Wednesday, June 17, 2009

I'd Rather Be Talking About Hockey

Isn’t it a pleasure to spend some time talking about hockey?

As the Coyotes get ready for the NHL draft and free agency, I thought a good place to start would be a review of the Coyotes salary cap situation and the internal decisions they will need to make over the next few weeks. Since the Coyotes are still technically bankrupt, they are controlled by agreement between the NHL and the Moyes camp. Of course, the NHL is footing the bills but a player budget will have to be agreed upon by both sides. One can probably assume that until a new owner is in place, the team will be spending at or near the salary cap floor. While the NHL has stood firm for Phoenix, there is a definite limit to their largesse.

The NHL salary structure capped all teams at a $56.7 Million payroll in 2008-09. The amount is unlikely to change in 2009-10 and it will likely slide backwards in 2010-11. The cap structure also requires teams to spend to a salary cap floor, which was $40.7 million in 2008-09.

At the trading deadline, Coyote GM Don Maloney made a number of moves that changed the makeup, culture and payroll of the Coyotes. Maloney’s efforts did not go unnoticed. Toronto Maple Leafs GM Brian Burke called Maloney “the first star” of the trading deadline. According to Burke, Maloney gave himself “tremendous salary cap flexibility” that could turn out to be an asset in the trading activity that surrounds the draft.

The Coyotes have 16 players who played all or most of the season in the NHL under contract for 2009-2010. That group accounts for a base salary cap hit of $29.4 Million Dollars. In addition, the Yotes are still carrying a $700K annual buyout payment to former player Dave Scatchard.
Here are the players under contract… 6 players have the potential to earn an additional $3.9 million in entry level contract bonuses. This money includes signing, games played and performance bonuses. For the purposes of the salary cap, only signing bonuses and games played bonuses (when reached) can be counted against the cap. So if you are building an annual budget, it makes sense to start at the base cap salaries.

The Yotes have 8 restricted free agents on their roster – Keith Yandle, Scott Upshall, Enver Lisin, Nigel Dawes, Petr Prucha, Josh Tordjman, Dan Winnik, Joakim Lindstrom and Brian McGrattan.

Yandle and Upshall will definitely be qualified and should expect contracts in the $1.6-1.7 range. Don Maloney has stated he wants to sign Lisin to a 2-way contract but he is also expected to have an offer from a Russian KHL team. Best case – about an $800K NHL salary. Prucha won’t be qualified but he may be willing to sign for less than the $1.6MM he made last year. He could also end up in the KHL with fellow Czech and former New York Ranger teammate Jaromir Jagr. Dawes and Lindstrom may or may not be qualified. They are inexpensive assets but both are little more than depth players. McGrattan won’t be back and Winnik will at best get a 2-way contract.

So with Yandle and Upshall in for $3.5MM total and either Prucha or Lisin at $800K-$1 Million, that brings the payout for 19 players to about $33.8 million. That leaves about $7 million for free agents.

Steven Reinprecht was a team leader last year and a reliable player. $2 million is probably too pricey for a return engagement but he may be willing to sign for less money. Let’s say $1.5MM. Ken Klee was an excellent pickup and mentor on defense for $625K. He could be back at the same money. Dimitri Kalinin is unlikely to return.

Soooo…if you agree to this point, the Coyotes would have spent approx. $36 million on 21 players. That leaves approx $5.7 million and some large holes to fill. Tomorrow, I’ll look at some of the Coyotes options to fill out their roster with free agents, trades and draft day maneuvering.

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