Brandon Sutter's New Deal Highlights Salary Concerns Down The Road

The Hurricanes' three young stars — Eric Staal, Cam Ward and Jeff Skinner — make for a great core to build upon. But their contracts could put Carolina in a bind down the road. (Photo by Jamie Kellner)

One can't help but look at Brandon Sutter's new contract — which pays him an incredibly reasonable $6.2 million over the next three seasons — and deduce that Carolina GM Jim Rutherford has once again worked his magic. After getting Jussi Jokinen to stay in Carolina at a hometown discount and keeping Joni Pitkanen in the fold as contracts for free agent defensemen went through the roof, Rutherford locked up a key piece to the future at a cap hit that is less than what grinder Maxime Talbot will make in the first three years of the five-year deal he inked with the Flyers earlier this month.

Those reasonable deals also allowed Rutherford to ship out Joe Corvo — who had made a "soft" request to be dealt — and replace him with the pricier, but more proven, Tomas Kaberle. With the salary cap's floor nearing $50 million, Rutherford is likely spending more this season than owner Peter Karmanos anticipated back in 2005 when the new collective bargaining agreement was implemented. But on the whole the Carolina GM maneuvered his way through July with poise and purpose.

However, as the Grateful Dead once sang, every silver lining's got a touch of gray. And while it may seem far off, Rutherford and the Hurricanes have some financial storm clouds brewing come 2013-14.

Unlike many teams that front load contracts in order to pay players more money with the idea that they'll retire or leave the NHL before their contract is up — thus keeping their cap hit low while still receiving a premium for their services — the Hurricanes have made it standard practice to escalate salaries throughout the life of contracts.

A look at the Canes' salary chart at capgeek.com (click on "Show Salaries") exhibits how Carolina has negotiated escalating salaries with its core players. Eric Staal, Cam Ward and Sutter all see their dollar numbers increase over the life of their deals, and some of the team's other multiyear contracts also grow in value (Kaberle's goes up $250,000 each season, Chad LaRose jumps by $400,000 next year vs. this season) or are balanced contracts that pay the player the same amount each season (the new deals for Pitkanen and Jokinen are each for three years, with them earning the same $4.5 million and $3 million, respectively, over the course of the contract). 

For the most part, Rutherford has avoided making mistakes on long-term contracts. While there have been some buyouts (Frank Kaberle, Jeff Hamilton, Rod Brind`Amour's final season), Carolina has not yet made a crippling financial decision in the cap era (for examples of such moves, look no further than the New York Rangers).

But come the 2013 offseason, Jim Rutherford will have some decisions to make. Only six players are signed for a combined cap hit of $28.36 million (capgeek.com). But when you consider that Carolina relies more on their actual "cash-out" budget than cap number, the tab comes to $30.55 million for that same half dozen. The culprit in that is, of course, the escalating contracts the team has committed to. Staal is slated to make $9.25 million in 2013-14 ($1.5 million more than this coming season and $1 million more than his annual cap hit). Ward's deal hits $6.6 million ($300,000 more than his cap hit), while Sutter's contract jumps to almost twice of what he'll make this year, pulling in $2.7 million vs. the $1.5 million he is slated to make in the coming season, the first of his new three-year contract.

Tack on the final year of three-year deals for both Pitkanen ($4.5 million in both salary and cap hit) and Kaberle ($4.5 million salary, $4.25 million cap hit) and Carolina has about 63 percent of this year's approximate $48 million cash payroll (as of right now) tied up in six players for 2013-14.

Further complicating the problem is that Calder Trophy winner and franchise centerpiece Jeff Skinner will have just finished the third year of his entry-level contract come the summer of 2013, so he will be due a hefty raise that could cost the Hurricanes a significant sum of cash. If Skinner matches his rookie campaign the next two seasons, one figures he'll be due at least $3-4 million per season on his next deal. And I'm sure many who observed Skinner this season believe he will only get better and thus have better seasons as time goes on. Does that mean he'll be due a deal like those pursued by current RFAs Drew Doughty and Steven Stamkos? Probably not, given that both of those players have already been up for major awards usually reserved for veteran players. But if Skinner were to score 75 or more goals over the next two seasons, it's not inconceivable to think he could be ask for $5 million a year or even more on his second contract.

So let's split the difference and assume Skinner continues his progression and is rewarded with $4.5 million in cash for 2013-14. The Canes would now be on the hook for $35 million for just seven players, leaving only around $15-17 million (based on a small bump in the team's current budget) for 13 players. Even if Rutherford works his negotiating magic on Skinner and keeps him around $3 million, the Canes are still looking mighty strapped for cash if their budget doesn't increase dramatically.

Winning certainly helps cash flow, and by locking up what he considers to be his core players for the next few seasons Rutherford is hoping the Hurricanes will become perennial contenders for the playoffs instead of occassional postseason party crashers.

A quick look around the league shows few teams with that much already committed to players. The Sharks push past the Canes with six players signed to an excess of $32 million, and, like Carolina with Skinner in two seasons, have Logan Couture to pay after the 2011-12 campaign. The Sabres are neck and neck with Carolina in obligations in 2013-14, and the Lightning will join the group once the Stamkos deal is finalized. The Canucks are committed to more than $37 million in cash already, but they have the looks of a decade-long contender and will likely find a way from out under Keith Ballard's albatross of a contract.

But the difference between the Hurricanes and these other teams is, of course, Carolina's status as a budget team vs. being a cap team. They are also all, with perhaps the exception of Buffalo, what Carolina aspires to be: teams that consistently reaches the postseason year after year.

That's not to say the hockey apocalypse is coming to Raleigh in two summers. If the team can make the postseason at least twice out of the next three seasons, the (comparative to most of the league) bare-bones budget could certainly get a boost, meaning those contracts wouldn't take up as much of the pie.

There's also the NHL's new television deal, which will infuse more cash into Carolina's coffers, and the upcoming collective bargaining agreement negotiations that will surely see the owners cry poor and look for more concessions from an NHLPA that seemed so soundly defeated just six years ago. And if none of those things occur or help, Rutherford could always blow up his team and rebuild — even if it meant dealing away the players he has practically labeled lifelong Hurricanes.

But with this kind of money already committed three years out, pending labor unrest, an uncertain long-term ownership situation and, on the whole, inconsistency on the ice, the Hurricanes are facing a future in which the only thing on paper reads "six players, $30.55 million."

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