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Insider Only On New CBA: Penguins have cap flexibility moving forward

The new CBA agreed upon early this morning between the NHL and players union will be beneficial to the Penguins from a salary cap standpoint.
The salary cap for this season will be a transition cap of $70 million (pro-rated), followed by a cap of $64.3 million for 2013-2014. The salary cap cannot go below $64.3 million.
The Penguins in good position have around $61 million committed to 12 forwards, 6 defensemen and 2 goaltenders on 1-way contracts for this season and next season have around $52.5 million committed to 7 forwards, 5 defensemen and 2 goaltenders.
Pending free agents at the end of this season are roles players Matt Cooke, Pascal Dupuis, Craig Adams and defenseman Ben Lovejoy.
Free agents at the end of 2013-2014 season include Evgeni Malkin, Kris Letang, Chris Kunitz, Brooks Orpik, Matt Niskanen, Tomas Vokoun, Tanner Glass, Joe Vitale, Deryk Engelland and Brandon Sutter (RFA).
The new CBA calls for each team being allowed two amnesty buyouts that can be used to terminate contracts after this season and next season. The buyouts will not count against a team’s salary cap. This won’t be an option the Penguins explore and they have no buyout candidates. Paul Martin won’t be one.
With only Sidney Crosby, James Neal, Paul Martin and Marc Andre Fleury under contract for 2014-2015, GM Ray Shero has a lot of flexibility over the next couple years on constructing this team long-term.
Before anything, the top priority this coming summer will be resigning Evgeni Malkin who the Penguins can officialy sign to a long-term extension on July 1. Malkin loves playing in Pittsburgh and has all intentions on resigning here, and It’s expected to be an easy negotiation like last summer with Sidney Crosby.
Under the new CBA, teams can resign their own players for up to 8 years, which is beneficial to the Penguins in keeping Malkin’s cap hit reasonable.
If Malkin wants to do a max term contract of 8 years, Malkin’s agent J.P. Barry of CAA Sports will surely look at the structure of Sidney Crosby’s deal that pays Crosby $86.4 million over the first 8 years of his deal.
Crosby’s breakdown in the first 8 years is salaries of $12 million a year from 2013-2014 through 2015-2016, followed by $10.9 million a year in 2016-2017, 2017-2018, and salaries of $10 million in 2018-2019, $9 million in 2019-2020 and $9.6 million in 2020-2021.
The maximum allowed salary per season under the new CBA is expected to be $12.86 million and the salary variance on contracts from year to year can’t vary more than 35 per cent and reports indicate the final year cannot vary more than 50 per cent of the highest year

Also set to cash in is Kris Letang who is a free agent after the 2013-2014 season. Like Malkin the Penguins can officially resign Letang on July 1 and Letang figures to double his current salary of $3.5 million. He is regarded as a core member of the team but is a second priority to Malkin and the Penguins will have a decision to make on him.
With a lot of expiring contracts in the next two years, a deep group of blueline prospects coming up who will also have trade value, the Penguins have a lot of flexibility.
CBA NOTES
*10 Year CBA deal has an opt-out clause after 8 years
*The Hockey Related Revenue is a 50-50 split between players and league
*Upper limit on the salary cap this season is $60 million but teams can spend up to $70.2 million. The cap floor will be $44 million.
*Upper limit on the salary cap for 2013-2014 season is $64.3 million, cap floor will remain $44 million
*7 Year contract term limit for free agents, 8 years for team’s resigning their own players
*The salary variance on contracts from year to year cannot vary more than 35 per cent and the final year cannot vary more than 50 per cent of the highest year.
*The draft lottery process will make all 14 teams fully eligible for the first overall pick through a weighting system.
*Teams can only walk away from a player in salary arbitration if the award is at least $3.5 million.
*Revenue sharing among teams will be $200 million
Notes: The NHL is pushing hard to have the CBA ratified as early as Tuesday night to have a 50 game NHL season in place. Camps could open as early as Wednesday or Thursday but it’s up in the air whether all of the legal work will be finalized in time. It sounds unlikely but the projected start date for a 50 game schedule would be January 15th with team’s playing their division rivals 5 times and playing against each conference rival 3 times each, per Bob McKenzie. If a 48 game schedule is put in place, most likely scenario, there will be an unbalanced schedule and a start date of January 19.

About The Author

William DePaoli

TIOPS Insider

William DePaoli is the President/Founder of Inside Pittsburgh Sports LLC and can be reached at wdepaoli@insidepittsburghsports.com

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