Exactly When The Golden Knights Have To Clear Salary Cap Space

Disclaimer: There are a few gaps of missing information in this article that could change the overall numbers. We are working to fill as many of those gaps as possible and will update this article with them if/when we learn more. Nonetheless, we stand by the overall premise of the article and do not believe it will change radically with any of the additional information we are seeking.

It’s no secret, the Golden Knights are tight against the salary cap. In order to solve this issue, they are going to have to find a way to shed some salary. Of course, there are multiple ways to do this including trading players, waivers, buyouts, injuries, suspension, and likely more that we aren’t even aware of.

But, no matter which way you break it down, it’s a fact that something is going to have to happen to make sure the Golden Knights are cap compliant when all is said and done heading into the 2019-20 season.

Trying to guess exactly will happen will probably yield results about as accurate as when dogs pick winners by going for the treat on the left or the right. So let’s leave that for another day (plus, if you’ve listened to our podcasts or any of the many radio spots Jason and I have done over the last two months, you’ve probably got an idea of what we think is going to happen.).

Instead, in this article, I’m going to try to fill in another one of the 5 W’s. Instead of “who,” “what,” “where,” or “why,” we shall try to solve the “when” in the salary cap equation.

The league calendar resets on July 1st. Thus, until then, every player on the Golden Knights is still considered to be paid under their 2018-19 salary as it pertains to the salary cap. So, between now and June 30th, the Golden Knights will not be forced to do anything as they are well below the salary cap limit.

(Photo Credit: SinBin.vegas Photographer Brandon Andreasen)

However, on July 1st, the 2019-20 calendar begins, and Mark Stone, Max Pacioretty, Marc-Andre Fleury, Nate Schmidt, and Alex Tuch’s new contracts will all kick in. That’s when the cap number starts to get tight. But exactly how tight is important in relation to when the Golden Knights must make something happen.

By rule, the CBA states that no team may cross the “Upper Limit” (a fancy word for the salary cap) at any time using their “Average Club Salary” (fancy way to say the total amount of money committed to players for the league year).

That “upper limit” number for the Golden Knights during the offseason is approximately $95.6 million. (For a complete breakdown of how I came to that number, see the end of the article.)

The CBA also states that there are eight categories of salary that are all added together to calculate a team’s “Average Club Salary”. Of the eight, the Golden Knights have a sum greater than $0 in four categories.

On July 1st, 2019, the sum of those four categories for Vegas is $90,878,214. (To see the exact breakdown of this sum, including the eight categories, see the end of the article.)

Thus, by rule, the Golden Knights are NOT required to move any player on July 1st in order to become cap compliant. ($95,600,000 – $90,878,214 = $4,721,786)

However, the numbers will change as RFAs are signed. Any dollar amount above what is listed below in section four will be added to the overall cap. So, if William Karlsson signs a contract with an AAV of $6,750,000, a total of $2 million ($6,750,000 – $4,750,000 = $2,000,000) will be added to the overall “Average Club Salary.”

So, that means the Golden Knights have approximately $5 million to work with in signing their RFA’s above what they are currently counted against the cap (see below for those exact numbers).

Karlsson’s contract is likely to jump about two to three million and Gusev’s will likely take up the rest. That’s not even considering signing Schuldt, raises for Nosek or Subban, or the signing of qualifying offers by Bischoff or Hyka.

Meaning, in order to stay under the “upper limit” the Golden Knights are going to have to shed some salary prior to officially putting pen to paper on all of their RFAs. According to the CBA, NHL Central Registry will not approve a player contract that puts a team over the salary cap upper limit. So, even if they wanted to sign Gusev, Karlsson, or any of the other RFAs (or any of the UFAs that have not even been mentioned in this article yet) they must clear room below the $95.56 million “upper limit.”

So what does it all mean in relation to when a trade must go down? Well, that’s still a bit up in the air since technically they are going to be cap compliant on July 1st. However, the Draft sets a deadline of sorts as the only way to acquire and select players in the 2019 Draft is to do it on June 21st and 22nd during the Draft (duh). Otherwise and picks acquired would be for the 2020 Draft.

Aside from that though, in order to do much of anything on July 1st, the Golden Knights will likely have to clear some room. Again, they have just about $5 million to work with, so they technically could sign Deryk Engelland, Ryan Carpenter, Brandon Pirri, and/or Pierre-Edouard Bellemare, but that would leave a minuscule number available to lock down the contracts of the RFAs.

Add it all up, and it’s highly probable that the Golden Knights find some way to shed some salary prior to July 1st with a strong chance of it happening today or tomorrow during the Draft. But, even after all of this, there’s still technically a way for them to go to training camp with everyone on the roster and under contract.

Then the deadline will be October 1st (the day following the last day of training camp), and that one will require them to get down to around $87 million rather than $95 million.

Calculating the $95.56 million “upper limit” number for the Golden Knights.

We start with the “upper limit” as set by the NHL which we now believe will be $82.1 million.

Then we add the offseason “flexibility” exception stated in the CBA.

Nevertheless, in order to ensure that Clubs may have sufficient time and flexibility to plan their rosters during the off-season, the Upper Limit shall be temporarily raised by ten (10) percent to permit Clubs additional flexibility with their Averaged Club Salaries during the period from July 1 until and including the last day of Training Camp. On the day following the last day of Training Camp, the Upper Limit shall again be lowered to the level as calculated in Section 50.5(b), and all Clubs must once again be in compliance with the Upper Limit from the day following the last day of Training Camp until and including June 30. -NHL, CBA

10% of $82.1 million is $90.31 million.

Then we throw in one more caveat and that’s David Clarkson. Clarkson was acquired during the Expansion Draft from Columbus. He suffered a career-ending injury years ago, but because NHL salaries are fully guaranteed, he can’t retire until his contract is over (otherwise he’d be giving up millions of dollars for no reason). His cap hit in 2019-20 is $5.25 million. The CBA does not specify this, but CapFriendly.com believes he can be placed on LTIR upping the Golden Knights limit to around $95 million.

LTIR can be used in the off-season while the 10% off-season cushion is active. -CapFriendly.com

Thus, the limit for the Golden Knights, from July 1 until October 1 is $95.56 million.

Calculating the Golden Knights “Upper Limit”

The CBA states that the “Average Club Salary” is calculated by the sum of the following eight categories. Here is each category one at a time followed by the Golden Knights players with salaries that fall under each and each individual category’s sum.

(1) The Averaged Amount of the Player Salary and Bonuses for that League Year for each Player under a One-Way SPC with the Club; plus

Mark Stone – $9,500,000
Marc-Andre Fleury – $7,000,000
Max Pacioretty – $7,000,000
Paul Stastny – $6,500,000
Nate Schmidt – $5,950,000
David Clarkson – $5,250,000*
Shea Theodore – $5,200,000
Reilly Smith – $5,000,000*
Jonathan Marchessault – $5,000,000
Alex Tuch – $4,750,000
Colin Miller – $3,875,000
Cody Eakin – $3,850,000*
Ryan Reaves – $2,775,000
Erik Haula – $2,750,000
Brayden McNabb – $2,500,000
Nick Holden – $2,200,000
Jon Merrill – $1,375,000
Curtis McKenzie – $750,000
William Carrier – $725,000
Valentin Zykov – $675,000
Sub-Total – $82,625,000
Running Total – $82,625,000
*Salary figure not released by Vegas Golden Knights. May differentiate from actual salary cap hit number.

(2) All Deferred Salary and Deferred Bonuses to be earned in that League Year (in accordance with Section 50.2(a) and Section 50.2(b), respectively); plus

None
Sub-Total – $0
Running Total – $82,625,000

(3) All Ordinary Course Buy-Out Amounts to be paid in that League Year (in accordance with Section 50.9(i)); plus

None
Sub-Total – $0
Running Total – $82,625,000

(4) 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 Section 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) in a 184-day regular season, and receives a Qualifying Offer for $525,000 (NHL) / $50,000 (AHL), the portion of his Qualifying Offer that will count for off-season accounting purposes will be 46/184 x $525,000 = $131,250); plus

Assuming all qualifying offers are extended (calculated using CapFriendly)

William Karlsson – $4,750,000
Tomas Nosek – $1,000,000
Nikita Gusev – $874,125*
Malcolm Subban – $715,000
Jake Bischoff – $190,027**
Tomas Hyka – $163,207***
Jimmy Schuldt – $14,252****
Sub-Total – $7,706,611
Running Total – $90,331,611

*It is possible Gusev’s number is actually $0 as it is unclear if the Reserve List counts as “NHL Roster” or not. If it does not, his number would be $0. If it does, his number is $874,125.
**Bischoff is eligible for a two-way qualifying offer. He spent 40 days on the active roster meaning 21.7% (40/184) of his qualifying offer is counted.
***Hyka is eligible for a two-way qualifying offer. He spent 42 days on the active roster meaning 22.8% (42/184) of his qualifying offer is counted.
****Schuldt is eligible for a two-way qualifying offer. He spent 3 days on the active roster meaning 1.6% (3/184) of his qualifying offer is counted.

(5) For any Player under a Two-Way SPC, the NHL portion of the SPC 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) in a 184-day regular season, and has a Two-Way SPC for $525,000 (NHL) / $50,000 (AHL), the portion of his Two- Way SPC that will count for off-season accounting purposes will be 46/184 x $525,000 = $131,250; plus

Oscar Dansk* – $25,679
Reid Duke** – $20,924
Sub-Total – $46,603
Running Total – $90,378,214

*Dansk is on a two-way contract with an NHL value of $675,000. He spent 7 days on the active roster meaning 3.8% (7/184) of his NHL salary is counted.
**Duke is on a two-way contract with an NHL value of $770,000. He spent 5 days on the active roster meaning 2.7% (5/184) of his NHL salary is counted.

(6) The portion of the Averaged Amount a Club has agreed to retain for the SPC of any Player it has Traded to another Club as part of a Retained Salary Transaction (as described in Section 50.5(e)(iii) below); plus

Tomas Tatar – $500,000
Sub-Total – $500,000
Running Total – $90,878,214

(7) The portion of a Cap Advantage Recapture amount included in that League Year pursuant to Section 50.5(d)(ii)(A)-(B); plus

None
Sub-Total – $0
Running Total – $90,878,214

(8) With respect to any Player Salary or Bonus dispute between a Player and a Club (including but not limited to disputes arising under the Collective Bargaining Agreement expired September 15, 2012), any amount paid (excluding interest) in satisfaction of any award or judgment relating to, or settlement of, any such dispute, but only to the extent that such amounts have not otherwise been included in the Player’s Player Salary or Bonuses.

Sub-Total – $0
Running Total – $90,878,214

Final Total – $90,878,214