Nikolai Khabibulin is no longer a good goaltender. He hasn't been for quite some time, but his performance last season was truly abominable. His save percentage was among the lowest in the NHL, thanks in large part to his (lack of) performance when the team was short-handed. Even if that number comes back a little bit - and I expect that it will - it's overwhelmingly likely that the man who will turn thirty-nine during the 2011-12 season is going to be well below average... if he can stay healthy. As such, it would seem reasonable for the Edmonton Oilers to use a buy-out to get out of that contract. The worry is that this would have an impact on the Oilers' cap situation for next four years. I don't think that this is true, and will look at why after the jump.
In a normal buy-out situation, it would be true that the contract would have an impact on twice the remaining length of the deal. But if we use the Buyout Calculator provided by Capgeek, we see that this isn't the case for Khabibulin or for any other players who signed a contract when they were thirty-five years or older. I suspect that's because of this clause (50.2.c.iv) in the Collective Bargaining Agreement:
All Player Salary and Bonuses earned in a League Year by a Player who is in the second or later year of a multi-year SPC which was signed when the Player was age 35 or older... regardless of whether, or where, the Player is playing... shall count towards the calculation of Actual Club Salary.
So regardless of whether or not the player is playing, the cap hit will remain the same. I'm not 100% sure that the buy-out rules don't take precedence here, but Capgeek seems to think that they don't. If this is the case, there is virtually no reason for the Oilers to keep Nikolai Khabibulin on the roster since buying him out would save money (the cost would be $1.25M per year over four years as opposed to $3.75M per year over two years), and wouldn't cost the club any extra cap space in the seasons that the Oilers have targeted for Stanley Cup contention. It would also help them to ice a better team in 2011-12 and 2012-13 since they could almost certainly spend $1M per year over the next two years, and get substantially better performance (while still saving money!). This contract has cost the team enough. It's time to buy the man out.