The NHL buyout window opened on Friday morning and the New York Rangers may take advantage of an extraordinary option that’d help matters.
The New York Rangers have the opportunity to offer a buyout to a player should they feel it is necessary to free up salary cap space on the team. It’s a common word used via “recent Rangers” (due to the idea multiple players qualify as prime candidates).
First, though, the details must be addressed.
The buyout option is not a case of offering a player an amount of money to rid them of the contract. It’s much more complicated than that—the team will have to double a player’s remaining contract in order to complete the process.
Capfriendly.com has come up with a calculator that breaks down a current player’s contract which includes the length of the buyout and how much a team will have to pay the player, even when he is no longer part of the organization. In the case of the Rangers, we will look at the buyout contract of assistant captain Marc Staal as he is one of the players the team is considering offering a buyout too.
First, it is necessary to understand how players are eligible for a buyout.
Teams are permitted to buyout a players contract to obtain a reduced salary cap hit over a period of twice the remaining length of the contract. The buyout amount is a function of the player’s age at the time of the buyout, 1/3 of a players contract if he is 26 years old or younger and 2/3 of a players contract if he is 26 years-old or older. Marc Staal would fall under the 2/3 value of his contract.
Staal has three years remaining on his contract with a salary cap hit of $5,700,000 for each of the three years. Staal would receive a total of $15,200,000 over the final three years of his deal—a substantial amount of money for a player who will be 34-years-old when his contract expires in 2021.
His buyout, should the Rangers decide to go that route, would look like this after six years (remember the contract length doubles if the buyout is initiated):
|SEASON||BASE SALARY||INITIAL CAP HIT||ACTUAL COST||SAVINGS||FINAL CAP HIT|
If the Rangers buyout Staal’s contract, the contract would be extended until the end of the 2023-24 season.
The significant factor here is the change in the salary cap hit each season. With the buyout in play, the cap hit in the 2018-19 season would be $2,055,556 instead of $5,700,00. In the 2019-20 season, the cap hit would be $3,055,556 as opposed to $5,700,00. The 2020-21 season cap hit would be $3,855,556 against $5,700,00. Years 2021-2024 would have a hit of $1,355,56.
The New York Rangers would save $4,066,667 in offering the buyout against his total base salary which includes a $3,000,000 signing bonus.
A lot of money moving around indeed, but the Rangers have other factors to look at too. The first thing is can the team afford to lose a 13-year veteran in a time when the team is rebuilding the team with a lot of young defensemen. Do the Rangers have a suitable replacement in the organization right now to take his spot or do they have a player in mind they want to trade for to take his spot?
The buyout window closes on June 30, so this decision will have to be made prior to the free agency period beginning.
The Rangers bought out defenseman Dan Girardi last June and his buyout cap hit will last until 2022-23. Should the Rangers also buyout Staal, that would be two players the Rangers will be paying for the next six season who are not even on the team anymore—a big factor the Rangers needs to consider.
The organization could also opt to continue with Staal’s contract for this season and address the buyout at the end of the 2018-19 playoff’s next year. One other important note, if the Rangers do not buyout Staal’s contract now, he will be with the New York Rangers all season as he has a full no-move contract.
The buyout has a lot of complexity to it. it does save the team annually with regards to the salary cap hit, but it also adds to the salary cap in the last three years of the buyout agreement.
Veteran vs. salary, a tough decision to be made, even tougher with a team full of young defenseman and tight on money when it comes to improving the lineup.
The New York Rangers have two weeks, just 14 days, to decide how they want to improve this personnel base.