Examining the Ryan O’Reilly situation


Earlier this week it was announced that the Colorado Avalanche would take Ryan O’Reilly to club-elected salary arbitration. From our post on the O’Reilly situation:

"O’Reilly is set for restricted free agent status and the Avalanche would have to pay him $6.5 million in order to retain his rights. It’s possible that an arbitrator could give him less money than that, which O’Reilly would have to take. The arbitrator will give O’Reilly an option for a one or two year deal. There’s still a chance that the Avs and O’Reilly agree to a long-term deal"

This all started two years ago when the Avs and O’Reilly couldn’t come to terms on a deal and O’Reilly held out. The Avs wanted O’Reilly to take a two-year “bridge contract” much like Matt Duchene did after his rookie contract was up while O’Reilly wanted to sign a long-term deal right then. The Calgary Flames swooped in with an offer sheet and forced the Avs to sign O’Reilly to a big money two-year deal.

Now the two-year deal is up and the Avs and O’Reilly are once again at a standstill. So how does this play out? Let’s take a look

Ryan O’Reilly signs Arbitration Deal

At worst, the arbitrator will award O’Reilly a one or two year deal worth $5.5 million per year. O’Reilly could get more than that, but that’s the worst offer he’ll receive. Not exactly a terrible deal. It’s a million less than what O’Reilly was expecting, but it’s still a good deal. In fact, it’s the same amount of money that Gabriel Landeskog will make next season, which sounds pretty fair. Of course, this could put a rift between O’Reilly and the Avs as I’m sure this caught him off guard. The wounds from two years ago are still fresh, and even though O’Reilly has been a professional since then, I’m sure this hurts him. He won’t let it get to him, especially on the ice, but when he’s eventually eligible for unrestricted free agency, it’s very likely that he gets a one-way ticket out of town as fast as possible.

Ryan O’Reilly signs Offer Sheet

From July 1st to July 5th, other teams can offer O’Reilly an offer sheet, much like the Flames did two years ago. That’ll once again put the Avs in a position to match or let him go for draft pick compensation. This is a worst-case scenario for the Avs as they’ll either have to pay him the $6.5 million he’s owed, or more, or only get draft picks back in return. Draft picks are a strong form of currency in the NHL, but you never know how they are going to pan out. Not only could the pick the Avs receive be a late-round pick if the team O’Reilly signs with does well, but the player may never make an impact in the league. Given that O’Reilly is already an established NHL player who can be used effectively in all situations, the risk of the unknown is pretty great for the Avs.

Ryan O’Reilly signs Long-Term Deal

This scenario doesn’t seem very likely at this point, but stranger things have happened. The Avs and O’Reilly can work on a long-term deal all the way up to their arbitration meeting. While the first year on the deal has to be at least $6.5 million, it’s possible that the two sides could come to agreement that would balance out down the line and give the Avs less of a cap hit. At $6.5 million, O’Reilly would be the highest paid player on the team, which doesn’t seem right considering he plays alongside Matt Duchene. But maybe O’Reilly can sign a front-end contract that sees him take a pay decrease in coming years, which would average the Avs cap hit to around $5 million, which is what, in all honesty, O’Reilly should be making. Remember, the Avs are still hoping to retain Paul Stastny and they are going to have to re-sign Nathan MacKinnon in the near future. Taking a $6.5 million cap hit on O’Reilly for more than a year just isn’t good long-term business.

Ryan O’Reilly is Traded

I’d bet on this being the most likely outcome. Whether it’s before the arbitration hearing or after, I don’t see O’Reilly staying in Denver for too long. O’Reilly’s value is at an all-time high right now. He’s a young top line player, whether it be center or wing, and could fetch that top-end defenseman that the Avs desperately need. Or, he could bring back quality forwards on less deals, giving the Avs more cap room to sign Stastny and a solid defenseman in free agency.

Final Thoughts

Ryan O’Reilly is a passionate competitor who is the first one to arrive at the rink and the last one to leave. He’d be a future, possibly even present, captain on many teams. It would be a shame if this situation didn’t get resolved for the Avs and the fans. It would be a shame if O’Reilly, like Chris Drury before him, ended up traded over a contract dispute. I hope to see #90 in the burgundy and blue next year, but I have my doubts.