Examining what is wrong with the Edmonton Oilers

What To Do Moving Forward

My idea here is simple, but it will be almost impossible to execute.

The idea is to keep a good portion of the team intact but you should make the following moves.

Trade Nugent-Hopkins for a scoring winger who can slot in on the right side of McDavid. Can you imagine how good Draisaitl and McDavid could be with another weapon on that line? It was supposed to be Lucic but we’ve already figured out that he isn’t the answer.

Speaking of Lucic, since the Oilers can’t buy him out. The Oilers really need to sit him down and tell him that this kind of play is unacceptable. And if he has another bad season next year, then you can buy him out at two-thirds of his base salary of $4.5M (a far cry from his $18M cap hit) over the next three seasons. Because of this, you would not be saving much on the salary cap. Let’s break down why there would be little savings because it is pretty complicated.

• • Lucic is due to make the leftover of the remaining $4.5M left of his base salary, and as the table below shows is that the base salary is $1M in 2020-2021 and 2022-2023 and $2.5M in 2021-2022. Why is this important to know? Because Lucic’s cap hit is $6M per season.
  • So what that ultimately does is leaves Edmonton forced to pay the difference between the base salary and Lucic’s cap hit. So for example, that $1M base salary in 2020-21 against the cap hit of $6M leaves the Oilers having to cover the difference of $5M. So, therefore, that leaves the Oilers with a $5M cap hit before any other variables in play.
  • As I mentioned earlier, the Oilers are on the hook for paying Lucic 2/3 of his base salary of $4.5M. So not included in the calculation above is what the actual buyout cost is. And we figure this out by taking $4,500,000 and multiplying it by 0.66667 and that leaves us with $3M left. And since this buyout is paid over a length of time that is double the remaining time left on the contract (3-years) that leaves Edmonton six years to pay off that $3M that Lucic is still owed. So the buyout will cost the Oilers $500,000 for the next six years. And we figured that out by dividing $3,000,000 by 6 which is the length of the buyout because if you recall the length of the buyout is double the length that was remaining on the contract.  And after everything is divided that leaves us with $500,000.

I think the best way to explain this is to do the math out below, I know there are some people who swear that math is the worst thing ever. But let’s just try to explain it. Even if you don’t like numbers, the formula is pretty simple and hopefully, by laying it out it makes more sense then how I attempted to explain it in words.

The way the cap hit is figured out is:
 Initial Cap Hit
-Base Salary
+Buyout Amount
=New Cap Hit
So for 2020-2021 and 2022-2023 it would be:
  6,000,000 Cap Hit
-1,000,000 Base Salary
=5,000,000 Total thru 2 Steps
+0,500,000 Buyout Amount
=5,500,000 New Cap Hit
But for 2021-2022 the cap hit would be lower 
because the base salary increases from $1M to $2.5M 
which means that the gap between the cap hit for Lucic and his 
base salary is smaller. 
So it would break down like this:
  6,000,000 Cap Hit
-2,500,000 Base Salary
=3,500,000 Total thru 2 Steps
+0,500,000 Buyout Amount
=4,000,000 New Cap Hit

To figure out the savings on each year of the contract all you would have to do is figure out the difference between the original $6M cap hit and the new cap hits for each season. Therefore in 2020-2021 and 2022-2023 the savings is only $500,000 ($6,000,000 minus 5,500,000) but in 2021-2022 the difference is $2,000,000 ($6,000,000 minus 4,000,000). Therefore if the Oilers bought out Lucic it would not make them that much better off because of how his contract is structured.

I did want to point out while I am thinking of it, and as you might have noticed, the closer the base salary is to the cap hit the less it costs the team in cap space. But with signing bonuses and/or front-loaded contracts things get far more complicated then it used to be.

To illustrate that point, I want you to see a normal structured contract, so I encourage you to look at this Viktor Arvidsson page on CapFriendly. There are no bonuses to speak of and the amount of the contract is the same throughout. This is how I learned the NHL Salary Cap rules but contracts are more complex nowadays. (NOTE: You may notice that the buyout of Arvidsson’s contract is for 1/3 of the base salary amount and not 2/3 like it was for Lucic. The reason that is the case is that he is 26 and under, meanwhile, Lucic is over 26 so his hit is 2/3 of his base salary).

But to get back to Lucic, I would tell him that if he doesn’t start to shape up then we may be forced to buy him out. That would be the Oilers only recourse unless he agrees to get traded, which is certainly possible. But for the Oilers there is no way they get any sort of value for a player who isn’t playing up to his contract, and even worse, not even close to it. Not only is he failing to produce on offense, but he really hasn’t been physical either.

• The Oilers need to draft goaltending depth. Let’s just say Koskinen plays well and lives up to the contract, he is still 30 and only has 3 years left on his contract. So if the Oilers don’t have their goalie of the future in the waiting, this is a great time to grab one. But they seem to have something with Stuart Skinner out in the distance to take over that number one spot, and if they believe in him as much as it seems than maybe they can allocate the high draft picks towards other assets on offense or defense. But I still say the Oilers need to add depth at the very least in net.
• The Oilers have a ton of money invested on their defense. And their defense is not even that good. I would strongly consider moving one or more defensemen for younger less expensive options and rebuilding the back end. The Oilers have a combined cap hit of just shy of $26M on their 8 defensemen but the top 5 defensemen combine for over $20M. The Oilers have the depth on defense right now to shift some of that money around and add depth up front where it is needed. But the question, like always, will they do it? Will they give the likes of Caleb Jones, Ethan Bear, or Evan Bouchard a chance at the NHL next season? They only have two of their defensemen with No Movement Clauses so this is an opportunity for the Oilers to dig out of cap space hell and get something of value.

Conclusion

The one thing I like about the Oilers is that their prospect pool is fairly deep. They can definitely move pieces around to make some cap space. I just question whether management will allow for a full-on youth movement right now. I personally think that they should definitely do this and see what they have. Because let’s be honest, what they have now is not working.

I think the Oilers are a team to watch this offseason, they can go in multiple directions with what they decide to do. And I think that’s worth keeping an eye on if you are an Oilers fan or a rivals fan. Ultimately the Oilers have the assets to make moves happen. Are they willing to deal the assets to make themselves are good as they can be?

I can say one thing for certain, getting rid of Peter Chiarelli was one of the best things that the Oilers could have done for their future. He has issues managing the cap and once again it is proven. He did the same thing in Boston. I have no problem with giving Connor McDavid and Leon Draisaitl a combined $21M out of $79.5M of your Salary Cap hit. They are great players. Where the Oilers went wrong here could be giving Milan Lucic, Ryan Nugent-Hopkins, and Miko Koskinen a combined $16.5M and having them fail to live up to expectation.  That really is where “PC” went wrong.

The future is bright in Edmonton, as long as they can move some money to offset the mistake Chiarelli made to put them in this position, to begin with. And I think that they will. And within a year or two it would not surprise me if the Oilers are back into the thick of things competing once again for the Stanley Cup. But first they need to clean up a couple of spills that Chiarelli left behind and they will be right back in it.