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the cost of trading/acquiring buyout candidates

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06-04-2013, 06:47 AM
  #1
Method Man
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the cost of trading/acquiring buyout candidates

We have seen lots of people talking about the compliance buyouts and who are candidates. The problem is that some ownership groups may not want to spend the money to buy them out regardless if there is a cap hit or not, but with the cap dropping some teams do need to rid themselves of some contracts.

Instead of buying a player out some teams might be willing to burn an asset or 2 instead of spending millions on actual dollars to buy a player out in order to trade a contract. In other cases a player could be traded for next to nothing because while still a good player the player is just overpaid.

so 2 questions:

What would you be willing to give up in order to trade your buyout candidate that no one will be willing to trade an asset for?

For example, how much would an Islander fan be willing to trade to rid the Isles of DiPietro's contract?

What would you be willing to accept as compensation for your buyout candidate that is still a decent player?

For example, how much (little) compensation would a Wild fan be willing to trade Dany Heatley for?

I am not talking about trading for a player to buy them out. I am talking about teams with ample cap space acquiring really bad contracts for compensation and/or acquiring poor contracts for pennies on the dollar.

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06-04-2013, 08:27 AM
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little to nothing

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06-04-2013, 08:43 AM
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There is no way of knowing the value of a buyout as this is unprecedented in the salary cap era.

We have seen players dumped with picks, but not for a compliance buyout. In each case, it was to create salary cap room, which is undoubtedly much more valuable to contending teams than money.

I think you need to look at this the other way. Rather than what would you give to take DP off our hands, the question should be how much money is a first round pick worth in a good draft? A second round pick? And that is also going to vary wildly from team to team.

Think about it, if you are the Toronto Maple Leafs, and your team makes a ton of money, how much would you be willing to spend for a first round pick? What if you are the New York Rangers and you not only have nearly unlimited money but also don't have a first round pick this year and the draft is 3 miles from your home arena? What if you are the Devils and have no first round pick next year and the draft is in your home arena?

I think those teams might consider $1.5M per year for the next 16 years a good deal for a first.

Most teams, however, wouldn't even consider it.

Then you consider a player like Heatley, who would only cost $1.667M per year for 2 years. I think a lot of teams would gladly pay that much for a 3rd round pick in a deep draft. For some of the richer teams, maybe even a 4th.

The thing is, if we are talking compliance buyouts, then we are talking solely about money. And NHL teams are wildly imbalanced when it comes to finances. A team like Phoenix probably couldn't buy a first round pick for $1M. A team like the Rangers could toss in $1M to move up a few spots in any round if there was someone they liked.

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06-04-2013, 09:01 AM
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CB Joe
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Why would a team take a player at full price?

If a team was interested in a buyout candidate, why wouldn't they wait until that player is bought out. The team would then get to negotiate a contract with the player on their terms instead of taking over an inflated contract.

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06-04-2013, 09:09 AM
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Quote:
Originally Posted by kasper11 View Post
There is no way of knowing the value of a buyout as this is unprecedented in the salary cap era.

We have seen players dumped with picks, but not for a compliance buyout. In each case, it was to create salary cap room, which is undoubtedly much more valuable to contending teams than money.

I think you need to look at this the other way. Rather than what would you give to take DP off our hands, the question should be how much money is a first round pick worth in a good draft? A second round pick? And that is also going to vary wildly from team to team.

Think about it, if you are the Toronto Maple Leafs, and your team makes a ton of money, how much would you be willing to spend for a first round pick? What if you are the New York Rangers and you not only have nearly unlimited money but also don't have a first round pick this year and the draft is 3 miles from your home arena? What if you are the Devils and have no first round pick next year and the draft is in your home arena?

I think those teams might consider $1.5M per year for the next 16 years a good deal for a first.

Most teams, however, wouldn't even consider it.

Then you consider a player like Heatley, who would only cost $1.667M per year for 2 years. I think a lot of teams would gladly pay that much for a 3rd round pick in a deep draft. For some of the richer teams, maybe even a 4th.

The thing is, if we are talking compliance buyouts, then we are talking solely about money. And NHL teams are wildly imbalanced when it comes to finances. A team like Phoenix probably couldn't buy a first round pick for $1M. A team like the Rangers could toss in $1M to move up a few spots in any round if there was someone they liked.
If I'm not mistaken, the buyout is not structured that way. For a compliance buyout, the full salary is paid. At least that's what I recall from the Gomez buyout. And I believe it is paid up front, but I may be mistaken about that.

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06-04-2013, 09:11 AM
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Originally Posted by Ford Prefect View Post
If I'm not mistaken, the buyout is not structured that way. For a compliance buyout, the full salary is paid. At least that's what I recall from the Gomez buyout.
No for a player over 26 years old its 2/3 of his remaining deal, younger than that its 1/3.

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06-04-2013, 09:35 AM
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Quote:
Originally Posted by CB Joe View Post
Why would a team take a player at full price?

If a team was interested in a buyout candidate, why wouldn't they wait until that player is bought out. The team would then get to negotiate a contract with the player on their terms instead of taking over an inflated contract.
A big reason is if a team waits until a player is bought out they have to compete with up to 28 other teams, if they trade for the poor contract they don't have to bid for his services.

Also it could be a way to get an asset to take a contract. Much like when New Jersey gave San Jose a 1st round pick to dump Malakhov when the cap first came into play. For a rebuilding team that could be a very good thing.

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06-04-2013, 09:42 AM
  #8
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Quote:
Originally Posted by kasper11 View Post
There is no way of knowing the value of a buyout as this is unprecedented in the salary cap era.

We have seen players dumped with picks, but not for a compliance buyout. In each case, it was to create salary cap room, which is undoubtedly much more valuable to contending teams than money.

I think you need to look at this the other way. Rather than what would you give to take DP off our hands, the question should be how much money is a first round pick worth in a good draft? A second round pick? And that is also going to vary wildly from team to team.

Think about it, if you are the Toronto Maple Leafs, and your team makes a ton of money, how much would you be willing to spend for a first round pick? What if you are the New York Rangers and you not only have nearly unlimited money but also don't have a first round pick this year and the draft is 3 miles from your home arena? What if you are the Devils and have no first round pick next year and the draft is in your home arena?

I think those teams might consider $1.5M per year for the next 16 years a good deal for a first.

Most teams, however, wouldn't even consider it.

Then you consider a player like Heatley, who would only cost $1.667M per year for 2 years. I think a lot of teams would gladly pay that much for a 3rd round pick in a deep draft. For some of the richer teams, maybe even a 4th.

The thing is, if we are talking compliance buyouts, then we are talking solely about money. And NHL teams are wildly imbalanced when it comes to finances. A team like Phoenix probably couldn't buy a first round pick for $1M. A team like the Rangers could toss in $1M to move up a few spots in any round if there was someone they liked.
I think you missed my point. I am not suggesting the acquiring team buys the acquired player out, in fact I said it's not about that.

As a Flames fan it has been suggested that due to the shallow UFA pool the Flames may try and acquire some less than desirable contracts in order to gain assets (picks/prospects) or acquire a player that can contribute for cheap.

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06-04-2013, 11:01 AM
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Originally Posted by Abbotsford Heat View Post
I think you missed my point. I am not suggesting the acquiring team buys the acquired player out, in fact I said it's not about that.

As a Flames fan it has been suggested that due to the shallow UFA pool the Flames may try and acquire some less than desirable contracts in order to gain assets (picks/prospects) or acquire a player that can contribute for cheap.
I'm looking for teams that have usually spent to the cap (or have the capability to spend to the cap) that have a lot of cap room to benefit the most from the cap decreasing.

The Flames/Sabres are my two picks as the teams that will benefit the most from the cap decreasing when we look back a few years from now.

I'm looking for them to trade for players with only a year or two remaining on their contracts that are overpaid but still very useful players like Booth, Ballard, Havlat, Heatley which they can then re-trade to a contender as early as next years deadline or the following season to acquire picks/prospects (they could retain cap space for next year on these players if necessary).

Cap space can't be carried forward to future years so it's only good if you use it. Both the Flames and Oilers should be looking for short-term players that can be traded along with guys like Vanek/Miller/Stajan/Cammi that won't be with them 3-5 years from now to help them get extra assts as well as not have them rush their youngsters and potentially hurt their development.

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06-04-2013, 11:22 AM
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Quote:
Originally Posted by kasper11 View Post
There is no way of knowing the value of a buyout as this is unprecedented in the salary cap era.

We have seen players dumped with picks, but not for a compliance buyout. In each case, it was to create salary cap room, which is undoubtedly much more valuable to contending teams than money.

I think you need to look at this the other way. Rather than what would you give to take DP off our hands, the question should be how much money is a first round pick worth in a good draft? A second round pick? And that is also going to vary wildly from team to team.

Think about it, if you are the Toronto Maple Leafs, and your team makes a ton of money, how much would you be willing to spend for a first round pick? What if you are the New York Rangers and you not only have nearly unlimited money but also don't have a first round pick this year and the draft is 3 miles from your home arena? What if you are the Devils and have no first round pick next year and the draft is in your home arena?

I think those teams might consider $1.5M per year for the next 16 years a good deal for a first.

Most teams, however, wouldn't even consider it.

Then you consider a player like Heatley, who would only cost $1.667M per year for 2 years. I think a lot of teams would gladly pay that much for a 3rd round pick in a deep draft. For some of the richer teams, maybe even a 4th.

The thing is, if we are talking compliance buyouts, then we are talking solely about money. And NHL teams are wildly imbalanced when it comes to finances. A team like Phoenix probably couldn't buy a first round pick for $1M. A team like the Rangers could toss in $1M to move up a few spots in any round if there was someone they liked.
Holly... Yr wayyyyyyyyyy off!
There has been a report 2 years ago that leafs were offered a compensation of a 2nd, if they would take on 1.7m contract! Burke agreed, but a deal fell threw.

1.5m for 15 years? Are you from another planet?

Frikin Gretzky got sold for 15m back in a day, I know that 15m in early 90s isn't the same money as it is right now... But u are saying to pay 1.6m for 2 years for a 3rd round pick, that has about 10% chance to make the NHL?

COME BACK FROM MARS

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06-04-2013, 08:36 PM
  #11
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Quote:
Originally Posted by Ricky Bobby View Post
I'm looking for teams that have usually spent to the cap (or have the capability to spend to the cap) that have a lot of cap room to benefit the most from the cap decreasing.

The Flames/Sabres are my two picks as the teams that will benefit the most from the cap decreasing when we look back a few years from now.

I'm looking for them to trade for players with only a year or two remaining on their contracts that are overpaid but still very useful players like Booth, Ballard, Havlat, Heatley which they can then re-trade to a contender as early as next years deadline or the following season to acquire picks/prospects (they could retain cap space for next year on these players if necessary).

Cap space can't be carried forward to future years so it's only good if you use it. Both the Flames and Oilers should be looking for short-term players that can be traded along with guys like Vanek/Miller/Stajan/Cammi that won't be with them 3-5 years from now to help them get extra assts as well as not have them rush their youngsters and potentially hurt their development.
This had been a thought for me as well. But guys like Heatley & Booth are still very useful like you said so they would also make the team better now as well as potentially helping a rebuild if they are shipped off at the deadline. Same could go for UFA signings like Dustin Penner who would be perfect for a 1 year del and then send him to a contender at the deadline.

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06-04-2013, 09:54 PM
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To take a contract like DiPietro would likely cost the islanders a 1st and a quality prospect....because of so much money left.

If its something like Hestley with a year left and a pure cap dump then a prospect or pick.

Similar value to take in Booth or Ballard. I thnk booth and Ballard would be throw ins as part f a larger deal to balance out salary like if Vancouver were to trade for Vanek...buffalo takes back booth and they don't retain salary.

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06-04-2013, 11:38 PM
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I don't think there are many teams out there that want to do three compliance buyouts.

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06-05-2013, 12:53 AM
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Curiously in regards to the compliance buyouts, does the player first need to be waived?

If so, the more exciting thing might be watching what happens to players with high cap hits, but low salaries. (Briere for example)

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06-05-2013, 01:07 AM
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Curiously in regards to the compliance buyouts, does the player first need to be waived?
No--they dont need to clear waivers.

The buyout formula is the same ---if the contract has N years left making a total of D dollars to paid its 2D/3 spread out over 2N years

So owing $30M over 5 years means paying out $20M over 10 years. thus $2M per year.

the only difference in compliance buyouts is that it doesnt go against the cap like tradition buyouts does.

teams only have 2 compliance buyouts. Any ither buyouts go against the cap.

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06-05-2013, 01:08 AM
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Originally Posted by Dazed and Confused View Post
Curiously in regards to the compliance buyouts, does the player first need to be waived?

If so, the more exciting thing might be watching what happens to players with high cap hits, but low salaries. (Briere for example)
If one team receives good value for taking on the contract and when they waive them to buy them out another team is willing to claim that player and use them... then why wouldn't the second team just trade for the player in the first place?

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06-05-2013, 01:22 AM
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No--they dont need to clear waivers.
pretty sure they do need to clear, seems like the same rules as normal. Might be some exemption for NMC as these guys can't be put on waivers. NTCs can be waived though so they have to go through waivers.

At any rate a team would want to waive a player if they can, I mean getting rid of their contract for free is better than a buyout.

Quote:
The buyout formula is the same ---if the contract has N years left making a total of D dollars to paid its 2D/3 spread out over 2N years

So owing $30M over 5 years means paying out $20M over 10 years. thus $2M per year.

the only difference in compliance buyouts is that it doesnt go against the cap like tradition buyouts does.

teams only have 2 compliance buyouts. Any ither buyouts go against the cap.
Many teams with one buyout used would be less inclined to risk a cash for assets type trade as they might need that extra buyout next year.

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06-05-2013, 01:26 AM
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If one team receives good value for taking on the contract and when they waive them to buy them out another team is willing to claim that player and use them... then why wouldn't the second team just trade for the player in the first place?
I think the real question is why wouldn't the team dumping the player pay someone to take him when there's a team out there they could dump him on for for "future considerations"?

GMs keep in touch, I really don't see situation like this happening.

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06-05-2013, 01:58 AM
  #19
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No--they dont need to clear waivers.

The buyout formula is the same ---if the contract has N years left making a total of D dollars to paid its 2D/3 spread out over 2N years

So owing $30M over 5 years means paying out $20M over 10 years. thus $2M per year.

the only difference in compliance buyouts is that it doesnt go against the cap like tradition buyouts does.

teams only have 2 compliance buyouts. Any other buyouts go against the cap.
Yes, they need to clear waivers. Unless it's a player with a NMC, then they get to choose if they are placed on waivers.

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