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While it's still early, Alexander Semin and the Carolina Hurricanes appear to be a good fit. An extension seems logical, but are there salary cap issues that would prevent such a move?
In the off-season the Carolina Hurricanes made two major moves. The first was the draft day acquisition of Jordan Staal. While shocking, the move was one that must be thought of as right in general manager Jim Rutherford’s wheel house. It was a value for value trade that brought in not just the brother of the team’s best player, but also a player that by all accounts wanted to play for the Hurricanes (even if that was just because Eric happened to be on the team). The second move saw JR step well outside of his comfort zone and sign the high priced free-agent Alexander Semin to a one-year $7M deal.
In the early going of this shortened season it’s hard to tell which move is paying off better. Jordan Staal with his size and skill is giving the Canes a very effective second line that can come hard charging after older brother Eric’s first line. Jordan’s presence creates depth and advantages that the Canes have not had for a long time, if not ever. Alexander Semin is causing all kinds of match-up problems for opposing teams as they are forced to cover both Semin and Eric Staal at the same time. Semin’s skill and play-making abilities are making this job all the more impossible, helping not just the first line but the rest of the team as well.
The problem for the Canes is that while Jordan Staal is locked up long term Alexander Semin is singed only for this season and could potentially leave as a free agent this summer. While the Canes have nothing invested in Semin other than this year’s salary, he does appear to be a great fit, and not a player that the Canes would like to see walk out the door after seasons end. A longer term deal between the Canes and Alex Semin seems at this point to be in the best interests of both sides, but this may not be as simple as both sides coming to an agreement on price and signing on the dotted line. As hard as it may be to believe there may be some salary cap concerns surrounding extending Semin.
While projecting the salary cap going forward is a fool’s errand, we do know what the cap will be in the 2013-14 season and can make a reasonable assumption about the cap in the following season. As per the CBA the salary cap next season will be $64.3 M and it will not go below this level in any subsequent season. As to when and how fast it may rise is anyone’s guess. Revenues will now be divided 50/50 between owners and players and the salary cap ceiling shall be 15% above the mid-point. This means that for the salary cap to grow beyond the $64.3M floor that total annual league revenues need to rise above $3.355B. In the last year of the previous CBA revenues were roughly $3.2B, an all-time high. This means that before the salary cap can increase revenues must grow roughly $155M above the previous high. Given the path revenue growth was on, coupled with how the league attendance has tracked so far and the way revenue has grown in the NBA since their lockout it is possible that the salary cap for the 2014-15 season may be above the $64.3 M, but it’s likely not going to be significantly greater than that. Beyond the 2014-15 season is anyone’s guess, but it seems reasonable to assume the salary cap will be higher than $65 million and less than $70 million.
For the purposes of this exercise let’s make a few assumptions and test how they impact the Canes cap situation.
- Sign Semin to a 3 year $18 million dollar deal. This is a bit of a discount for a player of Semin’s skill, considering Semin made $6.7 million last season and $6 million the year before. However, both of those deals were one-year deals, so perhaps Semin will take a lower average annual value for a longer term. The $6 million value also matches Jordan Staal’s cap hit, which seems if nothing else a good comparison for this exercise.
- Extend most bottom 6 forwards longer term (3 years) for amounts similar to current cap hits. This includes players such as Nodl, Brent, Westgarth, Wallace, and Bowman. This does not necessarily mean that those specific players are retained, only that whoever fills that roster slot does so for a price similar to what is being paid today.
- Extend Chad LaRose for a one-year $1.5M contract. As with the other bottom 6 forwards this does not necessarily have to be LaRose, just a player at that salary level. The key with this roster spot is that it is only one year, and not beyond the 2013-14 season.
- Bobby Sanguinetti and Joe Corvo are not retained at the NHL level after this season and Ryan Murphy is added to the NHL line up after this season. Given that Murphy has a cap hit of $1.35 million it’s very possible that either Corvo or Sanguinetti could be extended for one year at a cap hit similar to Murphy’s. Such a move would net out to roughly zero impact for the purposes of this exercise.
- Jussi Jokinen is not re-signed when his contract expires.
- Jiri Tlusty is extended when his contract is over for $3 million per. Tlusty is currently making $1.6 million per, and playing with Staal and Semin looks to be taking a big step forward. In many ways this assumes that Tlusty assumes Jokinen’s slot in the salary depth chart. Again, I think this is reasonable.
- Jamie McBain is retained for $2.25 million per year, which is a raise over his current deal that pays $1.8 million per year.
- Justin Faulk is given a contract with an average annual value of $3 million after his entry level deal expires. This contract gave me the most heart burn. I think it’s very possible that Faulk’s next deal could be closer to $4 million per year, especially with Tim Gleason’s contract as a comparison for the team.
- For the 2014-15 season I’ve extended Joni Pitkanen for one year at $4 million dollars. For reference, this is the last year of Marc Staal’s current contract and his cap hit is $3.975 million. Make of this what you will. I’ll refer to this as the Ghost Marc Staal.
To illustrate these assumptions I’ve created a spreadsheet on google docs. All values highlighted in Yellow are assumed values.
Per CapGeek.com the Hurricanes currently have 15 players signed for the 2013-14 season for a combined cap hit of $50.665M leaving $13.635M in available space. Free agents for the 2013-14 season other than Semin include Chad LaRose, Andreas Nodl, Tim Brent, Tim Wallace, Bobby Sanguinetti, Joe Corvo, and Dan Ellis.
Based on these assumptions the Canes will have a 20 man roster with a cap hit of just over $63 million dollars in the 2013-14 season when the NHL salary cap will be $64.3 million dollars. That leaves the Canes with just $1.25 million dollars in wiggle room. It’s not an impossible situation, but it’s likely a little tighter to the cap than a GM like JR would like. It also doesn’t leave much wiggle room if the Canes make a deep playoff run and some players are due raises as a result or if the Canes wanted to carry more than 20 players on the NHL roster.
For the 2014-15 season the Canes have 8 players under contract with a cap hit of $37.425 million. Adding on the assumptions above the result is a 20 man roster with a salary cap of $61.94 million dollars. For reference, keeping Joni Pitkanen, and swapping Marc Staal’s cap hit for Jamie McBain’s would push the salary cap level up to roughly $64 million. While that’s below the cap it certainly doesn’t leave a lot of wiggle room, especially if Semin’s contract is for higher than an average annual value of $6 million or Faulk’s is higher than $3 million.
Unfortunately, the hits just keep coming. The 2015-16 season is perhaps even more constrained. The Canes currently have 7 players signed for the 2015-16 season for a cap hit of $36.525 million. Based on the scenario I’ve created which also include extending Semin, Tlusty, Bowman, McBain and Faulk as well as adding Ryan Murphy to the roster puts the Canes at $53M with just 13 players signed. Using the $70M max suggested earlier for the salary cap that season, that leaves at most $17million to sign 7 to 8 players. While that is over $2 million per player on average this is the same year that Marc Staal enters free agency. Marc Staal could easily command the $6 million salary brother Jordan gets, eating in to a big chunk of what at most will be $17 million dollars in available cap space. While many of the holes on that team will be bottom 6 forwards, there is still a need to re-sign Dwyer, a blue liner, find a back-up goaltender, and a third line center. Again, this task is not impossible, but difficult, even if some of those holes are filled by draft picks. Quite possibly it may be better from a cap management position for the Canes to fill these holes by value signings with a set salary as opposed to players on their entry level deals with potential bonuses.
Are there places to save money? There are some, but they are limited. If we assume both Staal’s, Skinner, and Ward are untouchable, it is not possible to move out a lot of salary with moving only one player once Semin is signed. It is already assumed Jussi Jokinen is allowed to go to free agency when his contract is complete. Joni Pitkanen (Ghost Marc Staal) is extended for only the 2014-15 season, and neither salary is factored in to the 2015-16 season projection, where either player could easily be paid $5 million a year, and Marc Staal could get closer to the $6 million bother Jordan is being paid. The Canes could try to fill the Pitkanen/Ghost Marc Staal roster spot in 2015-16 with a lower priced player, but that’s likely to leave a gap in the top 4 somewhere. The Canes could try to drive a harder bargain with Jiri Tlusty than the $3 million average annual value deal that is assumed, but it is going to be hard for the Canes to get much below that level if Tlusty keeps up his current play and sticks on the first line.
That leaves only a trade to send out salary to gain some breathing room. The only high level salaries left for the 2015-16 season that could potentially be moved are Tim Gleason at $4M and Tuomo Ruutu at $4.75M. The problem with any such trade is that Ruutu has a no movement clause and Tim Gleason, who has a similar clause that expires before the 2015-16 season, will have to be replaced, and if the Canes are not willing to accept a reduction in skill they won’t get much of a reduction in salary without finding a competent replacement through the draft. It’s hard to hazard any sort of guess that far out. One option for the blue line in that 2015-16 season is to go with Marc Staal/Joni Pitkanen, Justin Faulk, Harrison, McBain and Murphy with a low price 6th, such as Michal Jordan, but that only saves so much. In that case Faulk and Pitkanen/Marc Staal would be the two high priced defenders, with Harrison, McBain, and Murphy more reasonable priced, and a 6th player on the cheap. Even if you start trying to swap out some of the players, you still end up with a similar amount of money spent on the defense relative to the cap.
It looks possible for the Canes to sign Alexander Semin to a contract extension, but to do so the team will have to walk a tight rope to field a deep roster without a large jump in the salary cap. Anything above $6 million for Semin is going to take away what little breathing room the Canes may have. The ability to acquire Marc Staal or re-sign Joni Pitkanen could come down to an ability to move Tuomo Ruutu or a willingness to utilize an amnesty buyout on such a player. For as much hockey sense as it makes to lock up Alexander Semin, it might not make the most cap sense.