Let's Discuss the Post-July 1st Salary Cap Situation for the New Jersey Devils

Yesterday opened up unrestricted free agency in the NHL, and the New Jersey Devils kept somewhat quiet with only two signings. They re-signed defenseman Andy Greene to a 4 year, $12 million contract and they re-signed goaltender Johan Hedberg to a 1 year, $1.25 million contract.  Regardless what you may feel about either of those signings, they're now on New Jersey's cap for better or worse.   As of right now, that may be the extent of their forays into unrestricted free agency, because of their salary cap situation and roster space.

According to Cap Geek, the Devils now have $7,872,500 of cap space.  This may seem like plenty of space, except for the reality that the Devils have Zach Parise and their other restricted free agents left to re-sign. Most of this remaining space will be taken up by those players.  Zach Parise won't be re-signed cheaply, and while the other restricted free agents will get cheap deals, they can add up.     After the jump, I'll show how much it's could cost to re-sign the other RFAs assuming it's at the price of their qualifying offers and how the Devils' salary cap situation really looks with that in mind.   I will say that it's definitely going to draw Lou's hand to making a trade or two, something he's already alluded to the press yesterday.

The Non-Zach Parise RFAs

Most Devils fans are interested to find out when Zach Parise will be re-signed and for how much.  I can understand that, as he's the team's top forward and will have a significant impact on their cap.  However, I'm going to work from the other way around. The Devils qualified 9 restricted free agents last Monday and generally when a team qualifies a RFA, they're going to be re-signed in some capacity.  Their collective cap hit will also have to be considered on top of what Parise will get.

I've touched on this before back in May, but it's worth re-doing now due to a couple of changes.  First,  Zach Parise's not on this list because he has been elected to arbitration by the Devils. He did not need to be qualified, and again, I'm more interested in the other players. Second, Anssi Salmela was considered back in May but he isn't now since he wasn't qualified.  Instead, he's now unrestricted free agent. The Devils don't have to sign him at all, if they don't want to. Third, while he was qualified, Alexander Vasyunov has signed a one year deal with Lokomotiv Yaroslavl of the KHL as confirmed last Monday by Tom Gulitti.  Since only an offer is needed to keep his rights, I'm going to assume the Devils will not have to sign him to a contract - and so he won't.  Therefore, Vasyunov isn't on the following list, knocking it down to eight players.

Assuming the following players sign a contract worth their minimum qualifying offer, this is how much the Devils will have to pay out to keep all eight remaining RFAs.

This is a total of $4,823,500 - not an insignificant amount of money.  Fortunately, all of that definitely won't be on New Jersey's salary cap.    Most of these contracts will have to be two-way deals and most of these players will be in the AHL with Albany in 2011-12 - where they won't affect New Jersey's cap. 

Speculating on Future Cap Space Available

The following will include a lot of assumptions, so be forewarned.  First: Let's assume the Devils don't sign any more unrestricted free agents.  This may be true, since the Devils really don't need to do so after Greene and Hedberg.  Second, let's also assume Adam Larsson and any other non-professional prospects are signed by New Jersey.  Larsson could command quite a bit of coin based on what other #4 overall picks have received in the past, and that would throw a wrench into New Jersey's plans for 2011-12, anyway.

Since the Devils are set at goaltender with Martin Brodeur and the retained Hedberg, Jeff Frazee will be in Albany for another season.  The Devils only have 11 forwards on the books, and if we assume Parise will be retained, then we can assume they'll have 12 forwards by the start of the season. I can see the Devils having a spare forward, and if so, they'll go with Vladimir Zharkov over Nathan Perkovich or career minor-leaguer Steven Zalewski.   Lastly, with the re-signing of Andy Greene (and assuming Jay Leach is Albany bound), the Devils have 6 defensemen already. They'll have an open regular spot Bryce Salvador can not return (more on that later).  For the purposes of depth (and assuming they only keep 13 forwards on the roster), New Jersey can pick two of Matt Taormina, Maxim Noreau, Mark Fraser, and Matthew Corrente, and leave it at that.  Of course, I'm assuming these players alone will get roster spots - if someone else from the system comes up and gets a spot, then their cap

My point is that, at most, 3 of these 8 players will be on New Jersey's cap.   If we assume those three will carry the highest qualifying offers - Zharkov, Corrente, and Noreau - then the actual cap space New Jersey needs to retain is $1,991,000 from these other RFAs. Adjust accordingly based on who stays with the big club.  I don't think the Devils will go with a full 23 man roster from opening night onward; though I can see them keeping a spare forward and defenseman early on - knocking it down to a potential maximum of $1,331,000 (again, assuming it's Zharkov and one of Corrente or Noreau).

Continuing the thought experiment, going with 3 of these RFAs on the roster would leave $5,881,500 in cap space for Zach Parise.  I don't know a thing about the current negotiations between New Jersey and Parise.  Given that Patrik Elias has a cap hit of $6 million and Ilya Kovalchuk has a $6.67 million cap hit; I'm very doubtful the Devils can keep Parise for a lower cap hit of either player.

Reconsidering Assumptions, Or How the Devils Can Create More Space Without A Trade

The above is with several assumptions at play.  The Devils do have some options to create more breathing room under the salary cap ceiling.    The first is to do nothing. During the summer, teams are allowed to go over the salary cap by 10%.  So the Devils effectively have another $6.43 million to play around with.  I do not recommend this option at all, however, because all it does is put off an incredibly difficult decision.  While any team can go over the cap now, everyone has to be below the salary cap ceiling in mid-September.   Teams that go over the limit have to dump salary some way and will have no leverage in any last-minute deals to get compliant with the cap.  The Devils were in this spot in 2006 and effectively dumped Vladimir Malakhov and their first round pick just to get under. I don't have to see a repeat of that, and I hope the Devils' management will try to avoid it again.

The second is to only go over the cap by $2.9 million at most.  This number is not something I just threw out there.  It's Bryce Salvador's cap hit. Salvador's health remains as a question mark.  He didn't play at all last season, and it's questionable whether he'll play this season.  If he's not medically cleared to play, the Devils can put him on long term injured reserve. That will allow the Devils to go over the cap by $2.9 million and remain compliant.   This is a risky proposition, as it's reliant on Salvador's health.   I don't know the man, but I don't think he won't do everything possible to try and play in 2011-12.

The third is to throw out our assumption about keeping players up for depth. Keeping only Zharkov - the most expensive qualifying offer - in New Jersey will mean there's $7,201,500. That may be enough to retain Parise, but it will likely put the Devils right up against the cap ceiling for the season.  As injuries and other issues happen (e.g. Devils needing to meet another need), this becomes a problem.

Let's go to the other limit and have none of these 8 other RFAs up on the New Jersey roster. These players will only count on New Jersey's cap if they're in New Jersey and all of them have spent time in Albany.  They can all just be signed, sent down to the AHL, and that would leave all of this remaining cap space ($7,872,500) for Parise.  If Salvador can come back play D next season, then the Devils have a full roster.  At forward, this is not a big deal.  Zharkov could take Vasyunov's spot on the roster, even though I think he'd be better suited in the NHL.  However, this creates a nightmare of a roster problem for Albany's blueline.  Albany already has 6 defensemen on their books, adding another 4 on top of Jay Leach is way too many defenders for one team.  

On top of all of that, you have to figure that some of these players may not want two-way deals.  They want the security of a one-way deal; increasing the actual salary they'll receive regardless of where they will play.  Throw in waiver issues, which will make recalling some of these players more difficult.  The more I thin about it, this option becomes more complicated it is and less attractive.   What does become more attractive is the trade router.

The Trade Option

This is the best way for New Jersey to make cap space for Parise, the other RFAs, and to do so without being right up at the salary cap ceiling for another season.

I have two perspectives on how the Devils should approach a trade.  I've covered the salary perspective back in May.  Basically, if the Devils can find someone to take Brian Rolston, Dainius Zubrus, or David Clarkson, then this option must be explored. Each takes up a significant portion of the cap and just moving one of them out will create enough space to accomplish the above goal.   With 6 teams still under the salary cap floor by at least $3 million, I would think there would be interested parties in taking a bad contract.  From a roster perspective, some defensemen need to be shipped out of New Jersey.  The Devils absolutely do not need as many professional defensemen on their reserve list as they do.   I think the Devils can kill two birds with one stone. 

In order to make the salary dump work, usually the team doing the dumping has to include a decent asset.  Since the Devils have loads of young defensemen with some potential, the Devils should consider packaging the player with a bad contract with a prospective defender. You may not want to part with Eric Gelinas or Brandon Burlon or Matthew Corrente, but if that's what makes a trade happen, then you have to pull that trigger.  Among all the prospects, the only ones I wouldn't consider trading are Adam Larsson (the #4 pick in 2011 is off the table) and Alexander Urbom (I think he's got a shot make the roster this season, why move him now?).

In return, the Devils should ideally look for picks and prospects in return. These are usually assets that do not add to the team's salary cap right away, which is the whole point of making a trade at this juncture.  Adding to the overall salary cap would defeat the purpose of making a deal with another team.

Conclusion

It wouldn't surprise me if there are some other outs and other means to get cap space, but it's looking like Lou didn't just reference the possibility of a trade just to create rumors.  From my perspective, I would be surprised if none was made this summer. Playing around between $5.8 to $7.8 million is possible to keep the RFAs and re-sign Parise (except at the lower ends), but it doesn't leave a lot of room by the time the season begins. It's to New Jersey's advantage to make some more space.

What do you think the Devils will do in the coming weeks?  Do you think they'll make a trade at all? If so, do you think they'll do it before or after Parise gets re-signed? Who do you want to see traded and to whom?  Please leave your answers and other thoughts on the Devils' cap situation in this offseason in the comments. Thanks for reading.