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NHL Salary Cap: Fixing The Colorado Avalanche

By Janik Beichler |

The NHL salary cap was introduced to the league after the 2004-05 lockout to ensure that smaller market teams can stay competitive against the big market teams. It has surely helped the league as a whole, but also leads teams to facing issues in keeping their core players.

If you do a good job building your team through the draft, there will inevitably come a time when your young players’ entry-level contracts and bridge deals expire and they seek new deals into the millions. The Colorado Avalanche did a good job locking up key players long-term for fairly good prices. Franchise face Matt Duchene is making $6 million for the next four seasons, captain Gabriel Landeskog is locked up until 2021 for a little less and No. 1 defenseman Erik Johnson is currently making $3.75 million.

Speaking of Johnson, he and others have contracts that will expire in 2016, which leads us to the purpose of this article and back to the introduction about the NHL salary cap and the problems teams can face. Especially because of the Ryan O’Reilly situation, I put some thought into a way to fix this team by distributing salaries, or rather cap hits, by the player’s actual role, rather than what a player demands or could get somewhere else.

This is what I call the ideal cap distribution. The goal was to evaluate how important each line is for a team, as well as how much money can and should be spent on players of each position. Therefore, I tried to match the percentage that players of a respective position make up on a 23-man roster with the percentage of the salary that they get.

That led me to the following model that is not perfect and will likely never work out that way, due to a series of reasons, but should still function as a good guideline to where we are heading with a team.

Teams will inevitably have bad contracts every once in a while, just like the Avalanche do with Brad Stuart ($3.6 million cap hit plus no-trade clause). Furthermore, there are occasionally players like Brad Richards in New York or Vinny Lecavalier in Tampa Bay that make a huge amount of money for a very long term, but drop down the depth chart as they age and get less productive — which could also be called bad contracts. Last but not least, teams usually have a couple of entry-level contract — which is a good thing, though, as it helps with managing the former issues.

Ideal NHL Salary Cap Distribution

So let’s take a look. All numbers are in million dollars. NHL salary cap hits are distributed by line, not position. The NHL salary cap is set to $71 million, as that is the expected cap for the 2015-16 season.

F Line 1: 7 + 5 + 4 = 16
F Line 2: 6 + 5 + 4 = 15
F Line 3: 2 + 2 + 2 = 6
F Line 4: 1 + 1 + 0.75 = 2.75
_____________________
$39.75 million on starting forwards
52% of the roster, 56% of the NHL salary cap

D Line 1: 7 + 5 = 12
D Line 2: 4 + 3 = 7
D Line 3: 1 + 1 = 2
_____________________
$21 million on starting defensemen
26% of the roster, 30% of the NHL salary cap

G 1: 6
G 2: 2
_____________________
$8 million on goalies
9% of the roster, 11% of the NHL salary cap

3 Extras: 0.75
_____________________
$1.5 on extras
13% of roster, 3% of the NHL salary cap

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$71 million

This way, the $71 million are distributed among all positions in an ideal way. The big drop-offs from top-six to bottom-six and from the first D-pair to the second and third are easily explained, though I do not think they need much explanation.

NHL teams generally tend to have two scoring lines, that make up the largest amount of the salary, one skilled checking line and one pure defensive checking line. On defense, we simply have the overall best D-men, that are strong offensively and defensively reliable, on the first pair. The second pair is ideally made up of two-way defensemen as well, while the third pair is made up of shutdown defensemen. The extras are ideally a combination of experienced depth players and prospects.

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As you can see, we have seven players that are paid $5 million or more and out of those we have two players making $7 million. Those seven players should be the team’s best players that are ideally locked up long-term and build the roster’s core. The two highest-paid players — I put one on offense, one on defense — should be the team’s star players.

Now it is obvious that according to my model, there is no room for real superstars à la Sidney Crosby and especially no room for two of them — I’m looking at you, Chicago. First off, when we look at those teams’ current cap situations, we can see that they are struggling or will struggle mightily in the future. Nevertheless, if you have a player like Sidney Crosby or Jonathan Toews, you obviously do anything to keep him.

My model is adjustable in such cases. For example, you can save money on the players that play in the top-six with your superstars. For example, a 9+4+3, 9+3+3 model could work. Money could also be saved by paying the defense or goalies less, or having good rookies on entry-level contracts on the roster, although that would soon lead to more problems, as mentioned above.

Fact is, however, that a roster with players that are paid beyond the $10 million, would not be ideal cap distribution.

2014-15 Colorado Avalanche

With that in mind, let’s take a look at last season’s Colorado Avalanche, with the lineup they could have possibly had with all players healthy. The NHL salary cap data is taken from GeneralFanager.

F Line 1: Tanguay (3.5) + Duchene (6) + Iginla (5.33) = 14.83
F Line 2: Landeskog (5.57) + O’Reilly (6) + MacKinnon (0.925) = 12.5
F Line 3: McGinn (2.95) + Mitchell (1.8) + Briere (4) = 8.75
F Line 4: McLeod (1.15) + Cliche (0.7) + Everberg (0.61) = 2.46
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$38.54 million on starting forwards
52% of the roster, 60% of the NHL salary cap

D Line 1: Hejda (3.25) + Johnson (3.75) = 7
D Line 2: Stuart (3.6) + Barrie (2.6) = 6.2
D Line 3: Guenin (0.8) + Holden (1.65) = 2.45
_________________________
$15.65 million on starting defensemen
26% of the roster, 25% of the NHL salary cap

G 1: Varlamov (5.9)
G 2: Berra (1.45)
_________________________
$7.35 million on goalies
9% of the roster, 12% of the NHL salary cap

Extras: Bordeleau (1) + Rendulic (0.622) + Redmond (0.75) = 2.37
_________________________
$2.37 million on extras
13% of the roster, 3% of the NHL salary cap

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$63.91 million + $0.875 million retained (Talbot)

So how close were we to ideal cap distribution?

While the top-two lines are basically interchangeable, the first line is very close to ideal and could even be paid a little bit more. The second line is a little bit off because of MacKinnon’s entry-level contract that has a cap hit of $0.925 million. The third line, however, is quite a bit off because of the big Briere contract, which will be gone next season, though. Almost perfectly paid is the fourth line, which is only off by $30,000.

A surprise to no one, the Avalanche do not spend enough on defense

It looks very different on defense. The Avalanche could have spent $5 million more on the first D-pair. The second pairing looks almost perfect, although we have to note that Brad Stuart is only where he is because of his contract, not because he is a legit second-pairing D-man. The third pairing is close to ideal again, though the quality of the players could be better.

Overall, as a surprise to no one, the Avalanche do not spend enough on defense. Plus, they made a really bad deal when signing Brad Stuart to a contract valid through 2016-17 with a $3.6 million cap hit.

The goaltenders’ cap hits are extremely close to ideal as well, especially that of starting goalie Semyon Varlamov. We all know that Reto Berra may not be the ideal player to fill the backup position. However, his contract is ideal.

Prospects like Joey Hishon and Jordan Caron were purposely left out of the conversation, as they spent most of the season in the AHL or even with a different franchise. Jesse Winchester was left out because he was on injured-reserve all season, the same goes for Ryan Wilson.

2015-16 Colorado Avalanche

Next up is our Colorado Avalanche for the upcoming season. I did not make any moves, except for signing Ryan O’Reilly to his $7.5 million contract, for the sake of the argument. As some may have noticed, I am against signing O’Reilly to such a contract, which has to do with this model among other things.

Furthermore, Danny Briere will not be re-signed, neither will Ryan Wilson be. Jan Hejda is not part of my 2015-16 lineup, although I believe he should be re-signed for another year, but he is still an option. Instead of adding in free agents, I included “ideal cap replacements” (ICR). So let’s take a look.

F Line 1: Tanguay (3.5) + Duchene (6) + Iginla (5.33) = 14.83
F Line 2: Landeskog (5.57) + O’Reilly (7.5) + MacKinnon = 14
F Line 3: McGinn (2.95) + Mitchell (1.8) + ICR (2) = 6.75
F Line 4: McLeod (1.15) + Winchester (0.9) + ICR (0.75) = 2.8
___________________________
$38.38 million on starting forwards
52% of the roster, 59% of the NHL salary cap

D Line 1: ICR (5) + Johnson (3.75) = 8.75
D Line 2: Stuart (3.4) + Barrie (2.6) = 6
D Line 3: Holden (1.65) + Redmond (0.75) = 2.4
___________________________
$17.15 million on starting defensemen
26% of the roster, 26% of the NHL salary cap

G 1: Varlamov (5.9)
G 2: Berra (1.45)
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$7.35 on goalies
9% of the roster, 11% of the NHL salary cap

Extras: Bordeleau (1) + Cliche (0.7) + Guenin (0.8) = 2.5
___________________________
$2.5 million on extras
13% of the roster, 4% of the NHL salary cap

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$65.38 million + $0.875 million retained (Talbot)

You may notice that we are still quite far away from the $71 million salary cap that NHL commissioner Gary Bettman is expecting for next season, even after re-signing O’Reilly and yet I did not include another ICR for the defense. The reason for that will become more apparent once we look at the next offseason.

But let’s just take a look at how close we are to the ideal cap distribution this time around. The top-six is basically the same as last year, except for the O’Reilly extension. We note that the there are only two million dollars left for the top-six, even though MacKinnon is still on his ELC cap hit.

there is still room for another D-signing, even after signing a partner for Erik Johnson.

The bottom-six is getting extremely close to ideal, now that Briere is gone. I included two ICR there, although that does not necessarily mean that the Avalanche have to sign someone for these slots. They can also be filled by Joey Hishon, Jordan Caron and co. — if resigned. However, I would recommend signing another forward for the third line in free agency anyway, as I elaborated here.

As I already noted, there is still room for another D-signing, even after signing a partner for Erik Johnson. However, due to the struggles we will face in the upcoming offseason, that defenseman could only be signed for another year. Options include Jan Hejda and Johnny Oduya, while the ICR for the first line could be Andrej Sekera or Christian Ehrhoff.

The third D-pairing would be ideal the way we have it above, but that would change if another defenseman is signed so that Stuart is forced to move down one slot. Salary cap-wise, that would still be possible, though.

On one last note, the goalies are still the same, with Varlamov starting and Berra backing him up. However, that could change if Berra is moved or simply switched with San Antonio Rampage starter Calvin Pickard — the salary cap room would allow it.

2016-17 Colorado Avalanche

This is where it really gets interesting. Going into the 2016 offseason, the Avalanche will have a long list of restricted and unrestricted free agents that includes MacKinnon, Johnson, Barrie and Tanguay. To make this part easier, I will simply mention who will not be re-signed and then elaborate the decisions on the most important players. Other players may not be mentioned explicitly, but will still be re-signed.

Patrick Bordeleau, Marc-Andre Cliche, Nate Guenin and Zach Redmond will not be re-signed under any circumstance. Jesse Winchester can stay if he plays well in 2015-16 and most importantly if he plays at all. A decision will have to be made on Tanguay and McGinn, but I will get to that later.

Now, the most important re-signings. Erik Johnson, will be re-signed with a cap hit of $6-7 million, as he is our No. 1 defenseman that we do not want to lose. Nathan MacKinnon will be re-signed with a cap hit of $6.5 million, as he is probably the player with the highest potential in the entire system and should be our No. 1 or No. 2 center sooner rather than later. Last but not least, our current No. 2 defenseman Tyson Barrie will be re-signed at a $5 million cap hit.

Those extensions may not take place that exact way, but they seem realistic in today’s contract developments. Johnson is an absolute bargain at his current cap hit, MacKinnon comes off his ELC as a player who was talked about as being one of the best since Sidney Crosby, and Tyson Barrie is one of our best D-men.

That said, let’s look at the possible lineup for the 2016-17 campaign.

F Line 1: Landeskog (5.57) + O’Reilly (7.5) + MacKinnon (6.5) = 19.57
F Line 2: ICR (4) + Duchene (6) + Iginla (5.33) = 15.33
F Line 3: ICR (2) + Mitchell (1.8) + ICR (2) = 5.8
F Line 4: McLeod (1.15) + ICR (1) + ICR (0.75) = 2.9
____________________________
$43.6 million on starting forwards
52% of the roster, 58% of the NHL salary cap

D Line 1: ICR (5) + Johnson (6-7) = 11-12
D Line 2: Stuart (3.4) + Barrie (5) = 8.4
D Line 3: ICR (1) + Holden (1.65) = 2.65
____________________________
$22.05 million on starting defensemen
26% of the roster, 29% of the NHL salary cap

G 1: Varlamov (5.9)
G 2: Berra (1.45)
____________________________
$7.35 million on goalies
9% of the roster, 10% of the NHL salary cap

Extras: ICR x3 = 2.25
____________________________
$2.25 million on extras
13% of the roster, 3% of the NHL salary cap

____________________________________________
$75.25 million

As you can see, we have quite a few ICRs in the lineup at this point. However, that should not scare anyone. For the second line forward ICR, we could re-sign Tanguay at similar terms, if he is still producing. For the bottom-six ICRs, as well as the extras, we will hopefully have Hishon and other prospects turning out to be capable of playing in the NHL. Furthermore, McGinn could be re-signed and if the Avalanche sign another forward for the third line in 2015, he will likely still be there to fill one of the ICR spots in 2016.

On defense, we have the ICR partner for Johnson, that was hopefully signed in 2015 already. The other ICR spot will hopefully be filled by one of Chris Bigras and Duncan Siemens, while the other could kick Nick Holden out of the lineup, leaving Holden as an extra. If Siemens or Bigras are able to play top-four minutes, Stuart could and hopefully will move down to the third pairing.

But how does that lineup compare to the ideal cap distribution model? The first thing that pops into your eyes is that the top-line — if it turns out to be the top-line — has a combined cap hit of almost $20 million! That is still less than the Blackhawks spend on two of their top-six forwards — Kane and Toews — but quite a bit more than it should be.

The second line, however, no matter if Tanguay is still a part of it or not, is basically ideal. It has been that since 2014, but it is nice to see that nothing has to change there.

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The bottom-six, perhaps filled with a free agent and Dennis Everberg with a new contract, as well as Joey Hishon and perhaps Jordan Caron, Freddie Hamilton and other prospects, is also basically ideal.

On defense, depending on how much Johnson and his D-partner sign for, we are very close to ideal. We are actually overspending on the second pairing, though, which is still the doing of Brad Stuart’s bad contract. I also do not expect Stuart to be capable of filling a second-pairing role in 2016 — since he is not even capable of doing so right now — which makes the situation much worse.

As elaborated above, the situation could be solved through moving the third-pairing players and extras around a bit, with Bigras or Siemens moving up to a second-pairing defenseman.

The goaltenders are still the same, as Berra has a contract that is valid through the 2016-17 season, although the Avalanche should really find a way to have Pickard in the NHL for good by then. The money spent, however, is still ideal, according to the ideal cap distribution model.

In the big picture, two things are very obvious. Firstly, the team would finally spend enough on defense, though Stuart is still a bad contract sitting in there. Furthermore, the team would be quite far over the NHL salary cap, even if it rose by around two million again, although we do not know if that will even happen. Last but not least, and that is the big problem, the team would totally overspend on the first line.

Now, it shall be noted that I would be completely fine with that if someone like Steven Stamkos — who has a cap hit of $7.5 million — was the one we are spending that big money on. Of course Stamkos’s contract is expiring in 2016 and he will likely be signed to an even bigger contract. But I would be fine with that as well, because hey, it’s Steven Stamkos. The problem is that for us, it is Ryan O’Reilly.

Ryan O’Reilly is no Stamkos, no Datsyuk, no Couture and also no Seguin.

One could argue, though not everyone will agree, that Duchene, MacKinnon and Johnson are and/or will be the top-three players on the roster. Therefore, the two or three big contracts should be spent on them. O’Reilly has surely been impressive this past season and he will likely find a team that pays him $7.5 million. However, compared to other players making that kind of money, O’Reilly is simply not worth it.

He is no Stamkos ($7.5M), no Datsyuk ($7.5M), no Couture ($6M) and also no Seguin ($5.75). Most of those contracts have been signed a while ago and it seems like bigger contracts are handed out year after year, but it always has to be seen in relation to the NHL salary cap and the players actual role and importance for his respective team.

That said, I would re-sign him at his current $6 million — which I know will not happen. That would still put us over the salary cap, but it would be a somewhat reasonable contract. Keeping in mind that this article’s main purpose is to fix the Colorado Avalanche completely — which O’Reilly surely is a big part of — I want to quickly show how it would be possible to fit O’Reilly into the lineup.

We have prospects, mainly Joey Hishon, in the system and if one of Lawson Crouse (profile here), Mikko Rantanen (profile here) and Pavel Zacha (profile here) is drafted this year, there could be someone found that can fill in on the second line on his entry-level contract. Another option would be to not sign another bottom-six forward or spend less on defense — which would bring us back to our original problem.

Bottom line is that, in my opinion, Ryan O’Reilly should not be re-signed at the terms he desires, but should be traded instead.

The introduction of the NHL salary cap has surely helped the league as a whole, but also leads teams to facing issues in keeping their core players. The Colorado Avalanche will be one of those teams in 2016, but the ideal cap distribution model will help manage those issues.

What do you think about the model? What do you think about Ryan O’Reilly?

Next: 5 Free Agents The Avs Should Target

Next: 5 Avs Prospects That Can Make The Jump In 2015

Next: Beichler's Full First Round Mock Draft

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