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Flat Salary Cap is big problem for Tampa Bay Lightning

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How can they deal with it?

Pittsburgh Penguins v Tampa Bay Lightning Photo by Scott Audette /NHLI via Getty Images

The Tampa Bay Lightning were already going to be looking at some big changes this summer. The pause to the season has given them some more time to plan and figure out what they can do to deal with the salary cap. If not for the pause, we probably would already have some answers to the variety of variables that are in play. The biggest of them would have been what the salary cap was going to go up to. Now with the forthcoming CBA agreement, we know that it will stay at $81.5 million for next season. And that’s bad news.

All salary and contract clause information comes from CapFriendly.com.

Over the past year, and really the past two or three summers, I’ve known that there would have to be some changes made to the roster. Alex Killorn and the pending change of his No Trade Clause to a Modified No Trade Clause that allows him to submit a 16 team no trade list was certainly a prime candidate to be moved before all of this. There was also a strong possibility of the team needing to convince one of their other forwards with a No Trade Clause to accept a trade or be forced to trade a young player without such protections.

As it stands right now, the Lightning have $76,166,666 committed for ten forwards, three defensemen, and two goaltenders. With an $81.5 million salary cap, the Lightning have $5.33 million to fill out the roster. The Lightning’s restricted free agent group is topped by Mikhail Sergachev, Anthony Cirelli, and Erik Cernak with Mitchell Stephens, Carter Verhaeghe, and various AHL prospects also being up for new contracts as RFAs.

From any angle you look at it, the Lightning are in a tough spot. The threat of an offer sheet may be even greater this offseason than it was last summer when offer sheets were speculated ad nauseum. After all of the talk the Carolina HurricanesSebastian Aho was the only RFA to actually do it, signing with the Montreal Canadiens and then having the offer accepted by Carolina to keep him with the Hurricanes.

This year’s group of RFAs isn’t as heralded as last year’s that contained Mitch Marner, Brayden Point, Matthew Tkachuk, and Sebastian Aho. However the flat cap has already kicked off the speculation on what RFAs are out there, including the Lightning’s two biggest names in Cirelli and Sergachev. The question will be where those player’s priorities lie; getting paid more now or staying with a Stanley Cup contending team.

Hockey has a culture of putting team first and it’s possible that the Lightning’s RFAs could choose to do the same thing. But that is not something any of us can properly speculate on as we are not privy to the personal thoughts of the player or their discussions with their family and agents.

Back in September, I predicted some salary cap numbers for Sergachev and Cernak of $5 million and $3-3.5 million respectively. I believe that for Sergachev that number still holds true as the Lightning would be looking for a bridge contract of three years on Sergachev and Zach Werenski (3 years, $5 million) and Charlie McAvoy (3 years, $4.9 million) still look to be great comparables for a bridge deal. Cernak regressed a little bit offensively this year and I think more of an argument can be made now for a 1-2 year deal at $2.5 million for him.

Any predictions I made about Anthony Cirelli prior to the season would have been made moot by his increased offensive output and larger role in the top six this season. The comparables for Cirelli are a little more varied that makes a prediction difficult for me to make. It could range anywhere from $3 million (Max Domi) up to $5.5 million (Travis Konecny) depending on how you view his production and his potential.

There are a number of scenarios that I could see playing out. At this point, I wouldn’t put any bets on which way this could go because there are so many floating variables without sufficient data to begin to fill those variables in. So I will try to outline the scenarios I can envision happening as best I can to give you some insight into what could happen.

Scenario 1: Someone accepts a trade

Alex Killorn has a $4.45 million salary cap hit and, as previously mentioned, a Modified No Trade Clause. If the Lightning could convince one of Tyler Johnson ($5 million), Yanni Gourde ($5.166 million), or Ondrej Palat ($5.3 million) to also accept a trade, that would create $9.45 million to $9.75 million in cap room to bring the total cap space to $14.75 to $15 million.

If I was asked who I think was the most likely of the three to accept a trade, I’d go with Tyler Johnson for a couple of reasons. With the current glut of centers on the roster, Johnson has spent more time playing the wing the past few seasons. He’s also been bounced around a lot between lines. His production has also been up and down, which could affect his trade value. Johnson could be more willing to accept a trade to a team where he could re-establish himself as a second line center. He turns 30 at the end of the month though and will be 33 during the last year of his contract. He’s definitely into the realm of age-based regression, which would also limit his trade value.

One benefit for a team acquiring him though is that he is owed less in salary than his cap hit for the remainder of his deal and it does not include any signing bonuses. The acquiring team would owe $17.75 million in salary over the final four seasons of the trade while taking a $20 million salary cap charge over that time.

Yanni Gourde is a possibility, but he has longer until his No Trade Clause becomes a Modified No Trade Clause. He could welcome a trade where he would have a bigger role than he has gotten with the Lightning. However, his dip in production and the fact that he hasn’t been able to push his way into a bigger role on the team would lower his trade value.

Ondrej Palat would likely have the best trade value of the three. He showed this past season that he had moved past some lower body injuries that had slowed him down the previous few seasons. He also only has two seasons left, and, like Johnson, is owed less in actual salary than his cap hit. But he’s also the least of the three I’d like to see traded since the Lightning lack some depth on the left wing side of the ice and could use his two-way play over the next couple seasons in the top six.

The Lightning would still need to convince their RFAs to take slightly less to make things work. If Sergachev signed for $5 million, Cirelli for $4.5 million, and Cernak for $2.5 million, the Lightning would only have $3 million to fill in at least three forwards and one defenseman. With a $700,000 minimum salary, the team would only be able to field 12 forwards and six defensemen on the roster.

If the team could squeeze those three players a little bit to make enough room to get an extra skater on the roster, that’d be great. Otherwise, the Lightning would find themselves in a position where they could have to play a game down a skater before being able to get salary cap relief to call up a player.

This scenario is still asking for Sergachev, Cirelli, and Cernak to not push for as much as they probably should be paid on bridge contracts. Certainly, none of them would be able to get a long term deal that would take them to unrestricted free agency because the team simply would not be able to afford the cap hits a longer term deal would require.

Scenario 2: The RFAs take really cheap 1-2 year deals to get past the squeeze.

The Lightning have shown that they will reward players that sign bridge contracts with long term contracts that will pay them well. That list is quite long. The team has a solid history of doing so. Even considering that many of those deals were signed with Steve Yzerman in charge, Julien Brisebois was still a part of that process serving as the front office’s expert on contracts.

This is the scenario I find to be one of the least likely to happen. Each player that agreed to do this would be taking a big risk. If they were injured or had a large regression in 2020-21, they would be hurting their earnings down the road instead of getting their guaranteed money now. They would all have to show a great amount of selflessness of putting the team over their own personal finances. I honestly cannot fault any player that tries to get what they’re worth out of a team. Hockey players get chewed up and will end their career with lifelong physical ailments from their time playing and deserve to be compensated for that.

However, if the Lightning were able to convince Sergachev, Cirelli, and Cernak to all take one or two year deals significantly below market, say, between $6 to $7 million in total for the three of them, they’d be in the same position as Scenario 1 of just barely getting to 12 forwards and six defensemen, but with only having to trade Alex Killorn to get under the salary cap. But to do so, all three would need to be on board with it.

What it would do, especially if they took one year deals, is let the Lightning get to 2021-22 where Palat and Johnson will both have Modified No trade Clauses that would allow them to be moved and free up significant cap space. At that point, the Lightning could then pursue longer term deals that would take the players in unrestricted free agency. The players would be giving up a year of higher income to be paid more in years two and three, as well as locking in more total guaranteed money with a long term deal over a bridge deal.

Two year deals would also have a similar effect as the Lightning can get past some of their salary obligations as well as potentially get to a point where the salary cap will start to go up again as revenue returns to normal and hopefully increases.

Scenario 3: The Lightning must trade an RFA or allow them to walk to an Offer Sheet.

The reality of the situation, is that if one or more of the RFAs push for a longer term deal or a full value bridge deal, and the players with No Trade Clauses choose to exercise their rights to refuse a trade, the Lightning may be forced to trade Sergachev or Cirelli. The return for either player could be good, but the Lightning would also have less leverage with the salary cap hanging over their heads.

When dealing with a hard salary cap system, losing players you don’t want to part with (*cough* J.T. Miller *cough*) is a part of the bargain. And so it is a situation that the Lightning will have to be prepared to deal with if it comes to pass. The offer sheet compensation gives us some idea of what the compensation could look like in a trade. Below are some sample contracts that were signed by comparable players and the draft pick compensation that would be owed to the Lightning if they refused to match such an offer sheet.

  • 3 Years, $5 million (Zach Werenski) - 1st round pick, 3rd round pick
  • 6 years, $5.5 million (Travis Konecny) - 1st round pick, 2nd round pick, 3rd round pick
  • 6 years, $6.75 million (Ivan Provorov) - 1st round pick, 2nd round pick, 3rd round pick

This is certainly the scenario I least want to see happen. But it is a scenario that is within the realm of possibilities and we as fans should be prepared for that possibility. It would suck to lose either Sergachev or Cirelli. Both are valuable young players that could be big parts of the Lightning’s core moving forward. But being valuable makes it harder for the team to hang on to them through this salary cap crunch.