Canadiens Could Use Buyouts To Create Cap Space

With the NHL Buyout Period about to begin, the Canadiens could use it to help create cap space.

Every year, just before the draft, the NHL has a 15 or so day period known as the Buyout Period. This is the only time of year where teams are able to buyout contracts of players they deem no longer valuable.

Cap Friendly does a fantastic job of running down the rules regarding buyouts. Essentially, a player who is 26 or older would receive two-thirds of their remaining contract over twice the length. The rules vary slightly for those under 26 as they receive one-third of the remaining dollar amount.

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General Fanager also breaks down the buyout rules and have additional information on exceptions. They also have a buyout calculator where it breaks down how a buyout looks on any player.

As an example, I ran what a buyout would look like for P.K. Subban. Subban has 6 years and $42 million left on his contract and his annual cap hit is $9 million. Buying Subban out right now would cost $2.33 million per year for 12 years. However, the cap hit for the buyout would be as follows:

2016-17 and 2017-18: $2,333,333

2018-19 and 2019-20: $1,333,333

2020-21 and 2021-22: $9,333,333

2022-23 through 2027-28: $2,333,333

The Canadiens would save a ton for the first 4 years then have a huge penalty for two years. That is followed by 6 years of dead money on the cap. Obviously the Canadiens wouldn’t buyout Subban but it perfectly illustrates the pros and cons of a buyout.

We now come back to the realm of reality. We are less than 24 hours from the 2016 buyout period and the Canadiens could utilize the buyout period to add some extra cap space this off-season.

Marc Bergevin has utilized the buyout in the past. Most recently, he bought out P.A. Parenteau in late June 2015. Parenteau had 1 year at $4 million left on his deal. The Canadiens saved $2.67 million last year but now carry $1.33 million in dead money this coming season.

2016 Canadiens Buyout Candidates

David Desharnais – 1 year @ $3.5 million remaining

Desharnais is a popular whipping boy among the Canadiens fan base. Justified or not, he did have a terrible season last year. In fact, Desharnais’ 2016 season almost mirrored P.A. Parenteau’s 2015 season. And just like Parenteau a year ago, Desharnais could find himself bought out if Bergevin is unable to find a trade partner for him.

A buyout of Desharnais’ contract would result in a cap hit of $1.17 over the next two seasons. That’s a relatively small sum could easily be justified to help create cap space to help land a potential impact free agent.

Alexei Emelin – 2 years @ $4.1 million per year remaining

I have been and am fairly critical of Emelin. Saying that, he has value in this league and I’m not quite understanding the thought behind buying him out. He rebounded well in 2016 and seems to have his knee injury firmly in the past. Yes, he has a no movement clause but it turns into a limited no trade on July 1st.

However, just for fun, here is what an Emelin buyout would look like. The cap hit would be $1.33 million in year one, $1.13 million in year two and $1.43 million in years three and four.

Next: Canadiens Free Agent Options: Dale Weise

Final Thoughts

A buyout can be a very useful tactic in today’s NHL if used properly.

As I mentioned with Desharnais, you can easily justify his buyout with such a small penalty. Working in Desharnais’ favor, however, is the fact he is one of Therrien’s favorite players.

Emelin on the other hand I believe would be a foolish buyout. He has value and I think he could be a tradeable asset if you deem him expendable. Especially in light of the Erik Gudbranson trade.

Ultimately, I don’t think Bergevin will utilize buyouts this year. I think he’ll attempt to create cap space via trade with the hopes of recouping some value, specifically in Desharnais’ case.