the $2.3M figure that could conceivably be traded are defencemen Cody Ceci ($3.25M) and Brett Kulak ($2.75M). Anyone else above that amount that is arguably disposable are either recent signings that would not be traded before suiting up (Viktor Arvidsson, Adam Henrique, Jeff Skinner), or players with trade protection (Evander Kane, and I guess Darnell Nurse, but him being traded is almost assuredly not going to happen).
Trading Ceci is probably the best move, both from a cap perspective and team perspective. Broberg appears to be the consensus pick to start on the right side of Nurse on the second pairing, a position that was occupied by Ceci last year, to fairly terrible results.
Having a $6M third pairing is not good cap management by any means. Of course, if Ceci is traded in a straight cap dump, that leaves one of Josh Brown, Troy Stecher, or Connor Carrick as a regular defenceman, not exactly great either. Granted, you could have all three up and swap them out to whoever is playing best at that time.
Given that all the defencemen signed in the offseason were right-handed, it would appear that that may be the Oilers escape plan. If Kulak were to be traded, you would either be running back Nurse and Ceci, and move Broberg to anchor the third pairing, or else moving one of the above to their off-side, also not a winning strategy.
If you trade either Kulak or Ceci in a cap dump and Broberg does falter, then the defence becomes a huge issue for a team with Stanley Cup aspirations.
There are some promising prospects on the farm, but it would not be a good idea to count on them (as good as Max Wanner looked last year).
So unless the Oilers can make a hockey trade involving one of them, or convince Kane to waive his no movement clause for a trade, this seems like the worst of the options available.
Playing hard(er) ball with Broberg and Holloway
We’ve utilized an assumption of Broberg and Holloway signing contracts of $1M. That amount isn’t an unfair amount for either player, but it is certainly possible they may be looking for more. Therefore, already getting them to sign that amount could be considered a bit of hard ball, but it isn’t outrageously unfair.
But perhaps given the cap constraints the Oilers try to flex their leverage more.
The Qualifying Offers for Holloway and Broberg were $874,135. If the Oilers got them to sign those amounts, then that saves $125,865 of cap each, for a total of $251,730. That would mean the Oilers would just need to waive Josh Brown and Perry to get under the cap, leaving the team with a 21-man roster. Granted, that leaves the Oilers with no forward subs, but you can’t win them all.
Unless the Oilers really put their foot down, similar to what happened with Ryan McLeod in 2022.
McLeod was also coming off his ELC, and had a qualifying offer of $813,750. The Oilers ended up getting him signed to a one-year deal at $798k, i.e. less than his QO, in order to stay cap compliant.
McLeod likely signed that lesser contract because he knew that otherwise he would be at risk of being sent down, much like Raphael Lavoie.
If the Oilers managed to convince Broberg and Holloway to take similar discounts, that could be huge.
It’s unlikely that they would sign at the league minimum of $775,000, but if they did the Oilers would only need to clear just over $1.9M. Granted, the contracts available to then be sent down doesn’t actually change the equation that much, as it would still require Perry and Brown to be sent down. But it does end up providing more cap space that could be weaponized later in the season.
So what will happen?
It’s anyone’s guess as to what will be the solution to the cap problem. It hinges mostly on the contracts signed by Broberg and Holloway, as the different amounts, even just small differences, can have different impacts on the cap and the cap strategy.
If I was a betting man I would assume the Oilers will go with burying players at the start of the season, but perhaps the team doesn’t want to waive either of Perry or Ryan, which is necessary in that scenario.
All the above is to say that Oilers fans can expect some further roster news in the next two months, so at least there is that to look forward to.
Photo by Brett Holmes/Icon Sportswire
