What did Garth Snow Do?

The Case of Michael Grabner

“Michael Grabner’s five-year deal in Long Island is the weirdest I’ve seen in a while. The Calder Trophy finalist (with 34 goals) gets a $1-million raise every year of the contract. It’s a $3-million cap hit, but he’ll only make $1 million in salary next season.“ — JIM MATHESON

Bought out in 2013

They buyout is only 1/3 across six years plus 3 million for the two years before + a big total of 7 Million over eight years for 2 seasons. That is a lot of savings if Grabner had regressed over two years of his contract. “Not risk, no reward,” mutters a grey haired back up goalie, as the other folks discuss his job and whether he should keep it (stupid GMing by committee). Either Snow dangling from a thread or some Player Agent willing to be treated like an S&M sub, thinks “Sure some team might end up giving him a contract and it bites us, but he’ll most likely will take a contract that ‘mother’ Russia will give him, and he still has 3 million coming straight from the Wang). Plus it helps us reach the floor for the last two years without spending real or actual money. This is profit sharing and we are hoarding, I might be in for a raise if I save Megalomaniac that runs this franchise this much money.”

SEASON	SALARY	CAP HIT	BUYOUT	SAVINGS	BUYOUT CAP HIT
2013-14	$3,000,000	$3,000,000	$666,667	$2,333,333	$666,667
2014-15	$4,000,000	$3,000,000	$666,667	$3,333,333	-$333,333
2015-16	$5,000,000	$3,000,000	$666,667	$4,333,333	-$1,333,333
2016-17	$0	$0	$666,667	-$666,667	$666,667
2017-18	$0	$0	$666,667	-$666,667	$666,667
2018-19	$0	$0	$666,667	-$666,667	$666,667

This is not too bad. The owner wants us to win in the new building and the budget only got a minor raise, the beleaguered GM is sure that by the 2013-14 season 666, 666 thousand dollar contracts will be right around the league minimum or even lower. So it is not that much of a penalty for making a mistake; as well, the husk of a man will saved his boss a bunch of money after he spent it trying to do the rebuild right. There is room to spend an extra 1.33 million dollars, hopefully enough to convince a veteran centre that they would rather suit up in New York with a bigger payday for one year for the third line.

Bought out in 2014

So it is 6-Millon in actual cash for the first three years of Grabner’s contract, while carrying a 3 million dollar cap hit for 3 years (save for the first two years and never paid more then it is worth). I guess a penny-pinching Mr. Snow could get out of his expensive years by buying him out if no body will trade for him. “That is it! We will do Yashin all over. It will be brilliant, and I’ll go down in the record books as being an innovator . . .”

SEASON	SALARY	CAP HIT	BUYOUT		SAVINGS	BUYOUT CAP HIT
2014-15	$4,000,000	$3,000,000		$1,500,000	$2,500,000	$500,000
2015-16	$5,000,000	$3,000,000		$1,500,000	$3,500,000	-$500,000
2016-17	$0	$0		$1,500,000	-$1,500,000	$1,500,000
2017-18	$0	$0		$1,500,000	-$1,500,000	$1,500,000

Oops. I guess I could use the two cap hits in 2016 to 2018 to help get me to the as savings like I did with in the over the first few years of the contract. I guess if I am a couple parts away from the playoffs I’ll have 3 million a season to spend instead of dressing Grabner; but I’ll only save 3 million for the owner instead of eight if I did this a year earlier. Plus I have a minor penalty on my cap hit—if I am trying to compete and spend money over the following two years (when Mr. Wang’s castle and ice-rink going to be paid for)! “Do I even have a job by now” wonders Mr. Snow, while in the corner his Successor is calculating Grabner’s buyout cap hit for next year when he is in charge.

Bought out in 2015

If my some chance the Back Up Goalie still has a job, the buyout is 2/3 spread over 2 years—plus the 10 million for the four years before =ing for a grandee total of 13 & 1/3 million dollars. Spread over 6 years for four seasons of playing or 2.22 million dollars player for a cap hit of 3 million. You have been carrying him for over four seasons with him getting more expensive each year. You are no longer saving on the cap hit, and cannot see yourself spending five million dollars on a three million dollar cap hit for a crappy third line player. Most likely Mr. Wang’s caddy and close personal friend / V.P. of Marketing and Video Scouting, is buyout Grabner as his first official act. Lets look at the cap hit:

SEASON	SALARY	CAP HIT	BUYOUT	SAVINGS	BUYOUT CAP HIT
2015-16	$5,000,000	$3,000,000	$1,666,667	$3,333,333	-$333,333
2016-17	$0	$0	$1,666,667	-$1,666,667	$1,666,667

Well the cap hit is better then last year: saving us 1.7 million in actual money and evening out for the cap hit for this year, and a minor penalty for the season following that. That is not too bad a pile of shit to deal with: “Especially since heaping pile of wasted contract space is one of the reasons why you got the job (plus you get to show how you saved some money in week one). Thank the sweet Wang, the choice of a crazy backup goalie didn’t handicap me for three years.” –A Desperate and Under Qualified General Manager says in the Big Apple.

Some comparisons (this is a Oiler Blog after all):

1) Grabner’s contract is very similar to Hemsky’s last one in structure. Of course significantly being in less in the overall amount, with our Lovely Czech making the proper amount in his skill level in a comparison with Grabner (hmh. agh. Two-way play, mrm.). As they go on in years they make more money and it is essentially a preformative-based contract, or a contract that is based of the on ice play of the individual since the player could be bought out at anything and be denied the biggest part of the contract.

2) The differenced saved between each year is quite divergent. A smart GM could trade him, barring that buy him out and actually save a lot of money on a contract in the third and fifth years of Grabner’s contract—maybe, the Austrian Phenom could be traded for by another team exactly for that reason (see Vandermeer deal this year in a Edmonton context). He saves you money on the cap, and, who knows, he might turn out to be a player. Then the deal looks awesome, save on the cap when he is further developing and get a couple bargain years when he is entering his prime (his 27th and 28^th years of age).

3) In every scenario, even if you pay the entire contract, you get Grabner for two seasons at one and two million dollars, most likely below what he is worth right now (1.5 each year for two and your RFA rights) and you get the contract done right around the time when the press jumps on the story about the new arena. Oh, he was the best oddity that showed up on your roster last year. Selling hope my friends, and we know about this in all the places people cheer for the Oilers. Selling Hope sucks.

4) This is a far better deal then having a front end loaded contract. For example Horcoff has a five year contract as well and his salary decreases each year: 6.5 for two years, a single season at 6 followed by one at four then at 3 (a total of 26 over five years). These three charts of Horcoff’s buyouts, below, represent a contract that is about twice as large as Grabner’s contract (at $15 million over 5 years).

2012-13

SEASON	SALARY	CAP HIT	BUYOUT	SAVINGS	BUYOUT CAP HIT
2012-13	$6,000,000	$5,500,000	$1,444,444	$4,555,556	$944,444
2013-14	$4,000,000	$5,500,000	$1,444,444	$2,555,556	$2,944,444
2014-15	$3,000,000	$5,500,000	$1,444,444	$1,555,556	$3,944,444
2015-16	$0	$0	$1,444,444	-$1,444,444	$1,444,444
2016-17	$0	$0	$1,444,444	-$1,444,444	$1,444,444
2017-18	$0	$0	$1,444,444	-$1,444,444	$1,444,444

2013-14

SEASON	SALARY	CAP HIT	BUYOUT	SAVINGS	BUYOUT CAP HIT
2013-14	$4,000,000	$5,500,000	$1,166,667	$2,833,333	$2,666,667
2014-15	$3,000,000	$5,500,000	$1,166,667	$1,833,333	$3,666,667
2015-16	$0	$0	$1,166,667	-$1,166,667	$1,166,667
2016-17	$0	$0	$1,166,667	-$1,166,667	$1,166,667

2014-15

SEASON	SALARY	CAP HIT	BUYOUT	SAVINGS	BUYOUT CAP HIT
2014-15	$3,000,000	$5,500,000	$1,000,000	$2,000,000	$3,500,000
2015-16	$0	$0	$1,000,000	-$1,000,000	$1,000,00

Even if you double Grabner’s contracts (which is not quite far to him), you still see that the cap his it less then Horcoff’s. For example, in there third year buy outs cap penalty compart is Grabner’s double total with a 1.333 million cost to Horcoff’s cap penalty is 1.44 million in that imaginary scale: plus there is no years that GM get a cap credit back from the NHL. If you look at the fourth year buyout, Grabner’s contract save the owner 3 million real dollars on the contract and Horcoff’s contract only rescue them 2.335 million in actual cash. That is not including the difference of the salaries in relationship to each other, which would show that the owner recovered a significant percent of the overall actually money in the contracts (Grabner’s at 20% and Horcoff’s at 9%). In the first two years, Grabner’s contract should be a deal and Horcoff is in his overpaid part of the contract (so they would need to perform): and that is the kicker if the players are bought out then the backend loaded contracts save money in profit-sharing while the contracts with up front cash end up paying into the profit-sharing. Without doing any proper math, I think that demonstrates that the buyout situation is better in a contracts that increase in actual gold transferring hands instead of a contract that decrease in paid cash over time.