Bill Meltzer wrote a post with a few updates yesterday about the Flyer's cap situation that requires some clarification. The article is available here and updated here. His view of the potential cap space has a few mistakes, and also makes some simplifications which make the cap situation look worse than it is. See below the jump for explanations.
Meltzer starts his post by saying that the Flyers have $11,481,267 in cap space under the $70.3M temporary cap, according to the wonderful folks at capgeek. He says the Flyers should attempt to remain under the $70.3M limit, despite there being no good reason for doing so. I will explain later on why that makes no sense. Meltzer concludes that the Flyers have about $1.3M in cap space to spend this offseason after re-signing Matt Carle, Jakub Voracek and RFAs. Meltzer makes some mistakes, such as subtracting available cap space from Pronger's LTIR exemption space, instead of adding the two values together. He also assumes larger amounts than necessary for some RFAs, while neglecting other players who will count against the offseason cap. These miscalculations prevent him from seeing the potential to add impact players for next season. Let's look at how the situation will play out for the Flyers moving forward.
First, we need to look at the sure things. The number Meltzer is starting with includes Chris Pronger's cap hit ($4,921,429), which it must count until Pronger is placed on LTIR. It does not include the cap hits for Matt Walker ($1,700,000) or Oskars Bartulis ($600,000). These are One-Way SPCs signed or traded for by the Flyers, and count during the offseason no matter what [Section 50.5 (d) (i) (A) (1) of the CBA]. Subtract the $2.3M for Walker and Bartulis, and that leaves $9,181,267 in cap space.
Next, we need to look at RFA signings. Jakub Voracek, Harry Zolnierczyk, Andrew Rowe, Michael Testwuide, Marc-Andre Bourdon, Ben Holmstrom and Tom Sestito are all RFAs for the Flyers this offseason. Go to DragonGirl's FAQ, here, on RFAs if you want more info. I think it's been reported that most have been submitted qualifying offers, so we'll go forward with that. It's important to note here that Bourdon is no longer waiver exempt according to CapGeek, and he is currently sitting behind 7 D-men who should be in the NHL ahead of him.
According to Section 50.5 (d) (i) (A) (4) of the CBA, which was posted in today's Fly-By and states:
Any amount offered in that League Year by the Club in a Qualifying Offer or in an Offer Sheet to a
Restricted Free Agent from the date of such offer until the earliest of the following: (A) the
Restricted Free Agent signs an SPC with the Club; (B) the Restricted Free Agent signs an SPC with
another Club; or (C) the Qualifying Offer expires pursuant to Article 10.2 (for purposes of Two-Way
Qualifying Offers, the NHL portion of the Qualifying Offer will be counted at a rate reflective
of the Player's time on an NHL Roster (including days on Injured Reserve, Injured Non Roster and
Non Roster status) the prior League Year so that, for example, a Player who spent forty-six (46) days
on an NHL Roster (including days on Injured Reserve, Injured Non Roster and Non Roster status)202
in a 184-day regular season, and receives a Qualifying Offer for $500,000 (NHL) / $50,000
(AHL), the portion of his Qualifying Offer that will count for off-season accounting purposes will be
46/184 x $500,000 = $125,000); plus
Essentially, I interpret this to mean that the full cap hit that these players re-sign to will not count against the cap. Instead, we are looking at a percentage of their cap hits that must be counted prior to the end of training camp.
So lets look at the players one by one, using Meltzer's numbers:
Voracek - $3M - 185 days - $3M against the cap
Zolnierczyk - N/A (Qualified at $719,250) - 100 days - $388,784 against the cap
Rowe and Testwuide - 0 days - $0 against the cap
Bourdon - $975,000 - 101 days - $532,297 against the cap
Holmstrom - N/A (Qualified at $605,000) - 13 days - $42,513 against the cap
Sestito - $650,000 - 82 days - $288,108 against the cap
In total, this gives us $4,251,702 to add to our cap. I've included Voracek, because he is a must sign and I don't want to be thinking about situations where he isn't signed. The other players are on the bubble of making the team and not making the team. Their salaries may count during the offseason, but they may be demoted by the end of training camp. Before making any further calculations we also have to add in players who are not RFAs, but who count against the cap in one form or another:
From Section 50.5 (d) (i) (A) (5) of the CBA, the same formula applies for players on Two-way contracts as in Section 50.5 (d) (i) (A) (4). This applies to Erik Gustafsson, Brandon Manning, Eric Wellwood, Zac Rinaldo, and Brayden Schenn. It applies to Matt Read and Sean Couturier as well, but since they spend the entire season on the NHL roster, they can be ignored for the purposes of this investigation.
Gustafsson - $900,000 - 124 days - $603,243 against the cap
Manning - $900,000 - 8 days - $38,919 against the cap
Wellwood - $580,000 - 53 days - $166,162 against the cap
Rinaldo - $544,444 - 177 days - $520,900 against the cap
Schenn - $3,110,000 - 165 days - $2,773,784 against the cap
In total, this adds $642,162 (for Gustafsson and Manning), while subtracting ($773,598) for the difference in pro-rated salaries of Wellwood, Rinaldo and Schenn. The net loss is $131,436 against the cap.
From here we can look at the original cap space number ($9,181,267) and subtract from that the $4,251,702 for RFAs while adding the $131,436 for space allowed by pro-rating the salaries of signed players. This brings us to $5,061,001 in space below the current cap. This number is the final number before any UFA signings are made and does not include the 10% offseason exemption ($7,030,000). In total, this gives the Flyers the ability to spend $12,091,001 on UFAs this offseason. It should be noted, however, that if Bourdon, Rinaldo, Wellwood, and Schenn are on the team next season, then they will count at the full amount. In Schenn's case, he could be added later to ensure that he will not meet certain bonuses. Since it's unclear how exactly those bonuses operate, we can leave that space for future emergency callups or bank it towards the trade deadline. Re-calibrating the numbers, we have to subtract $773,598 from the free space number, since Schenn, Rinaldo, and Wellwood are expected to be in the 2012-2013 lineup, which gives us a final available space of $11,317,403 to spend on a goalie, D-man and UFA winger.
Now on to why Meltzer is wrong about not using the 10% overage. Before the end of training camp, the Flyers must be cap compliant and shed the 10% overage. It's my contention that this amount can be shed by using the players above who are not expected to make the lineup and maneuvering salaries until Pronger is placed on LTIR. Starting with $7,030,000 we subtract $2.3M for Walker and Bartulis giving us $4,730,000 left in space to clear. This is enough space to clear with Pronger's LTIR exemption, but that can't be done until day one of the season. Gustafsson and Manning will not start the season in the NHL, unless other salary is cleared away in a trade or demotion, which brings us to $4,087,838. The same applies for Bourdon, who is currently 8th behind Timonen, Coburn, Grossmann, Lilja, Schenn, Meszaros and UFA D-man signing, bringing the total down to $3,555,541. We can also subtract Holmstrom and Sestito, bringing the total to $3,224,920. To make up this gap, Schenn and Couturier will need to be sent down until Pronger is placed on LTIR. Schenn and Zolnierczyk is not enough space if the Flyers spend to the absolute limit. If they spend to less than ($3,224,920 - $2,773,784 - $388,784) = $62,352 of the $11,317,403 limit, then they can keep Couturier on the opening day roster.
All of that is to say that if I go to CapGeek's cap calculator, and click the little 'x' on Pronger's name, and then sign Voracek for $3,000,000. I don't have $13,403,056 to spend. The number is a lot closer to $11M with the offseason cap and salary maneuvering. It's certainly not as bleak as Meltzer makes it out to be.
Any comments, capgeek rosters, suggestions, etc. would be appreciated.