The Oilers' Cap Management Problems

Entering the 2013 off-season, things were starting to ever-so-slightly look up for the Oilers franchise. The team had just taken their first meaningful step forward in the standings (up to 23rd) after three consecutive #1 overall draft picks, Sam Gagner had put produced points at the highest rate of his career during the shortened lockout season, and best of all, the franchise had finally fired the worst General Manager in their history, and possibly league history, Steve Tambellini.

There were signs that the progress was an illusion as the team's underlying statistics suggested the improvement was based more on randomness than on genuinely getting better, but no matter how small the progress, it wasn't 30th and it left Oiler fans with some measure of hope for another step forward to come in 2013/14.

Craig MacTavish's first summer as GM was a mixed bag of good and bad. There were highs (David Perron for Magnus Paajarvi) and lows (we'll get there) but overall, the consensus was MacTavish had done some decent things, but likely not enough to make the Oilers a playoff team yet.

Some Additional Context

During the lockout year, the Oilers had set themselves up very nicely from a cap standpoint. They had finished the 2013 season with the 4th lowest cap total in the NHL, and the salary cap was increasing by another $4.3 Million. Over the course of that summer, the Oilers even managed to rid themselves of poor contracts including Eric Belanger and the final year of Shawn Horcoff's deal, not to mention the expiring deals of Ryan Whitney and Nikolai Khabibulin.

Their best player, Taylor Hall had also signed a very reasonable long-term contract which was set begin the following year, and while less of a bargain, they had also locked up Jordan Eberle on a similar contract.

Despite ridding themselves of poor contracts and having one of the best financial situations in the league from a cap standpoint, the seeds were planted that summer that could soon bloom into a full-on cap crunch for the team.

Incremental Inefficiencies

It was really the 2013 off-season where some questionable moves were made that have laid the foundation for a growing problem, but because the team was so flush with cap space at the time, the problems were largely dismissed as irrelevant because the team had the cap room available.

Andrew Ference

I feel like I don't need to re-state my issues with the Ference deal, but to summarize, the Oilers needed a top pair (or at least top 4 Dman) and instead signed Ference, a bottom-pairing player at the time he was signed, to a 4 year deal at $3.25M per year and a full NMC. Ference was 34 years old at the time and his decline from effectiveness was totally foreseeable, but the Oilers signed the deal anyway. Making this a 2 year deal still wouldn't have made the signing totally excusable, but it would have greatly minimized the problems that this deal creates. (If only someone could have foreseen this problem!)

Ference is likely going to be a buyout candidate by year's end, which means the team could end up carrying dead cap space for the next 4 seasons as a result of signing this deal.

Sam Gagner/Teddy Purcell

The Sam Gagner contract might not seem like a logical thing to talk about in the present tense, but it does have a lingering effect on the team's current situation. I have some empathy for MacT here because Gagner cashed in following his best offensive season and got an expensive deal before a serious injury derailed him right away the following season. Still, Gagner was overpaid at $4.8M and that fact made the process of dealing him more complicated. The team ended up doing ok in the move, netting a bonefide NHL player in Teddy Purcell, but Purcell himself is overpaid at $4.5 Million with another year remaining after this season, which adds to the problem even if he does contribute in a bottom six capacity.

Had Gagner been signed to a more reasonable deal, the potential return the Oilers could have netted would have been greatly increased, rather than swapping one team's cap issue for another's.

Matt Hendricks

The Matt Hendricks problem might be one that people dismiss away, but you shouldn't. During the debacle that was the 2013/14 season, MacT decided it was time to purge Devan Dubnyk from the roster. He also wanted to add some size and toughness to the team, so in that way, the trade made logical sense...but looking at the money, it was a trainwreck of a deal. Dubnyk had a poor contract of his own, but it was set to expire that summer. Instead of waiting for the off-season to arrive when the team's fate for the year had long ago been written, the Oilers took Hendricks' 4 year, $7.4Million ($1.85M per season) deal that Nashville regretted signing only months after having put ink to paper. (I noted the long-term implications of this trade at the time in a piece where...lets just say I was frustrated.)

To their credit, the Oilers have put Hendricks in the right role this season, which is better, but when you consider that players like Dan Winnik and David Moss were readily available to be signed for less money this summer (Moss, is only making $800,000), its still an inefficient use of cap space. An argument could be made that Boyd Gordon deserves inclusion for this same reason, but Gordon fills such an essential role, and does it so well that to me, his contract was a premium teams should be willing to pay.

Nikita Nikitin

Jumping to the summer of 2014, the Oilers needed some good press and some proven NHL bodies to man their incomprehensibly poor blueline. So, Craig MacTavish negotiated for the rights to pending UFA Nikitin in hopes of signing him before July 1st. That's all fine, though personally, I consider Nikitin a continuation of the trend of adding more bottom pairing Dmen rather than paying the price to fix the problem by getting a high-end player. Either way, Nikitin is an NHL defenceman and the Oilers badly needed some.

MacTavish knew that he wanted to get a short term on this contract because he has Martin Marincin, Oscar Klefbom and Darnell Nurse percolating below the surface and did not want to block their long term progression. I think everyone understands the logic there. However, he paid a VERY steep price to keep the term down. Nikitin will earn $4.5M again next season and is a player that is really inconsequential at this point. He's not a positive difference maker and he's ideally suited for the role on the 3rd pairing on the left side. Unfortunately, that role is probably also the best place for all of Nurse (when he arrives in the NHL to stay), Klefbom and Ference as well, but only one player can be the recipient of those protected minutes, which means the others will be exposed. Not exactly the return you want from $4.5M next year.

Justin Schultz

The blurred goggles that the Oilers use in evaluating Justin Schultz are difficult for me to understand. They see what's possible rather than what exists today. Schultz has unquestionable skill, but he's being paid more than $1M more than other comparable players like Tyson Barrie. While Schultz's contract is only for the one season, the team will have to qualify him to that number, which essentially makes it a minimum 2 year contract unless they opt to pay him even more next season. If Future Norris turns into the player that Craig MacTavish touts him to be, this deal is great, but in the here and now, its a significant overpayment for a player who is best suited in the 3rd pairing with endless amounts of powerplay time.

Its Not All Bad Contracts!

I will note that during the last 24 months, significant portions of the team's cap space has deteriorated due to key young players like Hall, Eberle and RNH transitioning beyond their ELC's, and while that is of course responsible for a large portion of the decreased cap space, it is also a fact of life that will be continuing in the coming years with players like Yakupov, Marincin, Klefbom, Nurse and Draisaitl. Many of those players won't earn $6M per year, but they will need raises, and the team needs to be prepared for that eventuality. Right now, they're not doing a great job of it.

Is This Really a Big Deal?

Well, the Oilers went from having over $16M in available cap space in the lockout shortened 2012/13 season to approximately $7M in 2013/14 and this year will have less than $3M and the possibility that that number could drop lower if Yakupov and Draisaitl (should he stay for the full season) manage to hit a significant number of their ELC bonuses.

Looking ahead to 2015/16, at forward, only Steve Pinizotto, Will Acton and Jesse Joensuu will be unrestricted free agents and come off the books. The team will need to give some form of raise to Nail Yakupov and Mark Arcobello (or their replacements if they do not return) as both are currently making less than $1M this season.

On the blueline next season, the team will have to deal with "Jultz" as previously discussed, and the only other player with an expiring deal is Jeff Petry, who is really one of the only two non-ELC value-contracts the team has (the other being Arcobello, whose deal is also up as noted).

The team will also need to either re-sign or replace Viktor Fasth in goal, but Ben Scrivens is under contract again for next year.

What Does It All Mean?

It means that the Oilers have gone from a team with $16M in cap space to one with less than $3M in cap space and unless they turn this season around in a hurry, they will have blown through all of that financial flexibility without seeing any meaningful improvements in team performance. Sure, some of these deals aren't absolute boat anchors, but collectively, they make it harder for the team to improve, particularly next season in Nikitin's case. And while its only one more year...is there a single Oiler fan anywhere that is willing to sacrifice that year? I think 8 years is plenty long enough already thanks very much.

What it means is that from here on out, it only gets harder to add meaningful pieces to help this team improve because transactions now need a heavier focus on dollars in vs. dollars out.

What it means is that the Oilers are still standing at the base of a huge mountain to climb and over the last 24 months they've managed to break the ladder that was going to help getting to the top easier.