Salary cap math: Laying out scenarios on how the Penguins clear (at least) $331,000 in the next week

As of now the Pittsburgh Penguins are staring down a financial problem that will require solving within a week when the NHL salary cap begins. The upper limit this year is $81,500,000.

With a full 23-man roster, the Pens’ problem is the salary of all those players is $81,699,125 million AND they owe a $132,500 bonus overage from last year due to Jake Guentzel hitting his entry level numbers. That adds up to $81.831m, or $331,625 over the upper limit.

Beyond just barely scraping under the limit, teams really need to clear it by a bit in the event of injury call-ups or to allow flexibility to build throughout the year to make trade deadline additions. This year that will not be the case for the Pens (barring some sweeping move), any trade for Pittsburgh this season will certainly have to be dollar-for-dollar or better.

Here’s the current team, courtesy of CapFriendly

So how to get under the cap by next week?

Scenario 1: Go with seven defensemen

This is what we wrote about in late-August in an article titled: A look at how the Penguins can re-sign Marcus Pettersson WITHOUT making a trade

The Pens in this instance would simply be demoting Juuso Riikola and his $850,000 cap hit to Wilkes-Barre, as well as other expected cuts like to Zach Trotman, Oula Palve and Adam Johnson. Doing all that creates the $1.3925m worth of space and provides one extra forward and defender to round out the team. Instead of Riikola, they could conceivably cut Ruhwedel and save his salary against the cap ($700,000) too and have about $1.1m in space.

Going with seven healthy defensemen is an NHL standard practice, so either way it makes a bit of sense that one of Riikola/Ruhwdel at this point probably doesn’t need to be in Pittsburgh taking away cap space as a reserve-reserve player who won’t be playing games.

So, technically from the GM’s quote above, this is how Rutherford is making a factual statement that the Penguins don’t HAVE to make any trades before the start of the season. Simply waive a superfluous depth defender and the team gains a bit of space needed to sign Pettersson. That would be a very tight squeeze and put them in a huge bind when it comes to future injury call-ups and absolutely cripple their options for in-season trade possibilities, but it is a very feasible and realistic option on the table.

Everything still holds perfectly here, especially since the Pens used their leverage to only offer Pettersson his qualifying offer for 2019-20. (Though Rutherford has basically said without saying that Pittsburgh will be signing the young defenseman to a lucrative long-term deal soon. That is eligible to happen anytime after January 1st and wouldn’t be shocking to see an extension announced soon-after for Pettersson being a good soldier.)

Anyways, say Pittsburgh goes with seven defensemen and deem Chad Ruhwedel the odd man out to keep Riikola and let him push for playing time. The Pens would be cap compliant, barely, staying $368,375 under the upper limit.

Scenario 1.b Bury Jack Johnson

This is more fan service to answer the questions: could the Penguins waive Jack Johnson? And how would that affect the cap? The Pens have shown no indication that they actually would be willing to waive a $3.25m veteran but it’s also becoming beyond crystal clear that Johnson is only going to hurt the team while he’s on the ice. There’s also some precedent for cutting bad defensemen around the league, with the New York Rangers burying Brendan Smith last year, and the Montreal Canadiens demoting Karl Alzner, so it would not be uncharted territory if Pittsburgh was willing to enter it.

Due to the “Wade Redden rule” teams that bury expensive players in the minor leagues only receive a small bit of salary cap relief. The whole rule is here if you want to get into the weeds with the legalese, but to sum it up succinctly:

The cap hit relief is therefore equal to the minimum salary of the respective season + $375,000

This year’s minimum salary is $700,000 + $375,000 = $1,075,000 of relief. Johnson’s salary cap hit is regrettably $3,250,000 so he would still count $2,175,000 against Pittsburgh’s cap if he was waived, went unclaimed and was assigned to the minor leagues.

Again, no reason to think the team is actually at the end of their rope with this player just quite yet, but obviously a lot of fans want to see how it breaks out. So if the Pens wanted to keep seven defensemen and keep Riikola AND Ruhwedel on the roster, they would scoot under the upper limit with $743,375 of space and Johnson in the minors.

(Note: this would be a very inefficient use of money, considering Johnson in the AHL costs $2.175m against the cap, buying him out this past summer would have only resulted in a $270k cap penalty in 2019-20, but alas that has closed. But that just further goes to show the unlikelihood of this scenario playing out, there were better options to remove him from the roster that went unexplored.)

Scenario 2: Keep Jarry, waive DeSmith

Tristan Jarry has had a pretty solid camp so far, and his salary at $675,000 is actually under the minimum (so I believe, by default it automatically gets raised to $700k if he’s in the NHL). Keeping the cheaper goalie also makes the Pens cap compliant:

The Pens could keep their eight defensemen by holding onto Jarry and jettisoning DeSmith, but would be oh-so-close to the cap with just $43,375 of space if they do need to consider Jarry at the new league-minimum of $700k. This seems like an almost untenable position to be in for the long-run then, as there’s absolutely no room for injury replacements.

They also, of course, could be well clear of the cap if they kept Jarry and went with seven defensemen, which also could be an option.

Scenario 3: A trade to clear space

It definitely feels like sooner or later a trade will be made to make some cap space. Beyond the fact that for next season Pittsburgh needs to clear some room, for THIS season they need to clear some room.

The names of Bryan Rust and Nick Bjugstad have been bandied about. Zach Aston-Reese also seems like he’s at a somewhat of a cross-roads of how the organization views him. Johnson would be an ideal trade candidate, aside from the fact that interest or ability to move him is certainly extremely limited.

In a tight trading market who knows what magic Rutherford can work, but he’s definitely navigated the salary cap well through trades in the past, so while it’s tough to predict what direction he is going to go, it seems an easy prediction to make that at some point he’s going to be mixing things up a bit this year. Just as last year Rutherford traded several players in the opening night lineup (Hagelin, Oleksiak, Sprong, Sheahan, Brassard), this year probably won’t be the same volume-wise, but surely changes will be coming from somewhere at some point.