Making Sense of the Clarkson Trade

I’m an Oilers fan and blogger first and foremost. I feel that it’s important for me to reiterate that I’M NOT A LEAFS FAN! This is the only Leafs piece that you’ll ever see me do.

The reason that the Leafs are an interesting topic right now is because of the David Clarkson trade and how it impacts the Marner contract. It also impacts a divisional rival of the Oilers, and one player in particular: Nikita Gusev. More on him later.

Clarkson will be on LTIR for the entire season, along with Nathan Horton. Together, they combine for $10.55 million in cap space that will not see a second of ice time for Toronto next season. The Leafs will be able to go over the cap by a maximum of that same amount, which is massive for the Leafs since they still haven’t signed Marner.

LTIR is a complicated animal. I wrote a piece about it at the beginning of last season when Andrej Sekera was placed on the LTIR to start the season. The article was based on my understanding of the LTIR FAQ page on CapFriendly, which is very informative! This article is based on that same understanding of that same source. With that being said, I have been wrong when it comes to the cap before, so take this with a grain of salt; but here goes anyway.

Basically, what happens with LTIR is that a team is able to go over the cap without penalty for as long as the player is injured. The amount that the team can exceed the cap by is calculated by taking the CURRENT TOTAL CAP HIT (notice how this is NOT the $81.5 million salary cap), and adding the cap hit of the injured player.

It is important to note that the cap hit of the injured player IS included in the current total cap hit. Basically, when the value that a team can exceed the cap by after an LTIR transaction is calculated, the injured player is counted twice.

Are you with me so far? Good.

As soon as a player is deemed to be healthy, that player must be taken off of the LTIR, and the team must get back under the league’s salary cap. In Toronto’s case, neither Clarkson nor Horton have played a game in multiple years, so they will certainly miss the entire season. That is not an issue for the Leafs here.

What is an issue for the Leafs is the fact that their current total cap hit is $83,659,699 according to CapFriendly, and they still need to sign Mitch Marner. The Leafs can proceed in two ways here. They can use LTIR in the off-season, or they can use it during the season.

Now, as I’m sure most of you know, teams can exceed the cap by 10% in the off-season. That makes the off-season salary cap $89.65 million this year. If the Leafs were to put both Clarkson and Horton on LTIR today, then the Leafs would have a cap of:

$83,659,699 (current total cap hit) + $10.55 million (Clarkson, Horton) = $94,209,699

Theoretically, the Leafs could sign Marner to a contract with as much as that $10.55 AAV after putting both Clarkson and Horton on LTIR this summer; BUT there’s a catch: The CapFriendly LTIR FAQ page says the following in reference to off-season LTIR use:

“At the start of the season, the team’s LTIR relief & ACSL [current total cap hit] is recalculated when the 10% cushion is removed.”

Once the season starts, teams are no longer allowed to be over the cap by 10%. That means that all teams need to be under the $81.5 million cap by opening night. The ACSL (Accruable Cap Space Limit) is the current total cap hit for the team, which as of today for Toronto is $83,659,699.

It is my understanding that even if a team were to use LTIR in the summer, they would still need to get their total spending (excluding LTIR relief) below $81.5 million by opening night. At that point, the value of the LTIR relief would then be recalculated.

Let’s pretend that Toronto will use LTIR today and then sign Marner to a contract with an AAV of $10.55 million before the season starts. That would allow them to be cap compliant for the duration of the off-season; but then their ACSL (current total cap hit) would be $94,209,699 for the start of the season! That wouldn’t fly.

Where the situation gets cloudy is in the idea that Clarkson and Horton would have already been on LTIR for some time during the off-season. There might be something that I don’t know that would allow the Leafs to not have to pare their spending down to $81.5 million before LTIR relief by opening night if they were to utilize LTIR during the off-season. As my current understanding of the information being made available suggests, that isn’t a possibility.

If I’m wrong and someone has a different explanation of off-season LTIR transactions, then I’d love to hear it!

The other, more likely route would be to place Clarkson and Horton on the LTIR on the first day of the season, and then sign Marner to a contract that same day. In order to do that, the Leafs would need to bring their current total cap hit down from $83,659,699 to get under the $81.5 million cap. They would need to shed at least $2,159,699 before opening night.

When using LTIR to open the season, the goal is to get the current total spending as close to the cap as possible before placing the player(s) on LTIR. Doing so maximizes the newly calculated cap limit gained by using LTIR, as the Oilers did last season with Sekera. Signing Garrison and Chiasson, and sending Bear down to the AHL got the Oilers within $35,000 of the cap before putting Sekera on LTIR, which maximized the new cap limit for the Oilers last season.

Right now, according to CapFriendly, the Leafs have an active roster with 24 players (14 F, 8 D, 2 G). To add Marner and get down to 23 men, the Leafs will have to get rid of 2 players. The value of those two players needs to be at least $2,159,699.

One of the two players will need to be making over $1 million. The Leafs are short on expendable players making over $1 million. They could move Kessel’s $1.2 million in retained salary, but that would be tough to accomplish since there’s 3 years left there.

One name that I would keep my eye on is Zach Hyman. His cap hit is $2.25 million, which in itself would be enough to get the Leafs under the cap by opening night. The return would need to be a roster player making a maximum of $759,699 (that would allow the Leafs to hit the 23-man active roster limit and get under the cap by removing 2 players making the league minimum). That doesn’t seem like a fair return, so I would expect the return to be picks and/or prospects. Hyman normally plays on a line with Matthews; but with Matthews, Tavares, Nylander, Kapanen, Johnsson, Kerfoot, and Marner in the fold, the Leafs probably don’t need to have Hyman in their top 6. He has a M-NTC that allows him to submit a 10-team no-trade list, but that is a minor obstacle. I’m sure there would be a market for Hyman should the Leafs go that route.

Babcock loves Hyman, and Dubas moving a player that he likes would certainly be entertaining from my vantage point!

Regardless of what they do, the Clarkson trade has given the Leafs more flexibility. Without the Clarkson trade, the Leafs would be at $78,409,699 after the signing the UFA contracts that they did today. If you had added Horton’s LTIR relief to that value, the Leafs would have had a new cap limit of $83,709,699. If you consider the fact that the Leafs would still have been at 24 active roster players, they still would have needed to remove 2 players to add Marner. Assuming those players had a minimum cap hit of $700,000, the Leafs would have only had $6.7 million to use on Marner as of opening night.

That wouldn’t get Marner signed. Adding Clarkson and his $5.25 million cap hit and that potential amount of LTIR relief is massive in the context of a Marner contract.

Given what we know about the LTIR situation now, I can’t see Marner getting more than a $10.55 million AAV. The math just won’t allow it.

Let’s pretend that the Leafs will trade Nylander without getting a roster player back. That would free up $6,962,366. That would bring their total cap hit down to $76,697,333. Again, we would need to shed one more player at a minimum of $700,000 to get the active roster to 23 including Marner. The new total cap hit would be $75,997,333 in that case. Now we add the $10.55 million to that from Clarkson and Horton, and we get a new cap of $86,547,333.

Notice how that number isn’t $92.05 million ($81.5 million cap + $10.55 LTIR relief).
With the Leafs having to place $10.55 million on LTIR this season, that is the maximum value that Marner’s contract can be. Even if you trade the most expensive players, that only changes the starting point at which LTIR relief is calculated from. Regardless of what happens, the Leafs will only have $10.55 million to spend on Marner this season.

That is why I think Marner will get signed on the opening day of the season. As we saw with Nylander last season, if the player were to sign after the seasons starts, then his AAV in year 1 of the contract will be inflated. The Leafs aren’t going to be able to afford a Marner contract with an inflated AAV this coming season. Using LTIR this summer to sign Marner earlier doesn’t help the Leafs at all here. The only real play for them is to put Clarkson and Horton on LTIR on day 1 and sign Marner immediately after.

I’ll say once again that I’ve been wrong before and I don’t know everything about the salary cap, but that is my understanding of the information that is available on CapFriendly.

Once again, I’m an Oilers fan and this is an Oilers blog. I can’t do this piece without sharing a thought on the Oilers.

Clearing Clarkson’s $5.25 million from Vegas’s books and adding Sparks has them sitting at $80,474,999 according to CapFriendly. They are under the cap ($1,025,001), but they are also only sitting at 22 roster players.

They also haven’t done anything with RFA Nikita Gusev yet. The Clarkson trade leaves Vegas without anyone to place on LTIR next season, so the likelihood of Gusev signing in Vegas just came crashing down to somewhere near 0.

The Oilers only have $2,433,001 in cap space according to CapFriendly at the moment, but the Oilers would likely need to give up a roster player to get Gusev from Vegas. The Oilers can also bury Manning and/or Brodziak in Bakersfield. If Tippett feels that Neal should play RW, then an RW could be on his way out as well.

Who would go the other way to Vegas?

The obvious candidate would be Puljujarvi; but he isn’t signed, and Vegas might not be able to squeeze him in under the cap.

Vegas would likely need a roster player to make this trade work. Since they have the bigger cap crunch and the Oilers would be getting the best player in the trade, I could see the teams flipping bottom 6 roster players with the Oilers taking the worse contract.

I could foresee a trade looking like this:

Oilers get: Gusev and Reaves ($2.775M)
Vegas gets: Puljujarvi and Khaira ($1.2M)

The only way this works is if Vegas can get both Khaira and Puljujarvi under the cap. Vegas would gain $1.575 million in cap space by exchanging Reaves for Khaira, giving them $2,600,001 in cap space. That would be MORE than enough to sign Puljujarvi. Puljujarvi would be stuck on the 4th line behind Stone, one of Smith or Marchessault, and Tuch on the right side in Vegas. That will not please Puljujarvi, but if he’s not going to be given a top 6 role in Edmonton, then he’s not getting a top 6 role anywhere right now. There’s definitely room for Khaira in Vegas’s bottom 6 at LW behind Pacioretty and one of Smith or Marchessault.

From the Oilers’s perspective, this is a lot of money to be taking on. However, Gusev has the potential to be a legitimate star winger in the NHL, which is something the Oilers are lacking. Some people have speculated that the Oilers might be looking to add some toughness to the roster after “losing” Milan Lucic. Reaves would certainly replace that toughness!

Reaves plays RW. The Oilers already have Kassian, Chiasson, Gagner, Archibald, and potentially Neal at RW. Adding Reaves in this trade would give the Oilers up to 6 NHL RW, and it would leave the Oilers with only $858,001 in cap space before signing Gusev.

Burying Manning in Bakersfield would create another $1,075,000, but in my scenario, I’d have Caleb Jones filling that spot on the active roster ($720,000). Burying Brodziak in Bakersfield would create another $1,075,000, but they would need a 4C to replace him, which in my view would be Gaetan Haas ($925,000). After those moves, the Oilers would have $1,363,001 in cap space. They would still need to move one RW out, and said RW would need to have a value of at least $2,636,999 in order to get Gusev signed at $4 million.

The two options would be flipping Reaves to another team, or trading Sam Gagner.

Gagner’s trade value certainly isn’t going to be all that high considering that he spent most of last season in the AHL and that he was traded for someone that just signed in the Swiss league, but he got 13 points in 32 NHL games last season. He’s still a useful player! Holland could trade him to a team like Ottawa that has a lot of cap space and that could use a veteran winger that showed that he can still produce (although it was in a limited sample size last season). That move would likely cost the Oilers a pick or a decent prospect; but the potential of being able to land Gusev makes this scenario appealing in my eyes.

Here’s how the roster would look after all of that:

Draisaitl ($8.5M) McDavid ($12.5M) Neal ($5.75M)
Gusev ($4M) Nuge ($6M) Chiasson ($2.15M)
Nygard ($925k) Granlund ($1.3M) Kassian ($1.95M)
Gambardella ($700K) Haas ($925k) Archibald ($1M)
Cave ($675k) Reaves ($2.775M)

Klefbom ($4,167,000) Larsson ($4,166,666)
Nurse ($3.2M) Russell ($4M)
Jones ($720k) Benning ($1.9M)
Persson ($1M)

Koskinen ($4.5M)
Smith ($2M)

Total: $74,803,666
Retained Salary: Lucic – $750,000
Buyouts: Pouliot – $1,333,333; Gryba – $300,000; Sekera – $2,500,000
Buried: Manning – $1,175,000; Brodziak – $75,000

Total Cap Hit: $80,936,999
Cap Space: $563,001

Holland wouldn’t have the cap space buffer that he desires, but he could gain that by flipping Reaves to another team, or by moving Kassian.

The likelihood of this trade going down is obviously very low. Vegas probably doesn’t want to trade Gusev within their division, and the Oilers would have to do some maneuvering to make the money work for them. They would also be spending two young assets to get an older player with the POTENTIAL for stardom when such performance from Gusev is not a given. They’d also be stuck with Reaves and his big contract, although it would only be for one season. Regardless, it’s still fun to speculate!

The Clarkson deal was a smart piece of cap management by Dubas. It gives the Leafs the ability to sign Marner without dismantling their roster. From Vegas’s perspective, they saved their owner some money. By removing their player that could go on to LTIR, they basically made it clear to the league that Gusev is available because they can’t afford to sign him. Interesting trade from both sides!

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