With the Stanley Cup awarded to the Lightning again, as we seem to do every year, the first NHL buyout window is now open. This season, as part of the adjusted offseason calendar of dates agreed to in the Transition Rules, that window opened 24 hrs after the Stanley Cup Final, or sometime last night.

Process

Only players who were on the team’s roster at the most recent trade deadline can be bought out. As mentioned in the Expansion Draft rules, Seattle may not buy out anyone they select in the Expansion Draft.

A team must first put a player on unconditional waivers before they are bought out. Any player with a full no-move clause, who is therefore exempt from the usual waiver process, can agree to an immediate buyout or wait the 24 hrs. Once a player has cleared unconditional waivers at noon the following day, the buyout takes effect. No player has ever been claimed on unconditional waivers, to my knowledge, so this is a formality only.

The buyout is calculated on salary and reduces it to 1⁄3 or 2⁄3 of the original base salary remaining depending on the age of the player. Younger players, under 26 at the time of the buyout*, see a bigger reduction, and it actually is often better for a team to buy out an overpaid younger player than try to trade them with salary retention. With older players, that calculation really depends on the individual deal structure. All signing bonuses are paid in full, and not part of a buyout, making bonus-heavy contracts virtually buyout-proof. The AAV of the contract is reduced by the amount of salary saved by the buyout, so if all the salary is in bonuses, there is almost no reduction.

Buyouts spread the remaining salary and cap hit of the contract over twice as many years as were remaining on the deal, and the cap hit often fluctuates over the period of the buyout, and negative cap hits are possible in some cases.

Some 35+ contracts may now be bought out and provide cap relief as well under the newest CBA rules in the Memo of Understanding from July, 2020. Prior to this rule change the full cap hit of all such contracts always counted. To be eligible for cap relief from a buyout, the contract must be a multi-year deal where the total salary and signing bonuses is at least as much as the prior year of the deal for every year that it runs. The contract must also have no signing bonuses after the first year.

Bought-out players become UFAs, and can be signed by any team on July 28, 2021.

*for this offseason, buyout rules are followed as if the date they occur is June 15, 2021.

Timeline

The first window runs from now to July 27 with the expansion draft in the middle of this period. During the freeze on trades and SPC signings, the buyout window is effectively frozen since waivers are not allowed and only protected players with full no-move clauses can be bought out. That period is July 17 to July 22.

Teams that have arbitration cases — even if the case is settled before the hearing — can have a second buyout window. This year that period is 48 hrs that begins three days after the last arbitration award or settlement.

History

Last offseason there were predictions that the flat salary cap and cash crunch faced by many teams would lead to more buyouts. That didn’t happen. There were 10, which is a fairly normal number for recent years, and fewer than the season prior. Teams can often find other ways to get out from under a contract they don’t want to keep, and Seattle is certainly one of those ways, so it’s hard to predict what will happen this summer.

Last year, the bought out players were:

  • Bobby Ryan, who signed with the Detroit Red Wings as a UFA
  • Henrik Lundqvist, who signed with the Capitals before requiring potentially career-ending heart surgery
  • Michael Grabner, who did not play in 2020-2021, but has not formally retired
  • Jack Johnson, who signed with the Rangers as a UFA
  • Justin Abdelkader, who played in Switzerland, and for Team USA at the World Championships
  • Karl Alzner, who did not play, but did do some television work for NBC, and has not formally retired
  • Steven Santini, who signed as a UFA with St. Louis
  • Kyle Turris, who signed a two-year deal with the Oilers that they may choose to buy out this summer
  • Alexander Wennberg, who signed as a UFA for the Florida Panthers where he scored 17 goals, and added 12 assists in 56 games, making him the best signing off a buyout of the season
  • Cory Schneider, who signed with the Islanders, never played, and has not formally retired/

This Season’s Buyout Predictions

Some GMs have openly said they would consider buyouts or are expected to. The Oilers, the Flames and the Canucks are the obvious three teams that have albatross contracts they need off their teams.

As shown by last year’s list of bought out players, it’s often the last step before effective retirement for a player, but not every bought out player is at the end of their career.

Vancouver could clear a bit of space by buying out the last year of Loui Eriksson’s deal — he played seven games last year — but by burying him in the minors, he costs them $4.875 million, and a buyout of his remaining season costs $4 million this coming year and $1 million next season. The cash savings are only $1 million.

Meanwhile if they choose to remove the final year of Brock Boeser’s deal, they accomplish more. Boeser, at $5.875 AAV, has a salary this coming season of $7.5 million. His contract expires as an RFA with arbitration rights, guaranteeing him that inflated amount unless the Canucks simply refuse to issue a Qualifying Offer next offseason. They either need to find a trade partner who wants him, hope Seattle takes him, or they just have to let him play out the deal, knowing he’d need to agree to a lower salary to be a player they could keep.

A buyout saves them more than his full cap hit this season, in fact, due to the salary and AAV discrepancy, he has a negative cap hit (or a cap credit) of -$375,000 this coming season and only $1.25 million next year.

Choosing to just live with Eriksson’s cap hit, and buying out Boeser is a much better idea for the Canucks in terms of freeing up cap space, but it does lose them a useful position player. If the Canucks go that route, Boeser could rival Wennberg for the best UFA option to sign off a buyout.

The Flames have a worse contract problem with Milan Lucic, who won’t save them much in a buyout, but isn’t buriable because he has a no-move clause. They might have to buy him out, despite the low savings, which puts a cap penalty on the Oilers as well, since they retained some salary. The Oilers have to decide what to do with James Neal, who does save them real cap hit money if they buy him out. That seems like a no brainer, and this might be the summer when it becomes really clear that while signing Lucic in the first place was a mistake, the Oilers won the trade that swapped Lucic for Neal in just about every way you can in a deal like that.

One player virtually guaranteed to be bought out is Anthony Deangelo, who the Rangers should get rid of the second they have the chance. His buyout saves them a considerable amount on their large overpay and big mistake  of a deal. At that point, there will be teams who will believe he is a valuable player on the ice, and will choose to sign him as a UFA.

Other potential buyout targets are Jake Gardiner, possibly Anton Strålman or Keith Yandle, and one longshot: Evengi Malkin. His final year of a $9.5 million AAV deal only has $4.5 million in unpaid salary on it, so the buyout isn’t spectacular, but it does give the Penguins $3 million more in cap space this coming season and costs $1.5 million next year. A ruthless team would move him out one way or another, particularly given his recent injury-impacted seasons. But it’s hard to guess their intent under new management.

For the Leafs, this is wait and see time. If someone interesting enough becomes a UFA off of a buyout, they can make one of their usual offers of less money than the player is worth, more press attention than anyone would want, and no history of winning, and they can see if anyone will bite.