Friday, December 9, 2016

Leon Draisaitl, The Oilers and Performance Bonuses

When I last, and first (http://lewkc1.blogspot.ca/2016/07/cap-space-available-to-oilers-in-2016-17_6.html), made a post about the Oilers and their cap situation I posited that the Oilers could reasonably add about 3.5M to 5M in cap hit before the season started without likely incurring a meaningful cap overage in 2017/18. They did just that signing Kris Russell and Eric Gryba to contracts that carried 3.1M and 0.95M cap hits respectively.

 In making the assumptions to come up with the 3.5M to 5M number I made a variety of assumptions. Three large ones I would like to touch on in this post include:
- Ference provides no LTIR relief and his cap hit counts in full
- Draisaitl will not hit his 1.625M Schedule B
- Oilers will aggressively manage the roster to keep daily cap hits at a minimum

When I was planning on doing this I was a bit worried about trying to project where the Oilers are currently in respect to the cap given injuries, call-ups and what not. Luckily I discovered that not only does the wonderful capfriendly.com have cap tables with the Oilers' cap hits going forward they have also done all the really heavy lifting and built out a daily cap tracker which I will use as my jumping off point for overage issues. I also reference bonus info off of capfriendly.com or off my first post which was pulling off the now offline generalfanager.com.

Coming into today Capfriendly (https://www.capfriendly.com/teams/oilers/cap-tracker) had the Oilers projected cap hit without any bonuses (and without any Ference LTIR relief (more on that later)) at about 69.62M leaving about 3.38M in space at the end of the year for bonuses without generating overages for 2017/18. Now that number will change daily dependent on IR usage (players going on IR open up a roster spot but still count fully against the cap), roster callups and demotions as well as trades. All that said, the further you get into the season the less you can meaningfully impact your year end cap space as your cap hit accrues daily based on the players on your roster each day (This is why, for example, players with larger hits are easier to move at the deadline rather than early in the year because the bulk of their contract has been paid).

Now the Oilers currently have 5 players on the IR, 1 on the LTIR and are carrying a full 23 player roster meaning they are accruing cap hits for 29 players. This is unlikely to continue and if the Oilers believe they are at risk of overage I believe they will get more aggressive managing the roster daily to keep the cap hit down. Given this, and in the absence of trades that could possibly reduce the cap hit further confident, I feel comfortable assuming the Oilers will be able to finish the year closer to 69M leaving them around 4M in space for performance bonuses.

 So knowing they have 4M in space for performance bonuses the next question to ask is what is a reasonable expectation of performance bonuses that can be earned by players given how the season is playing out. In my first post I outlined the Oilers were at risk of players earnings 4.763M in bonuses which would be slightly over the 4M available but not catastrophic. Let's revisit those assumptions by player quickly:
- McDavid: Projected he would hit everything. No change there. 2.85M. Change 0M
- JP: Projected him to hit 2 Schedule As (Ice time and +-) for a hit of .425M. Seems unlikely he will hit these or stay on the roster for the full 42 games to be eligible so revising this down to 0M. Change (0.425M).
- Nurse: Projected to hit 3 Schedule As (Top 3 in +-, Top 2 in blocked shots, top 4 in Ice time (avg per game)) for 0.6375M. Given his injury these seem unlikely now aside from maybe TOI and +-. I'm going to take take this down to 1 Schedule A (one of the TOI or +-) for 0.2125M. Change (0.425M)
- Draisaitl: Projected to max out 4 Schedule As. I see this is as likely and we will have a deeper discussion about his 1.625M Schedule B so for now no change. Change 0M.
- Others: The only realistic candidates for more performance bonuses would be Benning or Caggiula. Benning has no bonuses this year and 0,3N next year so we can rule him out. Caggiula has a max of 0.425M which I would presume would be standard Schedule A types (I don't know for sure). I'm going to assume he won't hit any given injury time, but there is some risk here. Change 0M
Summing these changes the Oilers can now reasonably expect performance bonuses earned (without addressing Leon's Schedule B risk) of 3.913M (4.763M less then 0.85M we no longer expect earned by Nurse and JP). Against our projected 4M of space in this scenario the Oilers could basically expect to just scrape by with no overages for the 2017/18 season.

 Now for Leon to hit his 1.625M Schedule B he would need to hit just ONE of the following conditions:
top 10 forward in the league in goals/assists/points/points per game (min 42GP), top 5 in league in Hart/Selke/Richard voting, NHL First or Second team all star, Conn Smythe.
Now none of these are a slam dunk but he's certainly in the range. Given what we've looked at I think its fair to assume if Leon hits his 1.625M Schedule B it will be incurred as an overage for the Oilers next year.

 The last 2 things to talk about are the assumptions I mentioned at the top; roster management and Ference.

The Oilers have placed Ference on the LTIR which to me tells me they believe he can provide them some salary cap relief. This is at odds with my understanding of LTIR which as I understand it only provides relief when a team is at/or near the cap limit and then goes over the cap limit thereby getting relief from LTIR. My understanding is this needs to happen during the season which can't happen for the Oilers because they are well clear of the cap without bonuses and bonuses don't accrue daily but rather show up at the end of the year depending on which conditions have been met by players with bonuses in their contracts. The CBA is not clear on this. Speeds (@hockeysynposium) on twitter rightfully pointed out some vague language in the CBA which did in fact indicate that maybe you could utilize LTIR against bonuses. I'm not sure how the mechanics of this would work but if this is in fact the case, the Oilers have no overage risk as the 3.625M in LTIR provided by Ference would more than absorb any Oiler bonus scenario. But this is not clear. Any feedback is appreciated.

 The last point is Edmonton's roster management. Observing the Oilers so far this year they haven't really acted like a team that was worried about cap management or bonus overage. They have always run a full roster of 23 even with a large IR piling up. Most teams do this but if you were really worried about cap management you could easily run a roster of 22 (1 surplus D and 1 surplus F) rather than the full 23. They also haven't always called up the cheapest cap hit possible to backfill an injury (Simpson and his 0.835M cap hit versus Musil and his 0.6M cap hit as an example). These are little things but things a team that was actively managing its cap hit to as low as possible should be doing if they were concerned about overages. This could mean they believe/know they have plenty of cushion in the Ference LTIR, did not expect Draisaitl to threaten a Schedule B Bonus, or poor cap management from Edmonton's front office.  I welcome feedback on any of these options as I'm just theorizing.

So as a quick conclusion if Leon doesn't hit his Schedule B bonus the Oilers are at a negligible risk of cap overage penalties next year but if he does they risk a substantial 1.625m overage barring Ference LTIR relief (which is unclear) or substantial cap shedding moves (likely trades) needed relatively soon to maximize cap impact across the remainder of the season.




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Wednesday, July 6, 2016

Cap Space available to Oilers in 2016-17

Oilers "Risked" Cap Space; How much Cap Hit can they safely still add?


POS Player Base Cap Hit Bonus Max Cap Hit Bonus Proj Proj Cap Hit
F1Eberle              6.000              6.000              6.000 
F2Lucic              6.000              6.000              6.000 
F3Nuge              6.000              6.000              6.000 
F4Pouliot              4.000              4.000              4.000 
F5Yakupov              2.500              2.500              2.500 
F6Hendricks              1.850              1.850              1.850 
F7Letestu              1.800              1.800              1.800 
F8Maroon              1.500              1.500              1.500 
F9Kassian              1.500              1.500              1.500 
F10Lander              0.988              0.988              0.988 
F11Draisaitl              0.925     2.475              3.400             0.850              1.775 
F12McDavid              0.925     2.850              3.775             2.850              3.775 
F13Pakarinen              0.725              0.725              0.725 
F14Puljujarvi              0.925     2.475              3.400             0.425              1.350 
                   -    
D1Sekera              5.500              5.500              5.500 
D2Klefbom              4.167              4.167              4.167 
D3Larsson              4.167              4.167              4.167 
D4Fayne              3.625              3.625              3.625 
D5Davidson              1.425              1.425              1.425 
D6Nurse              0.863     0.850              1.713             0.638              1.501 
D7Oesterle              0.585              0.585              0.585 
IRFerence              3.250              3.250              3.250 
                   -    
G1Talbot              4.167              4.167              4.167 
G2Gustavsson              0.800              0.800              0.800 
                   -    
BuyoutKorpikoski              0.500              0.500              0.500 
Totals:            64.687            73.337 Totals:          69.450 
Cap Ceiling:            73.000            73.000 Cap Ceiling:          73.000 
Cap Space:              8.313            (0.337)Cap Space:             3.551 <----Cap Hit Oilers could add in Trade before any roster moves
Bonus Total:    8.650  Bonus Total:              8.650 
Max Allowed:   5.475  Projected Bonuses:              4.763 
Firm Hit Needed:    3.175  Bonuses for Cushion:             3.888 
  • This 4.763M of Projected Bonuses earned should be treated as Firm Cap Hit and therefore Cap space reserved for it. This will satisfy the 3.175M requirement of space needed above the 5.475M Bonus Cushion. The remaining achievable bonuses of 3.888M are not likely to be reached and can be "risked" into the bonus cushion

Assumptions & Draisaitl/Puljujarvi Bonuses

  • Ference LTIR provides no relief given the magnitude of bonuses
  • Mcdavid will hit all his bonuses; 2.85M
  • Puljujarvi will have same contract and bonuses as Draisaitl (seen below)
    • Max $850,000 Schedule A bonuses, Max $1,625,000 in Schedule B bonuses in all years
    • Schedule A
      • $212,500 for any of the following achievements - top 6 forward on team in ice time (total or average per game, min 42GP), 20 goals, 35 assists, 60 points, 0.73 points per game (min 42GP), top 3 forward on team in +/- (min 42GP), All Rookie team, All Star game, All Star game MVP.
    • Schedule B
      • $1,625,000 for any of the following achievements - top 10 forward in the league in goals/assists/points/points per game (min 42GP), top 5 in league in Hart/Selke/Richard voting, NHL First or Second team all star, Conn Smythe.
  • Projected Draisaitl Bonuses Achieved: Max Schedule A (Ice time, +-, Assists, goals or PPG (0.85M)); No Schedule B
  • Projected Puljujarvi Bonuses Achieved: 1-2 Schedule A (Ice Time, +- (0.425M)); No Schedule B

Nurse Bonuses

  • Max $850,000 Schedule A bonuses
  • Schedule A
    • $212,500 for any of the following achievements - top 4 defenseman on team in ice time (total or average per game, min 42GP), 10 goals, 25 assists, 40 points, 0.49 points per game (min 42GP), top 3 defenseman on team in +/- (min 42GP), top 2 defenseman on team in blocked shots (min 42GP), All Rookie team, All Star game, All Star game MVP.
  • Projected Nurse Bonuses Achieved: 3 Schedule A (Ice Time, +-, Blocked shots (0.6375M))

Conclusions

  • If the Oilers ice the roster above they can add 3.55M of cap hit still for the 2016-17 season while utilizing 3.888M of bonus cushion space in bonuses that are likely unreachable
  • A trade moving out no bodies at all for say Barrie will still require the demotion of one defenseman; if it's Oesterle that opens up another .585M so we are at ~4.14M. If they are bold and it's Nurse it's 1.5M and now we can add nearly 5M.
    • Digging deeper an add like Barrie would make it less likely Nurse hits all of .638M and even with the more likely situation of Oesterle down and Fayne/Nurse rotating in and out of lineup you're 4.14M goes up to closer to 4.75M.
  • If the Oilers really want to be aggressive and ice a strong roster this year 4-5M in cap space is a valuble trade chip/asset in pursuing UFAs/RFAs.
  • It does come with substantial risks. If Draisaitl or Puljujarvi blow the doors off and hit those Schedule A/B bonuses the Oilers would be staring at a cap penalty for 2017-18 of as little as .213M to 3.888M.
    • That said if they are doing that well the team is likely doing very well and linemates that likely have lesser value now (say Yakupov, Pouliot, Maroon, Kassian and maybe Nuge and Eberle) would have increased value in season and could be dealt to address the coming overage.
    • Minor tweaks like Beck for Lander can also help save like 0.25M while day to day up and down paper transactions to manage daily cap hit are also feasible (Oilers have many waiver eligible players to facilitate this) to help keep the cap at a minimum
  • I'd say there is a bit of upside as well if they get aggressive in keeping Puljujarvi and maybe even Nurse in the AHL. This could open up as much as another 1M in cap space getting them to a max add of 6M if Nurse is sent down.

With Thanks/Sources


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