Good News for the Devils: 2011-12 NHL Salary Cap Ceiling Projected at $64 Million

The big news today comes right from TSN: The NHL salary cap is projected to have a ceiling of $64 million for the 2011-12 season.  Here's the relevant bit, proving that you don't need a lot of words to get to the point:

With the National Hockey League Entry Draft less than a week away and the potential for trades escalating this week and next with the free agency period looming, the salary cap will be going up by nearly $5 million next season.

Clubs and agents are being told next year's salary cap will be set at an upper limit of $64 million with a floor of $48 million.

This is excellent news for several teams, including the team we all love, the New Jersey Devils. Teams who were close to the cap ceiling last season and have some important decisions to make in this coming offseason now have some relief.   The increase of $4.6 million in the cap ceiling is breathing room for the teams at the top to offer their RFAs good deals and maybe dip their toes in the unrestricted free agent market.  Only those clubs with owners who can't (or won't) spend $48 million on their roster hate this news. Thankfully for us, Jeff isn't one of those owners.

Over a month ago, I looked at how difficult the Devils' salary cap situation looked when it came to just retaining their restricted free agents.  Now that it appears the salary cap will see a massive increase, let's take another look at the Devils' situation with this new number after the jump.

Caveats

Before continuing, I should emphasize that $64 million is a projection.  The salary cap is not set in stone just yet.  Given the source, I'm comfortable playing with that number now.  However, Tom Gulitti did tweet that the NHLPA still has to sign off on the numbers to make it official and that won't happen until next week.   It could change; though, I'm sure a different number will be communicated to agents and other clubs before that happens given that we're close to free agency as it is.   

Also, Gulitti also tweeted that that there won't be any bonus cushion in 2011-12 since the CBA expires after this coming season.   Any bonuses will be a part of their cap hit. This won't affect the Devils too much, though.  Only one player on the books has a bonus and it's Nick Palmieri at a whopping $240,000.

At $64 Million, A Look at the Devils' Cap Situation for This Summer

As of right now at CapGeek, the Devils have 11 forwards, 5 defensemen, 1 goaltender, and 2 dead cap-hits from buyouts on the books plus $240,000 in bonuses.  This is a total cap hit of $52,417,500.  With a $64 million ceiling, the Devils will have $11,582,000 in cap space to retain restricted free agents, sign other players (e.g. a goaltender), and call up players from Albany.

Back in May, I went over the basic requirements for qualifying restricted free agents and how much that will run the Devils. The Devils have 6 of them on their NHL roster and 4 on their AHL roster.   In the original post, I focused on just the 6 NHL players.  To stay consistent, I'll stick with talking about Vladimir Zharkov, Anssi Salmela, Matt Taormina, Mark Fraser, Matt Corrente, and Zach Parise.  Their combined minimum qualifying offers would be $8,129,500.   With the new salary cap projection, the Devils will have $3,453,000 left over.   While it means the Devils won't be major players in the offseason, that's still plenty of space to have for call ups and smaller signings - like a backup goaltender.

Of course, the Devils aren't going to be able to sign all 6 players at their minimum qualifying offer. Zach Parise is not taking a $5 million salary unless he's incredibly more generous than most would expect.   The other RFAs might even want a bump in pay too.  It won't look like too much, I'd be surprised if any of them carry seven-figure cap hits after this summer; but it does add up towards a salary cap, and the Devils can't get too freewheeling with their cap space.  Fortunately, with their RFAs, the Devils have enough forwards and defensemen as-is and only need to sign a back-up goaltender (minimum salary: $525,000) to have a full roster.  They don't have to dip into the UFA market to get bodies for 2011-12.

The biggest factor is Parise. How much is budgeted for him will factor into the other decisions Lou has to make in the near future.   If Parise's signed to a Kovalchuk-esque cap hit ($6.7 million), then that's $4,882,500 for everyone else.  If it's more than that, such as $7.6 million, then there's only $3,982,500 for everyone else, which must include signing a back-up goaltender.   While Lou and Parise's agents have time to negotiate a deal without the risk of an offer sheet, the Devils are limited in how much they can sign him for and Parise's people either know that or will figure that out when other players get qualified and/or signed.  Therefore, the Devils really don't have a lot of space because a majority of it will go to Parise - and it should since he's one of the team's top players.

Since the original post, I've come around to the notion that the Devils aren't likely going to retain all of their RFAs.  Parise is a must, and I anticipate Zharkov stays as a useful fourth liner; both would mean 13 forwards for New Jersey.  The issue's at the blueline.  Even if they had boatloads of cap space, there's no need to have 4 depth defensemen on the roster with 5 signed defensemen. Especially if you look at the near future which will include Alexander Urbom, Eric Gelinas, Brandon Burlon, and Joe Sova in the minors.  I anticipate that some of them will just be cut loose in this offseason, which means more roster spots and some cap savings.

Basically, it's great for the Devils if the salary cap ceiling will be $64 million.  But when I say it's breathing room, it's just that.  Most of this $11.582 million in cap space will go to Zach Parise and the other RFAs.  While they nearly have a full roster as-is, the Devils will still have to go cheap elsewhere (as they should for a backup goalie), and cut ties with a few players anyway.  While they'll have more space overall, I'm still hesitant on whether the Devils can re-sign Andy Greene and make all of these other internal moves.  I'm sympathetic to what user dr(d)evil wrote in this FanPost, but I don't think they're going to be in the race to sign Ian White (who isn't taking anything less than $3 million on the open market) or other "name" UFA defensemen this summer. 

Since the draft is coming up, please recall that the average fourth overall pick is about a $2.3 million cap hit.  Sure, the Devils can now try to squeeze whoever they select into the NHL with a higher cap ceiling; but it's going to make fitting everyone else into the roster while staying under the cap more difficult.  It's still in New Jersey's best interest to keep their top draft pick out of the league for at least a season for cap reasons, roster reasons (where would you play the guy?), long-term reasons (why burn 2 years of the ELC now?), and developmental reasons (whoever is picked is still an 18-year old kid, let them grow at their own pace before throwing them into the NHL).

It would still be in New Jersey's interest to make more space available if they can; they'll pretty much have to if they want to get someone from this summer's Free Agent Frenzy or maybe to just keep Greene on top of their RFAs.  I still have a hunch they'll make a move or two just to clear up some cap space.   That's how I see the Devils situation cap-wise.  There's relief with a $64 million cap, but let's not get crazy and think the Devils have a lot of space available.  Tough decisions will still need to be made by Lou this summer.

How do you see the Devils' cap situation given the possibility of a $64 million ceiling?  Do you think the Devils need to make space or do you prefer for them to just deal with what they have until 2012?  What do you think they'll do this summer in general? Please leave your answers and other thoughts on the potentially higher salary cap in the comments. Thanks to Skuba7 and CameronM89 for FanShotting the news this morning, dr(d)evil for writing a FanPost about it, and you for reading this post.