The first buyout window opens on June 15th and closes on June 30th, just before the free agency frenzy begins.

Process

If a team wants to buy out a player, they must first place that player on unconditional waivers, and he can be claimed by any team in the usual way.

If the player has no-move clause, he can refuse the waivers, which simply means his buyout can take place immediately. He cannot avoid a buyout by any clause in his contract.

Once the player clears waivers, after 24 hours, and is bought out, he becomes a UFA.

An injured player cannot be bought out without their consent. For buyout purposes, the  definition of “injured” does not rest on the player being on Injured Reserve (IR) or Long Term Injured Reserve (LTIR), which are designations more about managing the cap and roster sizes during the season than they are health reports — an injured player does not have to go on IR ever, after all. Instead the meaning is about the actual state of health of the player.

Jared Cowen and Schrödinger's buyout

There are no compliance buyouts any more.

Calculation

The buyout is either one third or two thirds of the salary, depending on which side of 26 years old a player is on, and it is paid over twice the number of years remaining on the contract. The new amount of the payout becomes the amount that counts against the cap each year. This is all complicated by signing bonuses which are not reduced in a buyout.

The Cap Friendly calculator is the quick way to examine any buyout in any year and to see the effect on the cap hit.

Contracts signed when a player is 35 or older can be bought out, but there is no cap relief to the team, so doing it gives a team an SPC spot and, perhaps, closure on a bad decision.

The Second Buyout Window

If a team has arbitration cases, they get another kick at the buyout can later in the summer. The reason for this is that an arbitration result can put a team over the cap upper limit, and the buyout might be the only way to get back under it.

There are limitations on this second buyout window, and the most meaningful for Leafs fans who want to expunge players they don’t like is that it can’t be used on players with an AAV under the minimum. It was set at $2,750,000 in the most recent CBA and is increased every year in the same proportion the minimum salary is. By now it is well over $3,000,000.

3 Players the Leafs are Not Going to Buy Out

The Leafs aren’t buying out anyone this summer. They have no compelling reason to, and many reasons not to.

Matt Martin

The Leafs are not buying out Matt Martin. No one is going to issue a press release apologizing for his signing, and announcing a buyout. And while they might want to trade him to a team that wants to play him, they might also simply use him as a depth forward who plays very well in some situations — just not the playoffs.

Matt Martin Buyout via Cap Friendly

SEASONBASE SALARYINITIAL CAP HITACTUAL COSTSAVINGSFINAL CAP HIT
2018-19$750,000$2,500,000$250,000$500,000$2,000,000
2019-20$750,000$2,500,000$250,000$500,000$2,000,000
2020-21$0$0$250,000-$250,000$250,000
2021-22$0$0$250,000-$250,000$250,000
TOTAL$1,500,000$5,000,000$1,000,000$500,000$4,500,000

The expectation for the Leafs is that the season where the salary cap might get tight will be 2019-2020. Saving $500,000 in that year is a very bad reason to buy out a player, and the downside is compounded by having to spread that cap hit out into two more years.

Buying out Martin after the coming season is over doesn’t improve the picture. His cap hit in the crucial year is still $2,000,000.

The Leafs aren’t buying out Martin.

Curtis McElhinney

The Leafs aren’t buying out Curtis McElhinney.

I confess, I can’t even imagine a scenario where they would want to, but it’s been discussed, so here we go:

Curtis McElhinney Buyout via Cap Friendly

SEASONBASE SALARYINITIAL CAP HITACTUAL COSTSAVINGSFINAL CAP HIT
2018-19$850,000$850,000$283,333$566,667$283,333
2019-20$0$0$283,333-$283,333$283,333
TOTAL$850,000$850,000$566,667$283,333$566,667

Since McElhinney’s deal was signed before he was 35, the salary and cap hit are reduced by a buyout. By a trivial amount. Why bother?

His base contract is well bellow the buriable amount, is small enough that the Leafs would be able to run three goalies for a while if they need to while they audition a new backup, and if the Leafs need an SPC slot really badly, all they have to do is trade one of their thousand third-pairing defenders.

The Leafs are not buying out McElhinney.

Nikita Zaitsev

Who would ever want to be the man playing the big minute defensive role on the Leafs? Everyone hates you beyond reason, and that contract, I mean, it’s the worst, right?

The Leafs are not buying out Nikita Zaitsev. You play with that calculator and see if you can figure out why. Now, try this: Change the date to 2022, which should fall right after the next lockout, and click on Update Results, and you might see how that contract is designed to deal with age-related decline should it manifest.

The Leafs are not buying out Zaitsev (or Ron Hainsey or the next guy who plays big minutes  and never any light duty).  Not yet, anyway.

Who is Getting Bought Out?

If you look beyond the binary of star/scrub, good/bad etc., considering players who were just bought out as UFAs can be a valuable way to find depth. Ask the Capitals how they feel about Devante Smith-Pelly right now? He was bought out last year.

One potential player to be bought out is Jason Spezza. Dallas might have to buy him out if his no-trade clause blocks a successful salary dump trade, that is assuming they aren’t willing to see if he bounces back with a new coach. If they do buy him out, Spezza becomes an affordable player on a reduced contract and well worth a look.

Maple Leafs trade target: Jason Spezza

One player who is very likely to be bought out is Paul Martin, although, the Sharks could just wait out the final year of his contract. The unburied amount of it, assuming they just shoot him to the minors, saves them less than a million in total on their cap, so if they do this, they must be planning to spend that million on someone. Martin seems like he’s done, and should retire, so he’s not likely to get signed.

Brooks Orpik gets suggested as a buyout candidate a lot, but that seems highly unlikely. Ryan Callahan is another name that many people think should be bought out of the last year of a contract similar to Orpik’s.

A lot of these names suggested fall into the Curtis McElhinney category of older players who aren’t seen as valuable, or players of a type that isn’t highly thought of (guys who check) who might be a bit or a lot overpaid.

Buyouts are not a cost-free way to dump any player a GM might have made a mistake on, however.  “Out of sight, out of the owner’s mind” might be a motivation for a bad GM or one on the hot seat, but it’s not a good reason to get rid of a player via a buyout.

If Ottawa had simply waited out their bad deals to Colin Greening and Milan Michalek, they’d be better off right now. Speaking of Ottawa, sort of, there’s a lot of talk that the cap-strapped Kings will buy out Dion Phaneuf. If they do that, they’re betting hard on a lockout in 2020-21 because Phaneuf’s contract is structured so that his bought out cap hit that year is higher than it would be if they just wait.

Now, how about some fun at Ottawa’s expense. Let’s buy out Bobby Ryan.

Bobby Ryan Buyout via Cap Friendly

SEASONBASE SALARYINITIAL CAP HITACTUAL COSTSAVINGSFINAL CAP HIT
2018-19$5,500,000$7,250,000$1,833,333$3,666,667$3,583,333
2019-20$5,500,000$7,250,000$1,833,333$3,666,667$3,583,333
2020-21$5,500,000$7,250,000$1,833,333$3,666,667$3,583,333
2021-22$5,500,000$7,250,000$1,833,333$3,666,667$3,583,333
2022-23$0$0$1,833,333-$1,833,333$1,833,333
2023-24$0$0$1,833,333-$1,833,333$1,833,333
2024-25$0$0$1,833,333-$1,833,333$1,833,333
2025-26$0$0$1,833,333-$1,833,333$1,833,333
TOTAL$22,000,000$29,000,000$14,666,667$7,333,333$21,666,667

You can almost see how a GM would be tempted if he was supposed to be working to an internal cap ceiling.

With a rising salary cap, and more expansion coming, which fuels revenue which drives the salary cap up more, the motivation for teams to buy out marginal contracts to solve their cap problems just isn’t there for anyone who plays in the actual NHL.

The NHL has also set some precedents on what they will accept as a reason for permanent LTIR for players who aren’t exactly hurt and aren’t exactly healthy. If you’ve got a player like Phaneuf on your roster, you don’t want to be hasty, and the older they are, the less hasty you should be. The problem might solve itself.

Buyouts are supposed to be a way to get the players you want under the cap ceiling, and the fewer there are, the better things likely are.  If teams end up using them to just save on cash salary, maybe it’s time for the league to look at those teams and ask hard questions.