"Stars and Bargains" - The model that solves the Toronto Maple Leafs salary cap struggle

"Stars and Bargains" - The model that solves the Toronto Maple Leafs salary cap struggle

The rebuild was done right. After years of not being good enough to compete, but also not being bad enough to improve, the new brass of Leafs management finally decided that the only way to the top, was to hit rock bottom.

While the prospects of going through a rebuild are never fun, the honesty was refreshing. Leafs fans were told to expect some suffering, but were promised the results would speak for themselves. Prior to the 2015-16 season, the rebuild officially began with the trade of franchise star Phil Kessel. The product on the ice was painful to watch at times, but the bad results (and in one case, fortuitous ping pong balls) provided the opportunity to add Mitch Marner and Auston Matthews to a young core that already included Morgan Rielly, William Nylander, and the product of the Kessel trade, Kasperi Kapanen.

Looking back on Maple Leafs drafting since 2012, they’ve been successful in developing and keeping their selections, with eight selections currently playing regular minutes for the club. The entry-level contract gives franchises a chance to build a solid team around their growing youngsters and the Leafs have been a great example of this, bringing in players like Patrick Marleau, Nikita Zaitsev, Ron Hainsey and Frederik Andersen to complement their young core of players. As seen by back to back playoff appearances, this approach paid early dividends, with the new additions meshing well with the leftover pieces of the rebuild, as well as growth and production from the youngsters that could not have been anticipated so quickly.

The only hiccup with young player success is that once the three-year entry level deal expires, players that have exceeded expectations are due for a hefty pay raise, a nightmare for a team that has built their roster relying on those entry level deals, playing in a league with a hard, no-leeway salary cap. Young player development is always the goal in any rebuild, but when you have to build from rock bottom as the Maple Leafs have, it can leave you with a nice-to-have money problem.

The 2018-19 Maple Leafs season has been incredibly successful thus far, with the team on pace to break their franchise record for points, set last year at 105. However, most Leafs fans will tell you that a lot of the focus has been off the ice, with hockey fans and analysts alike continually asking the same question: “This season has been great, but how are they going to find the cap room to keep the young core beyond this season?”. With Kyle Dubas making signings and trades throughout the season, it’s becoming clearer to see how the Leafs plan on assembling their roster next year and beyond.


With in-season deals for Matthews, Nylander, Trevor Moore and Garret Sparks, the Buds have 16 contracts that should be all but guaranteed to play with the big club next season. The way that Dubas has distributed money around to players all but guarantees Trevor Moore a position on the big club next season. Coming into restricted free agency at the end of this season, there was no chance that Moore was going to get a pay increase from the $925,000 cap hit his rookie deal provided, given he only has 13 games of NHL experience. This being said, he hasn’t looked out of place with the Leafs and will get a chance to prove himself as an NHL player over the next two years at a cap hit of $775,000 per season, likely playing on the fourth line. This is exactly how the Leafs will need to build their roster to stay under the cap. Pay your superstars and young studs, while filling out your roster with entry-level deals or cheap alternatives with upside. The skill difference between your elite players (eg. Matthews and John Tavares) and your average players (eg. Connor Brown) is so much larger than the skill difference found between your average players and an entry-level or RFA-deal minor leaguer (Moore) that the only logical conclusion is to pay your superstars and try to fill out your squad with cheap contracts such as Moore, even if it means having to get rid of your average players (more on that later…).

The Sparks signing for one-year at $750,000 follows the same logic. Having a solid backup goalie is nice to have, but if you get to the point where your backup goalie has to play significant minutes throughout the season due to injury, your season is likely a write-off anyways. Sparks is on pace to play 17 games this season and earn the Leafs 18 points. It makes no sense to sign an expensive backup that would earn you an additional three or four points on the season. A player like John Tavares has earned the Leafs many more than four points this season. Pay your stars and fill the roster with cheap contracts in less essential places.

Nylander and Matthews fall into the “pay your stars” category. While Nylander’s point production hasn’t been there since he returned midseason, he’s been buzzing around the ice and has made increasingly positive contributions as the playoffs get closer. Matthews is a generational talent who has done everything to suggest that he can be a face of not only the Maple Leafs, but also the NHL for years to come. Both players have the skillset to justify the ~$7 million and ~$11.6 million price tags they respectively command.

Adding the new contracts from above that are guaranteed to be on the NHL roster next season to the players who were already under contract for 2019-20 when the 2018-19 season kicked off, we get the following cap situation:

Maple Leafs 2019-2020 salary cap (1).png

The NHL has announced the salary cap for the 2019-20 season will likely be $83 Million, but this number will have to be confirmed sometime in the summer.

In order to build out a roster of 23, the Leafs will likely add four more wingers, a centreman and two more defensemen. The most obvious move will be to sign Mitch Marner, who will take his place on Tavares’s wing on the top line.

Marner has been on a tear so far this year and he’s on pace for 99 points. He definitely qualifies for the superstar category and will be paid accordingly. Playing with an incredible centre such as Tavares has benefited Marner this season, but his ice vision and passing abilities are second to none and make him such a valuable asset moving forward for the team. With this being said, NHL wingers do not get paid as much as centremen. Patrick Kane is the only winger making more than $10 Million a season, and he’s on pace for 118 points at the end of the season. While the increasing salary cap year-over-year has impacted contract size a little bit, the primary negotiating tool has been contracts of similar players and one-upmanship of each other. For this reason, I think it’s difficult to see Marner getting paid more than Kane’s $10.5 million per year, because of Kane’s perennial all-star selections, his Art Ross/Ted Lindsay/Hart Trophy season in 2016, and the incredible season he’s putting up this year (that would probably win him some of the same awards he won in 2016 if it wasn’t for Nikita Kucherov). I still think Marner is going to get paid handsomely, and due to the potential he has shown, the chemistry he’s developed with Tavares and the incredible stats he’s thrown-up in his age 21 season, Marner is an integral part of the Leafs future and will becomes the second $10 million winger in the league, hitting the number right on the nose for as many years as Marner wants.

The next set of RFA’s could be the most interesting, and they come in the form of Andreas Johnsson and Kasperi Kapanen. While not superstars, both players are playing their first full season of NHL action and are showing signs that they could develop into top-six forwards in the near future. While not there right now, I think these two players have the ability to become a part of the “star” category of contracts and the Leafs should try to sign both of them to bridge contracts to let them prove that this season has not been an anomaly. Coming off their entry level deals, Johnsson has similarities to Connor Brown. While Brown had proved himself over two seasons instead of one, Johnsson has a slight edge in points per game (albeit getting to play with Matthews for extended periods helps and was a luxury Brown never got to experience). I think Johnsson could get an identical RFA-deal to Brown, 3 years, $2.1 million per year. I don’t believe that Johnsson has proven enough for a team to consider offer-sheeting him for a more expensive contract as the cost of doing so would be a second-round pick.

Kapanen is a different story. The main piece in the Kessel trade as discussed early, Kapanen has been a considered a blue-chip prospect and has shown signs of brilliance over the last year and a half. I don’t believe been around long enough or has shown enough to get a deal longer than four or five years, but by signing a deal of that length, he will get every opportunity to prove his worth and hit the open market in the prime of his career. Leafs fans are familiar with Jake van Riemsdyk, and while they’re skillful in different ways, both JvR and Kapanen proved themselves as skilled wingers with incredibly high upside over their rookie contracts. Disregarding Kapanen’s first two end-of-season short stints with the Leafs in 2016 and 2017, both JvR and Kapanen averaged a point every two games when consistently in the lineup. van Riemsdyk’s six-year $4,250,000 per year deal ended up being a bargain towards the end of the it, so I think Kapanen gets a little more money, but slightly less term as he hasn’t proven himself over three full seasons of the rookie deal like JvR did. $5 million a year for four years could be in play, but I think Kapanen has shown strong enough skills that if he continues to develop, will put him in line for a pay day the Leafs won’t be able to afford in the future. I think they offer him one more year of guaranteed money at a slightly less average annual value (AAV) to keep him around for one more year. $4,500,000 per year for five years is the agreement I think both parties will come to. Unlike Johnsson however, Kapanen is definitely a candidate for an offer sheet. In a nutshell, if teams do not come to an agreement with their restricted free agents in time and instead have to provide them a qualifying offer, this opens up the ability for any other team in the league to offer them a contract via offer sheet. If an offer sheet by another team is presented and accepted, the team that owns the restricted free agent’s rights has the ability to match the offer sheet and the RFA remains with their original team under the terms of the signed offer sheet with the other NHL team. If the franchise does not match the offer sheet, the player belongs to the new club under the terms of the offer sheet, but the new club has to pay draft compensation to the club that lost their RFA. The compensation depends on the average annual value of the offer sheet. As discussed earlier, an offer sheet for Johnsson would come at a cost of a second rounder. A Mitch Marner offer sheet would likely net the Leafs four first round picks! Neither of those seem likely to happen. If I have captured Kapanen’s value correctly, an offer sheet that would pay him more than $4.5 million would cost a team at minimum a first-round pick and a third-round pick. If the average annual value got into the $6 million range, Kapanen would cost an additional second-rounder on-top of the picks from the $4.5 million range. Taking the AAV into consideration as well as the draft compensation, I don’t think Kapanen moves teams if the Leafs are willing to pay around $4.5 million per year. It gets interesting if I’ve completely overestimated how the Leafs view Kapanen’s value. If the Leafs only think Kapanen is a $3-$3.5 million man, Kapanen could get an offer sheet for an AAV of $4 million from a team who likes the potential he’s shown and wants to give him a consistent top-six chance. In this case, Kapanen would fall into Johnsson’s category of compensation, a second-rounder. I believe a lot of young teams would take that trade-off in a heartbeat. All of this to say, if I’ve correctly estimated Kapanen’s value to the Leafs, I can’t see him getting offer-sheeted, but if he’s not as valuable to them as I think, he’s a prime offer-sheet candidate. I have confidence that the Leafs know what they have and will pay Kapanen what he deserves, $4,500,000 for five years.

Igor Oziganhov hasn’t done anything to suggest he will get a significant pay increase in arbitration this offseason. I expect the two sides to settle outside of arbitration. There’s definitely potential in Oziganhov, but the execution hasn’t always been there this season, which should result in another one-year “prove it” contract. Ozighanov’s qualifying offer would be 105% of his salary in the current season ($925,000), and while the Leafs could probably argue that Oziganhov deserves a slight pay decrease, Oziganhov has appeared and played quality minutes in enough games that his management could make the arbitration case that he deserves more than a million in AAV. I expect the Leafs to offer him something similar to what the qualifying offer would be, with achievement bonuses attached, similar to his contract this year. For the purpose of this blog, I’ll assume he gets the full amount that his qualifying offer would be, one-year at $971,250 with bonuses. It feels high, but could be a bargain for a player who could be a big part of next year’s team.

Nick Petan is the final RFA that the club will have to agree to terms with. Petan will likely be one of the odd-men-out on nights when the club is fully healthy. The Flyers’ deal with RFA Taylor Leier seems like a solid comparison here. After only appearing in 55 games in three seasons, Leier took a pay decrease from $806,558 AAV to a one-year deal at $720,000. Petan likely gets a similar deal, with 84 games played in three years and only 18 points. Looking at the last two years, Petan has only appeared in 30 games and has five points. I’m going to give Petan a one-year deal at $750,000 because he isn’t coming off his rookie deal and has shown slightly more potential than Leier in more opportunities.

Apart from Johnsson, these RFA signings follow the earlier logic of paying your superstars and rounding out the roster with cheap contracts. I don’t mind the Johnsson contract as he’s shown potential that could result in him being criminally underpaid in the last few seasons of his bridge deal.

If you’ve been keeping up with the math, you’ll calculate that we’re at about $92 million ($9 million above our cap), and we still need fill the roster out with one more depth forward and one more depth defenseman. The cap situation will look as follows:

Maple Leafs 2019-2020 salary cap (2).png

The first thing we can do is write-off Nathan Horton’s cap hit of $5.3 million. Because he’ll be designated as long-term injury reserve, we are able to exceed the cap by any amount up to his salary of $5.3 million. For example, if the Leafs had salaries of $84 million next year, the Leafs could write-off one million dollars of Horton’s contract to get to the salary cap of $83 million. It isn’t exactly phrased like this, but the Leafs essentially have a salary cap of $88.3 million next year ($83+$5.3). To make things simpler, I’m going to reduce Horton’s salary to zero for next season so that we can keep our cap at $83 million.

Taking off Horton, we’re still around $3.5 million above the cap with two players still to sign. At this point, you have to look at getting rid of players that don’t follow our “star or bargain” roster build. When I look at the roster above, there are two players that don’t meet this criterion for me - Connor Brown and Nikita Zaitsev.

The Maple Leafs lines have been fairly fluid this season, but one thing that has been consistent is that Connor Brown hasn’t gotten many opportunities in the top-six. Nylander, Marleau, Johnsson and Kapanen have all gotten regular minutes in the top six at some point or another this season and even when they’re relegated to the third line, they play a fair number of minutes. The same can’t be said for Brown, who’s time-on-ice is inflated by his frequent penalty-killing presence. While Brown sports a higher time-on-ice than Johnsson, Johnsson’s found himself a nice spot on the Matthew’s line and has been increasing that number throughout the season.

While they may be similar players right now, Johnsson has a higher ceiling than Brown, which likely puts him above Brown on the pecking order for next year. Kapanen is without a doubt higher on the line combinations than Brown. Unfortunately, that takes Brown out of the top-nine forwards and using the “star or bargain” theory, you can’t justify paying a fourth-liner $2.1 million, even if he will move up to the top-nine in the case of injury. There were trade deadline rumors that Edmonton was trying to reunite Brown with his Erie Otters teammate Connor McDavid. The Leafs should try to accumulate as many draft picks and/or young players as they can for Brown, as their fourth line will have to be a revolving door of minimum and entry level contracts over the course of the Tavares, Nylander, Matthews and Marner contracts, so the more they can accumulate, the easier it will be to fill those spots in the future.

The same should be done for Zaitsev. He’s penciled in as the number one right defenseman, but I think the Leafs would be more comfortable having Muzzin or Rielly learn to play the right side in the off-season and going with those two as the number one pairing. With the depth of the forwards and the money that will be tied up in the top three lines, the Leafs can’t afford to have a $4.5 million defenceman on their second pairing. Zaitsev has never been an offensive producer for the Maple Leafs, but his defensive style doesn’t lend himself to points. The problem is that his plus-minus doesn’t indicate a strong defensive presence either. A +6 isn’t bad, but on a team with defensemen at +36, +31, +17 and a +6 in 19 games, without Zaitsev contributing offensively, it begs the question of whether or not Zaitsev brings enough to the table to justify the $4.5 million price tag? $4.5 million needs to be for difference makers, and I think Kapanen is more of a difference maker on this Leafs squad than Zaitsev. We will get to the minor leaguers later on, but there’s a higher skill gap between Kapanen and a minor league replacement than Zaitsev and a minor league replacement. Similar to Brown, trade Zaitsev for entry-level contracts or draft picks. This may be more complicated than Brown as Zaitsev can submit a ten-team no trade list, but the goal should be to work out a trade that Zaitsev will approve.

The Leafs recently signed Andreas Borgman to a one-year extension at $700,000. He’s shown potential in limited time with the Leafs last year and has had a good year with the Marlies. I don’t think Borgman gets this extension this early if he isn’t in the Leafs plan for next year. In addition, he can play the right side, filling a need for the big club.

Calle Rosen also signed an in-season extension worth $750,000 per year for two years. He’s had an incredible season with the Marlies, putting up nearly a point per game and posting a +10. If Rielly or Muzzin move over the right side, I think the third left defenceman job (behind Travis Dermott) is Rosen’s to lose. This leaves Justin Holl in the same position he’s in this year, as the seventh d-man, although he probably gets more playing time as he’ll rotate with Borgman more frequently. If one of the young defensemen can’t cut it, there’s the Leafs last two first-round picks waiting in the wings, Timothy Liljegren and Rasmus Sandin, both making ~900,000 next season on their entry-level deals.

Jake Gardiner and Ron Hainsey won’t and shouldn’t be back with the Leafs next season. UFAs this summer, Jake Gardiner is going to be grossly overpaid by another team with cap space. A 40-point defenseman who’s only 28 years-old, Gardiner might make an AAV of $6 million on the open market. There’s no way the Leafs can or should pay that to Gardiner, especially with Muzzin needing to be resigned in 2020. Hainsey has lost a step and unless you can get him at near league minimum, he shouldn’t be brought in over giving the young guys a chance. Some team with cap room will overpay him based on his track record and leadership. Losing Gardiner, Hainsey and Zaitsev will hurt the defensive core, but Dermott and Oziganhov should continue their development next year and seamlessly fill the gaps that will be left.

In regards to filling out the last two offensive spots, it’s finally time to give 2015 second-rounder Jeremy Bracco a shot with the big club. An incredibly skilled forward, Bracco will be better than the league-average fourth liner, even with his small size. He’s been a point-per-game player with the Marlies this season, so could be a bargain at only $842,500 next season. There doesn’t seem to be much left for him in the minor leagues, so even if he splits time on the fourth line, spending every day with the big club will be better for his development.

I’ve seen a lot of people suggesting we bring back Ennis to fill out the offense, but as a UFA this summer, I struggle to see a scenario where a team doesn’t look at his 17 points in 42 games and offer an every day spot for slightly over a million. If for some reason the Leafs can bring Ennis back for near league minimum, they should do it in a heartbeat. Nearly half a point-per-game in limited time, Ennis would be a steal if the Leafs could bring him back for similar money to this year. I have the Leafs budgeting $850,000 for him (a 30% increase on this year), but if he gets more money on the open market, the Leafs can employ a similar strategy that they’ll use with Bracco and bring up Dmytro Timashov for $693,333 next year.

This is how I have the Leafs lining up next season:

Maple Leafs 2019-2020 salary cap (3).png

This team may not have room for new free-agent signings, but that’s the price you pay when you bring in a free agent like John Tavares last summer. Absolutely worth it, but it takes you out of free agency contention for a little while.

This roster is close to breaching the cap, but it’s important to remember that this analysis was generous to the RFAs on the team, and some of them might sign for less than the analysis assumes. Another key point to remember is that the Leafs will technically be right on the $83 million cap, as they can’t write-off all of Horton’s contract to go under the cap.

It will be tight, but there’s no reason to panic about the Leafs salary cap for next season. As long as they use the “star and bargain” model, they won’t have any issues fielding a squad that should be just as competitive as this season’s team.

The rebuild was done right. Now it’s time to trust the young assets the rebuild afforded the franchise and let them lead the team to victory.

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