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A quiet day Sunday for the Edmonton Oilers after a flurry of signings on Canada Day that included 5 additions to the 50-man list through the signing of free agents to NHL-class contracts, with a further 4 players added on minor league pacts to the roster of Bakersfield Condors.
The league as a whole drew its collective breath on Day 2, as just 5 (of 26) contracts announced Sunday carried a cap hit of as much as $800,000. Of most interest to Oilers fans was the announcement that Seattle Kraken had signed Kailer Yamamoto to a 1-year deal at $1.5 million, officially closing the book on a popular player whose contract had been traded by the Oilers to Detroit on Thursday. He was waived by the Red Wings on Friday, bought out on Saturday, then signed a new deal in his home state on Sunday. Talk about a whirlwind few days.
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Sunday’s relative calm gives us an opportunity to review Saturday’s action and specifically its signature moment from an Edmonton perspective. The addition of RW Connor Brown on a bonus-heavy contract is a signal that Ken Holland is “all in” on the 2023-24 season being the WIN NOW window.
Throughout his tenure in Edmonton which has now entered its fifth year, Holland has not been shy about exchanging future assets for current ones. He has consistently traded away draft choices for rentals at the deadline, adding in more (or upgraded) draft picks to buy down the cap hit of those acquisitions, and even trading away picks simply to shed salary from his own roster. But the signing of Brown has opened the door to another way of borrowing from the future, as the Oilers have found a way to defer over 80% of the player’s 1-year, $4,000,000 cap hit to the following season.
Here are the details, adapted from the outstanding CapFriendly.com.
What set Brown’s contract apart, along with that of Max Pacioretty, is the wrinkle in the CBA that allows free agents coming off a major injury to sign a contract whose ultimate payout is based on performance bonuses — an option usually only available for the very young (Entry Level Contracts) and the very old (35+ contracts). The objective, presumably, is that such mid-career players as Brown and Pacioretty don’t get shut out because of health concerns.
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As it happened, both signed one-year pacts for $4,000,000, with Pacioretty’s new deal with Washington Capitals split 50/50 between salary and bonuses at $2,000,000 each.
In the case of Brown, the salary component was literally minimized to $775,000, with the entire bonus of $3,225,000 earned if he simply plays 10 games this season. That bill will come due in the 2024-25 season, when the cap is expected to go up $4 or $5 million. Assuming that does happen, and that Brown plays his 10 games, the Oilers may have already spent roughly two thirds of the cap increase before that 2024-25 season even opens for business. It’s a heckuva mortgage on a season where the Oilers will almost certainly remain in cap jail due to the structure of their payroll, which features major commitments to key players many years into the future.
Let’s update the projected 2023-24 NHL roster presented here just a couple of days ago on the eve of free agency. Due respect to Lane Pederson, Drake Caggiula and the others, the only new signing whose name can be written in ink is Connor Brown. Here’s the updated roster with each position listed in order of cap hit.
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It’s an extremely top-heavy group with 11 of the top 12 locked up for at least the next 2 seasons, checking winger Warren Foegele being the lone exception. At $2.75 million, he is the least expensive of those dozen players (tied with Brett Kulak). Even if the Oilers let Foegele walk at season’s end, the “savings” won’t be enough to pay Brown’s bonus in 2024-25. And there’ll be one hole of the roster where Foegele used to be, and perhaps another in Brown’s spot.
Put another way, this is a plausible scenario:
….with all 11 of the other major contracts besides Foegele’s slated to be still in place. That’s going to be a major headache when the time comes for whoever is in charge by then.
First, though, comes the 2023-24 season. One thing a healthy Brown will do in the season to come is provide the Oilers with a natural right winger who is almost certain to outperform his (temporary) cap hit. That will be a pleasant change for a club that has employed just 4 natural right wingers in the past 2 seasons:
Look at that list. The top 3 guys on it have all been essentially given away by the Oilers over the past 12 months in their ongoing pursuit of opening up cap space:
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Three RWs, three $3 million AAV contracts (all negotiated by Holland), all sent away for no return but also with no retention. The Oilers filled their hole(s) on RW by moving over C Derek Ryan and LWs Zach Hyman and Foegele at various times. Those options remain in place for the upcoming season, but now at least there is a legit right winger in Brown who will be in the line-up at that position every night, presuming (and fervently hoping for) good health.
In each case Holland came out ahead in the short term. In effect he replaced Kassian with Kostin, saving $2½ million against the 2022-23 cap. He replaced Puljujarvi with a discounted Nick Bjugstad, saving another $2½ million (pro-rated) against that same 2022-23 cap. Now he’s replaced Yamamoto with Brown, saving $2.3 million against the 2023-24 cap.
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In all three cases, what amounted to a 1-for-1 exchange (involving 2 separate but related transactions in each instance) upgraded the on-ice roster while also opening up significant cap space in the short term. Sorcery!
Alas, the price he had to pay was a lot. Kostin and Bjugstad both left town this weekend with zero return because the cap-strapped Oilers simply couldn’t afford to pay either man the $2 million AAV pacts they accepted in their new cities. Both were short-term fixes in Edmonton who will be missed. And as mentioned, over >80% of Brown’s new pact will come due a year down the line, turning those short-term cap savings into future debt.
If nothing else, these transactions underscore my take that Ken Holland is “all in”. He went for it in the spring of 2023, was aggressive with trades, used every dollar of available cap and built a team that seemed ready to contend until it wasn’t. The second round loss to eventual champs Vegas Golden Knights left a bitter taste that lingers on the palates of Oil fans.
And now he’s already “all in” for 2023-24, and on the first day of business at that. By borrowing against future cap he is maximizing his roster for the upcoming season at the expense of the one after.
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A significant point that is probably not lost on the alert reader: Ken Holland’s own contract in Edmonton was for 5 years, and upcoming is Year 5. Might he be loading the decks to make one last run at the Stanley Cup before he turns over the reins?
It certainly makes sense to go for it this year either way. As the only contracts (not: players) left from the Peter Chiarelli era, time is starting to run out on the max-term deals of Connor McDavid (3 more years at $12.5 million) and Leon Draisaitl (2 more years at $8.5 million). Despite their richness, they are likely the 2 most outperforming pacts on the team, both inherited by Holland. He has an obligation to those players as well as to himself to do everything in his power to WIN NOW.
Whatever the outcome on the ice, it’s a very realistic scenario that Holland might step aside (or upstairs) at season’s end, leaving his successor significant deficits in a couple of key areas. The new man would enter the 2024 draft without a third or fourth round draft pick and maybe more depending on what happens at the next deadline. And he will almost certainly face all or most of Brown’s massive bonus as a carryover that will impinge the club’s ability to do business this time next year.
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The other scenario sees Holland extended and facing those same deficits himself in 12 months’ time. If his team has won the Stanley Cup in the interim, it will have been worth it.
Here’s a last look at the depth chart with some names shifted around to reflect their projected role on the team, although I’ll leave to the reader the pleasant exercise of making up their own lines and pairings in the top 6/top 4. These are mine:
With the Brown addition, the Oilers are committed for $76.343 million already, leaving a little over $5 million to sign all 3 RFA’s that would bring the team to a 21-man roster. Not a lot of room to move already, leaving Holland with some tricky but critically-important negotiations with Evan Bouchard and Ryan McLeod in the immediate future.
Recently at the Cult of Hockey
LEAVINS: Oilers lock down their latest Top-6 forward in Connor Brown — 9 Things
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STAPLES: Oilers sign forwards Drake Caggiula and Lane Pederson
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Follow me on Twitter @BruceMcCurdy
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