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The Oilers are now in offseason mode after getting swept by the Winnipeg Jets in round one of the 2021 playoffs. Ken Holland has plenty on his plate in the upcoming weeks and months. There are a handful of players in Edmonton who will become free agents that he’ll need to tend to, there are at least a couple contract extensions in the next 12 months, and he’ll need to come up with a plan as to how much he’ll make a play to unrestricted free agents.
Also on the table: buyouts. Ken Holland’s end of year press conference made it perfectly clear that buyouts could be a way for the Oilers to shed a contract or two by absorbing a smaller cap hit in order to free themselves from a contract or two. The Oilers need to exercise care here; a buyout will offer a temporary cap savings, but a portion of the cap hit will remain for double the time of the remaining contract.
From my vantage point, I’ve got two deals who are good buyout candidates. James Neal (5.75 MM x 2 years remaining) and Zack Kassian (3.2 MM x 3 years remaning). You’re going to hear a lot about Mikko Koskinen’s name being a good buyout, and that might come to fruition (4.5 MM x 1 year remaining), but you might as well kick tires on retaining 50% in a deal if you’re going to spread the cap hit over two years instead in a buyout.
If the Oiler are going to buyout just one deal this year, it’s got to be James Neal.
Neal was acquired two years ago when the Oilers shipped Milan Lucic to Calgary. James Neal was the exchange, the Oilers would also be responsible for 12.5% of Lucic’s remaning cap hit. It was (and still remains) a good deal for the Oilers if for one thing - the Oilers are able to buy out Neal. The Flames cannot realistically buy out Milan Lucic because a significant chunk of his cap hit is based on signing bonuses and Calgary is not subject to relief via buyout.
THE DEAL
James Neal signed a five year deal worth 28.75 million with the Calgary Flames on the second day of free agency in 2018. It was a rich deal, and it was given to Neal after a season that saw him score 44 points in the inaugural season for the Vegas Golden Knights. Neal would struggle in his inaugural campaign with the Flames and manage just 19 points in 63 games before being dealt to Edmonton the next summer.
Neal’s last two seasons in Edmonton have been a mixed bag. Neal amassed a 31 point effort in 2019-20 (17 of those came from the power play), but was often healthy scratched in the abbreviated 2020-21 season where he put up just ten points in 29 games. Neal was held out for ten straight at one point this season, and was a healthy scratch in two of Edmonton’s four playoff games. Neal played 11 minutes and 9:45 in two games against the Jets.
THE BUYOUT
If the Oilers buyout James Neal, the savings on the cap would be immediate and profound.
James Neal has two years remaining on his deal at 5.75MM per. Buying him out saves the Oilers nearly four million dollars a season for each of the next two years. Instead of being on the hook for Neal’s 5.75MM, by relieving Neal the Oilers would be responsible for a much tidier 1.92MM for the next four. That’s nearly a four million dollar cap hit savings for the next two years, something the Oilers will no doubt put to use. The bad? The Oilers would be paying a fraction of a contract for a player to not play for them, it would last until the end of the 2024-25 season. The Oilers are just now coming off of buyouts to Benoit Pouliot, they have two more years of paying Andrej Sekera.
The Oilers have a projected 22 million in cap space this offseason. They’re coming up on decisions for Ryan Nugent-Hopkins, Adam Larsson, Dmitry Kulikov, Alex Chiasson, Tyler Ennis, and however they’d like to play their hands in free agency. 3.833 million in additional cap space is over a 15% increase, or the potential difference between having and not having a top six left wing.
As a rule, buyouts are a last case scenario for both a club and the player. In this case, a buyout for James Neal will free up significant cap for the Oilers, while giving Neal a chance to embark on the next chapter of his career in a new city.