Time, Space, and Uncertainty: the Value of Futures and Cap Room

Cap space is only worth as much as you do with it. This is about the P.K. Subban trade, but it’s also about a lot of other things that will be increasingly important to the Predators as they explore being a cap-ceiling team, with all the good and the bad that that entails.

The salary cap stagnated this year, leaving NHL GMs up against rising salaries, young stars demanding to get paid, and the siren call of a talented free agent class. With an initial projection over the winter of up to $83.5 million, rapidly revised downward in the week leading up to the draft all the way to $81.5 million, GMs found themselves with very little time to change their plans before the free agency window opened.

Some players, like the San Jose Sharks’ Erik Karlsson, had already signed big extensions—Karlsson’s is an eight-year contract at $11.5M/year, and it’s interesting to wonder whether Doug Wilson would have agreed to (or offered) those terms if he’d had the full cap information. Other big names on expiring contracts, like Artemi Panarin, Sergei Bobrovsky, and Matt Duchene, will now find themselves negotiating with teams that have up to two million dollars less to offer them.

And, in the meantime, cap-strapped teams with young stars to extend, like the Toronto Maple Leafs and Tampa Bay Lightning, are having to do a lot of juggling to create enough space to keep those players, or else risk losing them to offer sheets. It’s true that GMs are wary of extending those, but I think we can all agree that—say—the thought of the Colorado Avalanche with Mitch Marner or Brayden Point is a bad thought for the entire rest of the NHL.

What this means, of course, is that teams with salary cap space to burn and the ability to pay whatever actual monetary demands are included in a contract have the ability to leverage that cap space, as Nashville Predators fans found to our dismay yesterday.

David Poile traded P.K. Subban, an aging star but still the Predators’ best all-around defender, to the New Jersey Devils in exchange for a fringe NHL player, a prospect, two draft picks, and a little over $7.5 million dollars in cap space for the next three years. He’s said that it was a financially-motivated business decision to trade Subban, admits the team is worse right now without him, and turned down offers from three other teams that would have required the Predators to retain salary while, presumably, offering more back in terms of other assets.

Nashville Predators dump P.K. Subban for salary cap space

In short, the cap space was the most important asset to Poile in that trade: it was a salary dump in exchange for no guarantees of any kind.

Roman Josi’s current contract, a sweet seven-year deal at $4M/year against the cap, expires at the end of next season, and the Predators will be able to sign him to an extension—as long as he chooses to stay—on July 1. Because he’s currently with the Predators, they are allowed to talk to him, though not to formally re-sign him yet.

We don’t know what kind of deal he’s looking for, or whether he sees his situation as closer to defenders like Karlsson or Drew Doughty ($11M/year against cap), or to fellow homegrown Preds defenders like Ryan Ellis ($6M/year) or even Shea Weber (a little under $8M/year, though signed at a time that that was a much higher percentage of the cap than it is now), or whether he’d fall somewhere in the middle—like Brent Burns ($8M/year), who like Karlsson and Doughty has won a Norris trophy, but like Ellis and Josi plays on an extremely deep defense corps.

We have no idea whether Josi sees himself as the Predators’ #1 defender or feels that the captaincy should boost his salary—or both!—or whether he views himself as just one part of a whole that he thinks is worth taking a lower salary to keep together. It’s possible that David Poile knows already; it’s also possible that the Predators and Josi’s camp haven’t yet gotten down to the specifics of an extension.

Mikael Granlund and Craig Smith will also be unrestricted free agents after next season, though their contract situations haven’t made as much of a splash in the rumor mill as Josi’s. I suspect a lot depends on the Predators’ forward situation there.

These are a lot of questions, and they’re questions about players who are already on the Predators’ roster, and with whom David Poile has already been able to speak. The other player who’s come up a lot in discussions of the Predators’ cap situation is, of course, Matt Duchene.

Rumor: Predators May Be Interested in Matt Duchene, Could Trade Subban or Turris

Duchene is an interesting case. He’s been linked to the Predators with varying degrees of seriousness since the 2016 NHL All-Star Game in Nashville, where he had fun (shocking) and wore a cowboy hat (as no few of the almost 14 million other tourists to come Nashville that year also did). He enjoys country music, he owns real estate in Nashville, and he’s a goal-scoring, faceoff-winning center who won gold with Canada at the Olympics in 2014—Duchene himself recorded zero points in four games played, but he was still good enough for Hockey Canada to give him a roster spot on a team that good.

Over the last few weeks, rumors from increasingly reliable sources have indicated that Duchene is very interested in signing in Nashville, and David Poile’s comments after trading Subban for cap space come very close to stating that the Predators are very interested in having Duchene. (There’s an outside chance that the pending UFA Poile is eyeing is Panarin instead, but although Panarin is a much stronger player than Duchene there have been no rumors of interest there from either side.)

Rumor/Analysis: Matt Duchene interested in signing in Nashville

The problem, of course, is that it’s only been thirteen hours since the Predators were legally able to speak to Duchene or his agent about whether he is actually interested, and Poile and Ray Shero made their deal to clear up cap room over twenty-four hours ago.

Unless the Predators badly wanted either Arthur Kaliyev, who went 33rd to the Los Angeles Kings, or Shane Pinto (?!), who went 32nd to the Ottawa Senators and their long-suffering fans, it would have been much safer for Poile to wait until today to finalize the trade, taking one or more additional 2020 picks instead of the Devils’ #34—which he ended up trading—yesterday.

2019 NHL Entry Draft: Grades & Trades for the Nashville Predators

If the Preds’ target was still on the board after the Kings had picked, the trade including the Devils’ 2019 second-rounder could have been finalized then. If not, waiting until midnight would have been a much safer bet for the Predators.

In some ways, cap space and futures have a lot in common.

The hope with a future—whether it’s a draft pick, a prospect, or negotiating rights for a pending free agent—is always that that future turns into a useful, contributing NHL player.

Draft picks are a lot like lottery tickets; you might win big, even in the last round (as the Predators did with Pekka Rinne or Patric Hörnqvist)—or you might lose big, even in the first round (as the Predators did with Chet Pickard or Jonathon Blum). It’s better, once you’re out of the first round, to have more picks than higher picks, just because it can be so tricky to be sure that any one pick will work out.

Prospects can be a little easier to be sure of, but there’s still a risk. If a prospect were a sure thing to be a useful, contributing NHL player they wouldn’t be a prospect. There’s always the risk that a player who’s great in the AHL won’t pan out in the NHL, or that a player who dominates the CHL or NCAA will struggle against older competition, or that a brilliant European or Russian player needs the big ice to thrive.

In the same way, with cap space, the hope is that that cap space will be used to gain a useful, contributing NHL player, or else other assets.

Teams like the Carolina Hurricanes and Arizona Coyotes are able to take on dead cap space to help them reach the cap floor, while also stockpiling cheap young players or futures as their price for helping cap-ceiling teams get out of a crunch. Teams like the Lightning and Maple Leafs need cap space to extend their young stars, with whom they’ve already been negotiating and whose terms they already have an idea of.

Clearing cap space to negotiate with an unrestricted free agent, as David Poile did yesterday, is trickier. If the cap space he gained in the Subban trade allows him to sign Panarin or Duchene, then that’s a useful outcome of the deal. But there’s no guarantee that he will.

Dumping Subban, without any attempt to get any assets except that cap space back, puts the Predators on very tricky ground to negotiate with Duchene. They can offer him money; he’ll know that they wanted him badly, and may ask for terms or conditions that Poile isn’t willing to give him, or which will interfere with the Predators’ ability to make other deals down the road. It’s also possible that another team will make Duchene an offer he likes better than whatever the Preds’ best offer is.

Right now, the Predators can’t afford to push back too hard while negotiating with high-quality free agents. David Poile may, or may not, have given up the certainty of an actual high-end NHL forward (there were rumors that Toronto was willing to offer William Nylander, for example, if the Predators were able to retain some of Subban’s salary) in the hopes of getting a different one on acceptable terms. It’s a gamble, and a big one.

Saying that we need to wait until after the UFA frenzy to evaluate the Subban trade doesn’t work, because Poile wasn’t able to wait until after the UFA frenzy to make that trade. What he did was create the space to negotiate with Duchene or Panarin; he didn’t trade Subban for either of them.

If no high-skill forward signs with the Predators this summer, that cap space created at such a high cost to the team will be like a prospect who struggles in the NHL or a draft pick who goes bust. It’s only worth as much as what happens with it.

All salary information courtesy of capfriendly.com.