Tuesday, August 08, 2006

Buffalo Walks Away From Dumont

The Buffalo Sabres have become the second team this year to walk away from an arbitration ruling and let their player become an unrestricted free agent. Buffalo joins Boston in making this move. Buffalo has walked away from the $2.9 million salary arbitrators gave to Jean-Pierre Dumont.

Dumont is a solid offensive talent who has put up 40 or more points in four of his last five NHL seasons. He is one piece of the offensive depth that helped Buffalo have a good playoff run that took them within one game of a Stanley Cup finals berth.

A $2.9 million salary seems a little high for Dumont (especially when compared the the $3 million given to Ladislav Nagy - who is a much better player), but this move does nothing to improve the Buffalo Sabres. This is the kind of move that a small market team has to make from time to time. They cannot afford all their good players (they cannot afford to spend to the salary cap) so they have to let some go. I seem to recall Gary Bettman promising something about this CBA helping small market teams keep their talent - but I guess that is public relations and not reality.

Buffalo (much like Boston) is trying to keep their player costs below $36 million (and not the $44 million figure) because this allows the Sabres a shot at revenue sharing money.

As the salary cap continues to rise, we will see more and more instances of small market teams who cannot afford to spend at the salary cap level and let their talent get away since they cannot afford them. The bigger markets will not have this problem and will be able to bring in some of the talent. Sure a salary cap limits how much of the talent they can acquire, but this isn't an issue of quantity of talent, its an issue of quality of talent. As free agency rules liberalize, more and more talent will be available to be purchased. The best players in the NHL will be for sale - and at a young enough age that they will still have many great years left.

It is true that Dumont's $2.9 million salary is on the high side. It is also true that a team in a big market with salary cap room to spare (Buffalo has salary cap room to spare) who thinks they have a good chance to contend (Buffalo came very close to making the 2006 Stanley Cup finals) would bite the bullet and pay Dumont. Buffalo doesn't have the same options in their small market. Such is life in the NHL. This CBA won't change it and if it leads to Buffalo's talent reaching free agency at a younger age, it will only make the problem worse.

Here is TSN's story on the Buffalo announcement.

"It is also true that a team in a big market with salary cap room to spare (Buffalo has salary cap room to spare) who thinks they have a good chance to contend (Buffalo came very close to making the 2006 Stanley Cup finals) would bite the bullet and pay Dumont."

Actually, Buffalo doesn't have salary cap room to spare once you take into account the fact that Miller and Kalinin remain unsigned. Because of backloaded contracts their salary cap hit is a few million dollars higher then their actual salary for next year. I believe that if they had accepted Dumont's award they would have been at about 41 million. Add Miller and Kalinin + a cheap rookie to fill in the remaining forward spot and they would probably have been over the cap.

From what Regier said, one of the main considerations in walking away from the award is the fact that hitting the salary cap is a very real concern (particularly if Biron can't be moved). It also increasingly sounds like Regier is expecting them to be quite close to the cap entering the season.
Buffalo has plenty of salary cap room to spare. You are wrong Meg.

Although its not a perfect accounting for salary cap space, you can go to TSN to see the salaries owed to Buffalo players. I add them up and see less than $34 million paid out with a $44 million cap. Plenty of salary cap room.

They do not have the finances or desire to use it.
I'm definitely not wrong. The TSN numbers are the salaries owed, not the cap hits. The cap hit is the average salary over the life of the contract. Therefore players like Afinogenov, Connolly, Tallinder, Campbell, Lydman, and Pominville all have higher cap hits then the salaries listed there.

For example, Tallinder's salary for this year is $1.6 million as TSN lists. His cap hit, however, is over $2.5 million because he signed a backloaded contract. Afinogenov's salary is $3 million, but his cap hit is $3.3 million because he signed a 3 year, $10 million contract. Connolly makes $2.2 million this year but his cap hit is nearly $3 million. Etc.

Even without Dumont their cap hit is currently over $38 million.
The TSN numbers are not perfect, so I looked around for a better set of numbers (the NHL really should have these numbers available for diehard fans). Best I can find is a spreadsheet which you can download from the Irish Blues site. I does list the Sabres at $38 million plus right now. So you are correct on that number.

However, that deos leave salary cap room to spare. The cap is $44 million. I still think Buffalo is keeping the $36 million mark in sight. If it doesn't look like things will work out this year look for salary to be offloaded and the financial plan to obtain revenue sharing money. If they look like they have a shot they will knot offload talent. Dumont's salary makes it much harder to keep that number in sight.

I have no doubt that a big market team coming off a trip to the semi-finals in Buffalo's cap situation would have kept Dumont.
I do understand what you're saying and I think you're right to a certain extent. Particularly in terms of the Sabres wanting to keep their actual salary well under $44 million.

My argument is that if they kept Dumont their cap hit would be around $41 million right now. That would leave them a total of $3 million for Miller, Kalinin, and another forward (at a minimal salary). On top of that, I would imagine that they want at least some cap space for injury call-ups. I just don't see how it would be possible for any team, regardless of market, to have kept Dumont without getting rid of another equally expensive player instead. They apparently didn't even make an attempt to sign him to a longterm contract, so it seems as though they felt he was more expendable then players like Afinogenov and Connolly (who have similar cap hits).

Now, if Buffalo gets rid of yet more salary, and doesn't end up close to the cap, I will consider that a small market move. I just think we still need to wait and see. I thought Regier's press conference was actually quite interesting in this regard, as he talked about the salary cap acting as a magnet of sorts for team budgets and arbitration under a salary cap creating a new economic picture where the Sabres can no longer act under a different economic structure than the rest of the league.I'm not, however, sure how much to read into that.

I really don't mean to be argumentative though--I just thought your post was interesting and wanted to provide another perspective--and we can certainly agree to disagree. :)

Incidentally, while it's confusing (to me) I believe that they can still receive revenue sharing with a higher salary as long as their revenue itself remains in the bottom half of the league. Some teams with rather high salaries last year (such as Atlanta, I think) did receive revenue-sharing money this past year. I'm not entirely clear on that though.
I did a quick google search to try to find a clear concise and short reference about revenue sharing in this CBA. I cannot find one that says everything I want, but here is Tom Benjamin.

The bottom 15 revenue producing markets qualify for a general pool of revenue sharing money. Certain large markets (New York Rangers and Islanders, LA, Chicago, Anaheim) do not qualify even if they do not generate enough revenue.

There is a further piece of money that will be revenue shared this year. One that was not very significant last season, but will be much bigger this year. Escrow money. Assuming teams overspend the 54% of revenue which is supposed to go to player costs, this money will be distributed to teams that did not spend to the midpoint of the salary range ($36 mill this year).

This money will be significant this year. The poor revenue estimates used in 2005/06 to give a figure the NHL could exceed wont be used again. This year the revenue estimates will be based on real numbers. There isn't room for large underestimates. This will have a large amount of money distributed to teams with lower than midpoint payrolls. In smaller markets like Buffalo, this money could be very significant. It is a strong incentive to keep payroll below $36 million this year unless there is reason to believe that a strong playoff run/ stretch drive will earn the team more money than this revenue sharing money. It is a figure I am sure Buffalo is watching very carefully and will make a few moves to ensure they get a piece of this pie if anything goes wrong with the season.

While they could add JP Dumont's contract at $2.9 million and stay under the $44 million cap, it makes it much harder to be under the $36 million figure should that become the plan.
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